This article has been updated from a previous version to include comments made by NeoGenomics executives during the company's earnings call.
NEW YORK – NeoGenomics on Wednesday morning reported an 18 percent year-over-year jump in its Q4 revenues.
"For the first time since the pandemic began, we saw year-over-year growth in all of our core divisions," said CEO Douglas VanOort in a statement. "As the pandemic subsides, we believe that growth will recover steadily back to our longer-term growth targets, and we remain highly confident in the strength of our core oncology business and long-term growth opportunities."
The Fort Myers, Florida-based firm reported revenues of $126.0 million for the three-month period ended Dec. 31, 2020, up from revenues of $106.9 million in the same period last year and beating the consensus Wall Street estimate of $123.5 million.
During the quarter, clinical services revenues grew 14 percent to $106.8 million from $93.4 million in the year-ago quarter, primarily driven by COVD-19 PCR testing revenue of $9 million. Pharma services revenues were $19.3 million, up 43 percent from $13.5 million in the same quarter last year and mostly driven by an increase in research and informatics.
In the clinical division, test volumes increased 5 percent versus the year-ago quarter, while average revenue per test stayed flat at $369. The firm's pharma services backlog increased 60 percent to $209 million.
During a conference call following the release of the earnings, VanOort announced that he will be retiring from his post on April 19 and will become executive chairman of the board of directors. Mark Mallon, formerly CEO of Ironwood Pharmaceuticals and executive VP of AstraZeneca, will replace him as CEO and will join NeoGenomics' board of directors.
VanOort said that NeoGenomics recently achieved "relatively strong growth" in geographic regions in the US that were under less restrictive COVID-19 measures. Meanwhile, the firm saw negative growth in areas including California and the Northeast, where more restrictions were in place.
"Our Midwest, Southeast, South central, and Florida regions accounted for 10 percent volume growth in January, giving us confidence in future nationwide volume levels we may achieve when the entire country is open," VanOort added.
He also highlighted that NeoGenomics' fastest areas of growth continue to be its next-generation sequencing, pharma services, and informatics businesses, which now account for nearly one-third of the firm's revenues. The firm signed $48 million worth of new contracts during the quarter and has more than 40 active companion diagnostic projects in its portfolio.
In January, NeoGenomics raised $500 million in gross proceeds through a public offering of its common stock and convertible senior notes. VanOort said the new capital will help the firm "be more competitive" as it assesses merger and acquisition opportunities in the oncology market.
The company's net income for the quarter was $15.4 million, or $.13 per share, compared to a net income of $6.3 million, or $.06 per share, in the same quarter last year. Its adjusted EPS for the quarter was $.14 beating analysts' average estimate of $.06.
NeoGenomics's research and development costs remained flat at $2.1 million compared to the same quarter a year ago. Its selling, general, marketing and administrative expenses were $49.8 million, up 9 percent from $45.5 million in the year-ago quarter.
Revenues for full-year 2020 were $444.4 million, up 9 percent from $408.8 million in 2019 and beating the average analysts' estimate of $442.6 million. Clinical testing revenue was up 6 percent to $382.3 million from $361.2 million, while pharma services jumped 30 percent to $62.1 million from $47.7 million.
NeoGenomics' net income for the year was $4.2 million, or $.04 per share, compared to $8.0 million, or $.08 per share, in 2019. Adjusted EPS for 2020 was $.15 per share and beat the consensus Wall Street estimate of $.07.
The company ended the year with $228.7 million in cash and cash equivalents and $67.5 million in marketable securities.
Earlier this month, NeoGenomics partnered with biopharmaceutical service provider Parexel to advance the application of precision medicine in clinical trials.
Because of the unpredictable pace of the oncology market's return to full recovery, NeoGenomics has decided not to reinstate its formal 2021 financial guidance yet. However, VanOort said the firm expects mid-single digit revenue growth in its clinical and pharma businesses in the first quarter.
"With vaccinations on the rise and COVID-19 daily cases on the decline, we expect that oncology testing volumes will track and potentially exceed historical growth rates in the second half of 2021," VanOort said.
In Wednesday morning trading on the Nasdaq, shares of NeoGenomics were up 1 percent at $53.68.