NEW YORK – NeoGenomics said this week that it is making progress in efforts to expand its test menu, with three new next-generation sequencing assays in late development, two of which it expects to launch over the next six months.
The company, which has faced recent legal struggles in bringing its minimal residual disease (MRD) liquid biopsy assay to market, said that it still views innovation as a major driver for its future success.
The firm's new test launches include a rapid sequencing test for acute myeloid leukemia called Neo AMLExpress. During a call on Monday discussing NeoGenomics' second quarter financial results, CEO Chris Smith said that the AMLExpress assay is designed to detect the most relevant DNA and RNA biomarkers for AML diagnosis, therapy, and clinical trial selection.
"Most importantly, Neo AMLExpress has a rapid two-to-three-day turnaround time, up to two days faster than any other test on the market, including our own industry-leading test," Smith said, referring to its existing NeoTYPE AML test.
NeoGenomics aims to launch AMLExpress in both its clinical and pharma segments in the fourth quarter of this year.
"There are over 20,000 cases of acute myeloid leukemia that will be diagnosed this year, and we have a strong presence in this market," Smith added, saying that the company intends to "continue to lead" in the hematologic cancer space.
The firm's other new assay, dubbed Neo PanTracer LBx, is a broad liquid biopsy panel for pan-cancer genomic profiling. Smith said the panel detects all major variant classes as well as mutational signatures like microsatellite instability and tumor mutational burden.
"We believe this assay has the potential to be differentiated for pharma because of its large panel size, minimal sample input, and highly competitive sensitivity and specificity in the clinical setting," Smith said, adding that NeoGenomics expects to launch the assay for lung cancer in late 2024 and for a broader set of tumor types in the first quarter of 2025.
With a subsequent planned launch of a paired tumor tissue profiling assay, NeoGenomics will be entering a competitive market for both tissue and liquid biopsy testing in advanced cancers. Smith said that the company recognizes that there are other established players in this space but is confident in its ability to gain market share based on its footprint in both the hospital and community oncology settings.
According to Smith, the company is also making progress in streamlining and monetizing its informatics data, aiming to boost its attractiveness to biopharma customers. "If you take a step back and think about the number of tests we've run over the last few years across the cancer continuum … we are sitting on a valuable asset of oncology diagnostic data," he said.
"Even more so, we're using multiple testing modalities with digitized images for most solid tumor samples," said Smith. As we increase the volume of testing in our clinical business, we likewise expand the breadth and depth of our data assets.
Regarding the uncertain path forward in MRD, Smith reiterated its pledge earlier this year to find a path forward after it was issued an injunction to cease testing as part of a lawsuit filed by its competitor Natera.
Smith highlighted the fact that Medicare's MolDx program issued a coverage determination for MRD tests to monitor for recurrence in resectable, HPV-negative head and neck cancer. According to Smith, NeoGenomics' Radar test is currently the only MRD assay that has met MolDx's assessment criteria.
Although an initial appeal to remove the injunction was unsuccessful, with the appeals court upholding the prior ruling earlier this month, Smith said that the court did lay out a possibility for NeoGenomics to go back to the district court to modify the injunction with a specific exception for head and neck cancer.
Smith said that with this news, the company is still evaluating options, which also include modifying its Radar technology or licensing additional technology as it battles to hold a place in the MRD market.
Meanwhile, the firm's core test volumes and revenues continue to grow.
NeoGenomics said after the close of the market Monday that its Q2 revenues were up 12 percent year over year.
For the period ended June 30, the firm reported $164.5 million in revenues compared to $146.9 million in 2023, beating analysts' average estimate of $162 million. Its clinical services revenue was $141.4 million in Q2, a 15 percent increase over $123.2 million a year ago.
Clinical test volume bumped up 6 percent compared to the same quarter of 2023, and average revenue per clinical test was up 9 percent at $454.
NeoGenomics' advanced diagnostics revenue dropped 3 percent to $23.1 million from $23.8 million in Q2 2023.
The company's R&D spending was up about 5 percent in the quarter at $7.9 million compared to $7.5 million a year ago, while its SG&A expenses rose 7 percent to $85.0 million from $79.2 million.
The company's quarterly net loss was $18.6 million, or $.15 per share, compared to $24.3 million, or $.19 per share, in Q2 2023.
On an adjusted basis, the company reported earnings per share of $.03, beating analysts' average expectation for zero earnings per share.
Based on Q2 results, NeoGenomics revised its full-year 2024 guidance to revenues of $655 million to $667 million, with a net loss of $81 million to $88 million. Its prior guidance had been for $650 million to $660 million in revenues with a net loss of $66 million to $72 million.
NeoGenomics ended the quarter with cash and cash equivalents of $355.1 million and marketable securities totaling $32.7 million.
In midmorning trading on the Nasdaq, shares of NeoGenomics were up more than 14 percent at $16.71.