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NeoGenomics Expects Inivata Buy to Help it Penetrate MRD Monitoring Market


NEW YORK – NeoGenomics will use newly acquired Inivata's liquid biopsy technology to further penetrate the cancer genetics testing space by accelerating growth in its own next-generation sequencing, biopharma services, and informatics businesses.

Fort Myers, Florida-based NeoGenomics expects the acquisition, announced on Wednesday, will in particular contribute meaningful revenues related to minimal residual disease, or MRD, monitoring by 2023, driven by both companies' existing relationships with pharma and clinical partners in the oncology and pathology space.

During a conference call with investors on Wednesday following the announcement and release of NeoGenomics' first quarter earnings, executives from both companies discussed how they envision Inivata's liquid biopsy and MRD monitoring technology fitting into NeoGenomics' current cancer testing portfolio and helping it capture market share in the recurrence monitoring space.

In addition, NeoGenomics executives discussed synergies with the firm's recent acquisition of Trapelo Health, and provided some financial guidance for this year and beyond.

Inivata, a spinout of the University of Cambridge, is commercializing two circulating tumor DNA, or ctDNA, assays using its InVision platform, which applies a technique called enhanced Tam-Seq to spot mutations and alterations in ctDNA.

Inivata's 37-gene InVisionFirst-Lung panel, for patients with advanced non-small cell lung cancer, identifies single nucleotide variants, copy number variants, and gene fusions. The firm had previously partnered with NeoGenomics to launch the test last May.

Inivata CEO Clive Morris noted that InVisionFirst-Lung is currently reimbursed by Medicare administrative contractor Palmetto GBA at $3,500 per test, and as such has reimbursement coverage for approximately 200 million lives.

Meanwhile, Inivata's RaDaR tumor-informed pan-cancer assay looks at 48 known mutations for MRD monitoring. The firm began offering the test following CLIA-certified, CAP-accredited certification of its lab in Research Triangle Park, North Carolina in December. The test also received US Food and Drug Administration Breakthrough Device Designation in February.

Douglas VanOort, executive chairman of NeoGenomics' board of directors, said that Inivata currently has ongoing retrospective and prospective trials for RaDaR across multiple tumor types, including collaborations with pharma partners that began following the CLIA-CAP accreditation.

In addition to MRD monitoring, Morris envisions RaDaR being used for patient selection in adjuvant trials.

"Applying a test like RaDaR enables you to select patients who have [the] known disease so your trials can be smaller, more rapid, and you get the full benefit of your treatment effect," Morris said.

Inivata aims to provide early clinical data on the RaDaR assay at the American Society of Clinical Oncology annual meeting in June.

Morris said his team hopes to submit data through Palmetto's MolDx pathway by the end of the year, which will allow the company to commercialize RaDaR in the clinical market in mid-2022, he added.

Trapelo Health

During the call, CEO Mark Mallon highlighted NeoGenomics' $65 million acquisition of Trapelo Health in April to further boost the firm's informatics business in its clinical division. He argued that NeoGenomics sought a decision support platform to help increase the number of tests per requisition.

Trapelo's system uses an evidence-based framework to capture and codify result of clinical research, providing clinicians information as to which biomarkers should be tested for each patient. The system also coordinates a patient's cancer diagnosis with their molecular test results, national guidelines, FDA indications, and payer's policies to provide clinicians with an overview of treatment choices.

"The information is based on exhaustive combing of up-to-date clinical studies and incorporates a variety of different oncology guidelines," said William Bonello, president of NeoGenomics' informatics division. "Based on the information that Trapelo has curated, [we] make a series of recommendations to the oncologist, or at least guide them to what is evidence-supported."

NeoGenomics believes that Trapelo's system, integrated with its own test menu, will help providers apply precision oncology and guide effective patient treatment.

"We're focused on making Trapelo accessible to physicians, ensuring we have the right capabilities for this platform and rapid rollout, starting with existing customers," Mallon said. "What will be critical to getting community oncology support is using the increasing number of tools [we have]."

Morris pointed out that Inivata, and by extension NeoGenomics, is part of the very early stages of a developing MRD testing market.

"[In] the United States alone, there are more than 1 million new cancer patients being diagnosed very year, and these may benefit from MRD testing," Morris said. "Given [that] over 80 [percent] of the cancer market is in the community setting, we expect the majority of this market will develop where NeoGenomics has a leading market share."

Mallon also said that both of its acquisitions will help drive NeoGenomics' pharma business and advance its test offerings to potentially tap into a $15 billion MRD monitoring market.

"We've just started opening the pharma business beyond the US, and we have excellent and newly staffed global sales and labs in Europe and Asia to meet the demands of its customers," Mallon said.

Mallon also noted that NeoGenomics is working with each of the top 25 largest biopharma companies in the world, which he also believes will help the firm penetrate the MRD monitoring space. He said the firm will use internal "specialty resources" to support the InVision technology and will figure out "the right size of that" over the next few months as it introduces MRD in its suite of tests.

Financial guidance

NeoGenomics CFO Kathryn McKenzie highlighted that NeoGenomics expects full-year 2021 revenue to be in the range of $490 million to $510 million, with top-line growth driven by greater than 35 percent pharma services annual growth and clinical volume growth in the "mid- to high teens."

However, NeoGenomics does not plan to have "material revenue" from its acquisitions in 2021, nor does it plan for RaDaR to be a "material" portion of its revenue until 2023 or 2024, McKenzie said. The firm envisions less than $5 million in revenue from the acquisition in 2021, which will primarily be driven by InVisionFirst-Lung.

"We expect double-digit growth in 2023, if not higher, and [are] looking at how that can grow over time," McKenzie said. "As we get into 2024, we think there's significant time to growth, as MRD gets through development and acceptance in the clinical oncology market and community setting."

"MRD testing post-operatively has the potential to revolutionize the way early-stage oncology adjuvant clinical trials are conducted, and the ability to quickly determine responses to therapy in clinical trials is appealing to patients and biopharma alike," Morris added. "Clearly, the potential for MRD is immense, and we have a detailed plan to become a major player in these markets."