NeoGenomics, Inc OTCBB: NGNM
Company Overview Presentation October 2011
Time Matters. Results Count
Forward-looking Statements
This presentation contains statements which constitute forward-looking statements within the meaning of Section 27A of the Securities Act, as amended; Section 21E of the Securities Exchange Act of 1934; and the Private Securities Litigation Reform Act of 1995. The words “may”, “would”, “could”, “will”, “expect”, “estimate”, “anticipate”, “believe”, “intend”, “plan”, “goal”, and similar expressions and variations thereof are intended to specifically identify forward-looking statements. All statements that are not statements of historical fact are forward-looking statements. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. The risks that might cause such differences are identified in our filings with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise the forward looking statements made in this presentation to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events.
NeoGenomics Laboratories
• Pure play cancer genetics laboratory testing
• Servicing: Oncologists, Pathologists and Hospitals throughout the U.S.
• Competitive through innovative products, advanced technologies and outstanding service
• Rapidly growing Industry with tremendous market opportunity
• Accelerating revenue with increasing operating leverage
• 30% year over year revenue growth in Q3 11
• 40% of incremental $2.6 MM in revenue driven to bottom line in Q3
To improve patient care through exceptional cancer genetic
diagnostic services.
NeoGenomics’ Mission
Management Team • Douglas VanOort, Chairman & CEO
Operating Partner, Summer Street Capital Partners; Chief Operating Officer, Quest Diagnostics, Inc.
• Robert Gasparini, Director & Chief Scientific Officer Director of Genetics, U.S. Labs; Worldwide Marketing Mgr, Ventana Medical Systems Asst. Director, Prenatal Diagnostic Center (Harvard)
• Steven Jones, Director & EVP - Finance
Chairman, Aspen Capital Group; Managing Member, Medical Venture Partners Vice President, Merrill Lynch Investment Banking
• George Cardoza, Chief Financial Officer
CFO, Protocol Global Solutions Controller, Central Region, Quest Diagnostics
• Robert Horel, Vice President, Sales & Marketing
Regional Manager, US Labs; Product Specialist, Ventana Medical Systems; Pilot, United States Navy
Cancer Genetics Lab Testing (1)
(1) Source: Washington G2 Reports
• $5-6 billion market opportunity: “Personalized Medicine”
• Highest growth segment of lab Industry
• Approx. 360 Genetic Labs in the U.S.
• 2/3 affiliated with academic institutions
• Approx. 60 Commercial Labs perform 80% of testing
• 15-20 national/regional labs
• 12 other publicly-traded players
• High pace of industry consolidation
NV
OR
WA
MT
MN
NE
SD
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ID
WY
OK
KS CO UT
TX
NM
SC
FL
GA AL MS
LA
AR
MO
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VA
NC
IN
KY
IL
MI WI
PA
WV
VT ME
RI
NH
AZ
OH DE MD
NY
CA
NJ
CT
MI
MA
CA Facility 18k sq.ft.
TN Facility 7k sq.ft.
FL Facility 31k sq.ft.
A Growing Landscape
States sending specimens in 2010
Advanced Technologies
Cytogenetics: chromosome analysis “Neighborhood view from 1000 feet” Flow Cytometry: cell surface marker analysis “Single House view from 500 feet” FISH: gene analysis “Door and Window view” Molecular testing: DNA sequence analysis “View of serial number on door lock”
Key Customers
Pathologists and Hospital Path Groups: “Tech only”
• Enable community pathologists to compete with Large lab competitors
• Rapid Turnaround Time and Web based reporting
• Innovative technical component-only services – Flow, FISH, IHC
Oncologists and Clinician Groups: “Full Service”
• Specialized high level of service and outstanding quality
• Genetic Pathology Solutions™ (GPS) reporting – all relevant case data on one page report
Key Growth Drivers
Industry
• Favorable demographics
• Increasing incidence of cancer as baby boomers age
• Frequent discoveries of new genes linked to cancer
Company Specific
• Flexible and powerful business model
• Solid pipeline of new diagnostic test offerings
• Expansion of sales team and geographic reach
Increasing Sales Force Productivity
3.2%
25.0%
1.4%
5.6%
20.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Under 55 55 to 64 65 to 74 75 to 84 85 and older
Percent Change in U.S. Population by Age: 2000 to 2005 (Source: U.S. Census Bureau)
77% of all Cancers Diagnosed are in People Age 55 or Older, the Fastest Growing Segment of the US Population (American Cancer Society)
Diagnostic Services and Cancer Markets
2011 New Male Cancer Cases 2011 New Female Cancer Cases
Prostate 240,890 (25%) Breast 230,480 (26%) Lung & bronchus 115,060 (15%) Lung & bronchus 106,070 (14%) Colon & rectum 71,850 10%) Colon & rectum 69,360 (10%) Urinary bladder 52,070 (7%) Uterine corpus 46,470 (6%) Lymphoma 40,880 (5%) Thyroid 36,550 (4%) Melanoma (Invasive) 40,010 (5%) Lyphoma 34,310 (4%) Kidney & renal pelvis 37,120 (4%) Melanoma (Invasive) 30,220 (4%) Oral cavity & pharynx 27,710 (3%) Ovary 21,990 (3%) Leukemia 25,320 (3%) Kidney & renal pelvis 23,800 (3%) Pancreas 22,050 (3%) Leukemia 19,280 (3%) All sites 822,300 (100%) All sites 774,370 (100%)
* Source: American Cancer Society, Cancer Facts 2011.
Total New Cases Estimated in 2011: 1,596,670
New Diagnostic Tests
Strategic Supply Agreement with Abbott Laboratories • Allows NeoGenomics to develop and launch up to 3 Laboratory
Developed Tests (“LDTs”) using Abbott IP
• MelanoSITE - FISH-based test targeted at difficult to diagnose Melanoma cases was first
• Launched in Q1 2010
• 84% Sensitivity and 98% Specificity
• 10 year agreement with two, 2 year renewals
• Transitions to FDA if Abbott obtains FDA approval
• Two additional LDTs for other cancers
• Test #2 targeted for Q4 2011 launch
Volume and Price Growth
467 768
1,271 1,569
2,664 3,475
3,309 3,377
4,196 4,482
5,654 6,666
6,909 8,056 8,383
9,490
10,457 11,316 11,188
12,714 14,042
14,464 14,477
14,349 15,396
18,358
19,977
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479 504 509 484
522 534 523 552
569 603
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661 659 652 613 600 587
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572 570
567
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Tests Completed Average Revenue/Test
Quarterly Revenue
230 345 559 751
1,344 1,767 1,602 1,763
2,243 2,344
3,123 3,795
4,163 4,881
5,057 5,920
6,914 7,459
7,297 7,799 8,418 8,490
8,708 8,755 8,804
10,466
11,320
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Quarterly Revenue ($, 000's)
($, 000's) 2007 2008 2009 2010
Total Revenue 11,505$ 20,015$ 29,469$ 34,371$ % Growth 78.0% 74.0% 47.2% 16.6% % Growth Adjusted * 70.0% 25.4%
Gross Margin % 52.0% 53.3% 51.6% 45.9%
Sales & Marketing as a % of Rev 20.5% 16.8% 23.4% 21.8%General & Admin as a % of Rev 58.8% 40.9% 34.1% 32.8% Total SG&A as a % of Rev 79.3% 57.7% 57.5% 54.5%
Net Income/(Loss) (3,380)$ (1,383)$ (2,243)$ (3,303)$ Diluted EPS ($0.11) ($0.04) ($0.06) ($0.09)
Adjusted EBITDA (1,017)$ 809$ (103)$ (566)$
Summary Testing Metrics% Growth in Tests Performed 63.7% 55.7% 39.7% 25.5%% Growth - Adjusted* 57.0% 36.1%
* Excludes impacts from insourcing by one large acount (i.e., growth from all other customers).
Historical Financial Information
Quarterly Financial Information
($, 000's) Q3 10 Q4 10 Q1 11 Q2 11 Q3 11Total Revenue 8,708$ 8,755$ 8,805$ 10,466$ 11,320$ % Growth (YoY) 19.3% 12.3% 4.6% 23.3% 30.0% % Growth (YoY) - Adjusted* 23.9% 17.0% 11.4% 25.0% 32.0%
Gross Margin 44.7% 44.6% 43.9% 44.5% 44.8%
Sales & Marketing as a % of Rev 22.8% 20.4% 19.9% 16.1% 15.2%General & Admin as a % of Rev 33.5% 30.6% 32.1% 29.5% 29.2% SG&A Expenses 4,902 4,467 4,576 4,770 5,032 Total SG&A as a % of Rev 56.3% 51.0% 52.0% 45.6% 44.5%
Net Income/(Loss) (1,198)$ (377)$ (893)$ (293)$ (143)$ Diluted EPS ($0.03) ($0.01) ($0.02) ($0.01) ($0.00)
Adjusted EBITDA (399)$ (97)$ 29$ 483$ 693$
Summary Operating Data% Growth in Tests Performed (YoY) 29.4% 12.9% 9.6% 26.9% 38.0%% Growth (YoY) - Adjusted* 36.8% 19.5% 18.6% 32.0% 40.6%
* Excludes impacts from insourcing by one large acount and other non-recurring revenue/tests.
Key Financial Information
Recent Share Price (10/18/2011): $ 1.15
Basic Shares Outstanding: 42.8 M
Current Market Cap: $49.6 M
Treasury Stock Diluted Shares: ~45.0 M
Fully Diluted Shares: 50.7 M
Public Float Shares: 35.0 M
52 Week High/Low: $0.96/$1.67
Avg. Daily Trading Volume (3 Mos): 17,788
Historical Stock Price
NeoGenomics
• Emerging leader in the fastest growing segment of the lab testing industry
• Strong competitive advantages and new product portfolio
• Strong Management Team with directly relevant industry experience
• Accelerating profitability through revenue growth and increased operating leverage
• Q4 2011 guidance of $11.4 - $12.0 MM of revenue with $0.00 - $0.01 per share of net income
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