NEO - Earnings call transcript Q4 2019

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Operator

Good day, ladies and gentlemen, and welcome to the NeoGenomics Fourth Quarter and Fiscal Year 2019 Earnings Release Conference call. All lines have been placed on listen-only mode and the floor will be open for your questions and comments following the presentation.

At this time, it is my pleasure to turn the floor over to your host for today CEO, Mr. Doug VanOort. Sir, the floor is yours.

Doug VanOort

Jess. you, Thank everyone. Good morning, to conference welcome fourth like to everyone XXXX call. quarter I'd NeoGenomics

is our San this Our Annual together Clinical Officer; here team in of President Meeting McKenzie, Chief our joining Rob Director Corporate Medical Kathryn Shovlin, National George Services Dr. Larry Relations; Officer. Pharma our President Officer; Antonio of Investor and me is Doug Bill Bonello, for and Cardoza, call of our of Chief Chief our President Division; Division; Informatics Development our and Financial Sales Brown, Division our at Strategy and Weiss,

begin remarks, the we Bonello statements. standard will Before read our prepared forward-looking language about Bill

Bill Bonello

growth may beliefs statements. made substantial certain on opportunities. current contain call not risks which statements, this expectations call conference that uncertainties, are about represent of forward-looking performance, beyond and operations, nature, are are historical fact our their involve and and our which control. Any This our statements These statements forward-looking condition by statements, of financial

one could as Should prove undertake and statement statements. only these outcomes forward-looking materialize and uncertainties today, update those actual incorrect, underlying reflect or results should Any risks the or no to circumstances materially in or obligation events the assumptions from speaks indicated such forward-looking more we to any of differ or of statements after today.

this is prepared for let the that we'll section after know remarks everyone be completed. Relations our call the turning to the website copy Doug, back shortly call of a want Before of available call Investor our I to making in morning's

person a to that within one of the we're that give ask a call. going allotted more questions limit people want limit chance also We know to everyone hour been to this per two order let for number question has the in to to

Doug VanOort

Bill. you, Thank

review investments for and we're you review then drive briefly making initiatives highlights, and both near-term results the a then will answers. provide growth. I'll Kathryn that We'll more several call, I'll questions share time four quarter with have McKenzie and of long-term some detailed financial today's For and to then

I Before team. the a discuss couple to results, I to discuss would of our additions important leadership like

are she months. know our McKenzie, Officer two our as Many as Chief introduce as over for already a six Kathryn of capacity Officer. years delighted we you served the senior First, Accounting Chief in to the and finance leadership Kathryn past past Financial

also Brown, of who the Managing and would joins been as experience introduce I a SVB us Officer. Development joins Doug and oncology leadership Doug Kathryn couldn't and our where have Senior adviser years was diagnostics Leerink to Doug and has Strategy brings Chief trusted of Doug We us a he in like be longtime Corporate pleased from join sector friend our more team. company. to Director.

in direct Bonello, congratulate our Division, continuing and lead Investor I who addition now company. to a recognize Relations Bill and also created our to strategic our and initiative President process Informatics exciting newly for of is want to the

than Now year revenue and XX% nearly XX% by more XXXX organic basis NeoGenomics. to than for full let's year-over-year quarter greater highlights. XXXX and We to XX.X%. grew margin four outstanding including was turn gross by points increased growth year XXX an

global strengthened leading position we a competitive company. importantly, oncology diagnostic our More as significantly

revenue year-over-year Fourth $XXX increased to quarter million. XX%

in included last was quarter. Genoptix fourth reminder, a As part of year's

divisions organic exceeded performance. had very XX%. Both Importantly, growth once revenue strong again

volume volumes test approximately In increased organic year-over-year of with XX% combined growth company the XX%. fourth quarter clinical division

XXXX. that organic Genoptix in pleased are even rates we year each growth integration We since December during quarter accelerated acquired an

testing growth across drive with sequencing by modalities molecular next-generation particular to strength again and all grew in continue XX%. testing once We which approximately

division revenue reflects test measures revenue at The steady rates of mix increase marking customer rates growth reflective high and basis. our cytometry in growth market test test volume test from increased in volume on XX% customer test higher are results the retention next-generation of sequencing change per our a satisfaction. are increased very continued relative increase That growing that believe to also $XXX in volume a Clinical has per share. We addition reflect high as flow year-over-year the which Genoptix the of per and and straight sixth primarily quarter a favorable rates. of

Services more than increased revenue Pharma XX% million. year-over-year $XX to

and more a in record contracts the than year-over-year increased to $XXX New backlog of signed million. quarter the XX% were $XX contracts signed million

of assets now With the $XXX recent approximately is Oncology of backlog the acquisition million. Human our Division Longevity,

to companion from expertise, for with our domain alliance flow PPD expansion, global Pharma In and continue Services, we diagnostics. cytometry, positioning benefit global investments in

assisted of well the therapies. is positioned ever The stronger a on securing their than environment business capitalize is Pharma companies numerous FDA therapy has in pharmaceutical and to been Over robust XXXX, we oncology development. for course approvals for it

In Genoptix integration. profitability, holding of a in towards are the terms we as work completion we pattern of

up down XXX was margin quarter because in primarily XX.X%, year-over-year more than activities. for in final margin gross was the gross we points While basis throes points integration-related the fourth the are XXX of to basis year,

with to about of are that of expect on the future. as second to in quarter for feel have and our realize results been margins years. good able In outlook our more the XXXX We very operations we in focus Genoptix-related type summary, of the full a see improvements year improvement and hallmark the we for cost four half productivity pleased our are cost and substantial a synergies and

our I'll financial of four to Financial the Kathryn the of McKenzie, details over to discuss now quarter Officer some results. turn Chief call

Kathryn McKenzie

Doug the key commented Thank on you, Doug. revenue profitability. of points and already

quarter. in metrics for the Division increased basis, Clinical gross Services So revenue primarily driven other margin by will financial in on to XXX year XX.X%, basis points some I improvements our test. focus my full of the On a per commentary important

gross XXX to increased For the both margin anticipated and Services hiring points growth. integration quarter, fourth Clinical primarily sequentially due to basis down accommodate was

clients complete support and by primarily a Divisions $XXX, common and of significantly process. test Services As a average both up Services and our cost in growth due as impact the shift. Genoptix per clinical quarters to for to reminder, In the existing test and in to and we system staffed known and third of XXXX, transition also Clinical the to anticipated XX% Pharma fourth mix goods sold of test Genoptix our cost laboratory increased the

test basis to Genoptix. by Genoptix quarter quarter. of pro cost forma scale, cost a by year-over-year test improvement. test X.X% driven a fourth increased in the year a base essentially in automation basis, per the basis decreased per the per pro on year-over-year cost the to flat increasing On and due by process forma including XX% acquisition $XXX On primarily In was

declined for quarter, fourth year, to a for points in but basis testing we the the capacity Pharma this full to Services Services XX.X% gross efficiency over has margin signed reached XX.X% increased XXX its as continued testing Pharma With in independent to business. contract which the infrastructure. million, divisions $XXX Clinical approximately own a testing, We believe both that will of from necessitate decoupled business scale, time. testing enhance having backlog Pharma build

We continue to expand or gross margins over Division expect will levels Clinical that Services time. margin to above Pharma at

size year-over-year $XX due flat administrative the costs expenses impacts Clinical increased XX% increased both to expense or million addition XXX of of business. was driven basis year-over-year, of primarily sales percent and cost and as due the and points million, a declined XX% Pharma G&A by Genoptix General the $X.X expense million, on of the revenue to Sales Genoptix. marketing $XX leverage our to and G&A year-over-year of sequentially. to the of sides acquisition Genoptix the synergies. teams expanded and primarily

our FDA. In and for with develop single-site including customers, the quarter, development we sequencing new internally next-generation testing continue solutions the funding to assays and submission for fourth research as increased fourfold, our PMA

grown approximately scientists development. We and our XX dedicated engaged in have team R&D and to now of people research have

$XX.X was line midpoint Fourth of our the range. adjusted with quarter million, increased guidance year-over-year EBITDA X% in which to

contribution incremental contribution the than activity While EBITDA due our surrounding and year growth-related the EBITDA was adjusted on close the activities, for full normal investments XX% was revenue integration EBITDA growth. XX% quarter contribution to adjusted XX%, the long-term guidance four to heavy in of to Genoptix lower

$XXX four cash exited $XXX million with in in debt. We quarter and million

$XXX We million have our on credit of availability facilities. approximately

one we the Longevity Division acquired due year-end, of to increased $XX Human after days timing and Oncology approximately payments. sequentially XX million. that, note year-over-year assets day of will DSO three days You for to

Cash flow year. for $XX was the million from operations

issued guidance. XXXX year full earnings also revenue and We

to EBITDA to adjusted to the $XX revenue of in expect equates and range of in million. million range be which million, to growth million the $XXX $XXX We be XX% topline to $XX to XX%

reflects approximately $X HLI and of guidance EBITDA to Our dilution related growth to investments, related Informatics acquisition. million the incremental

the turn over to commentary key growth now call provide I on Doug initiatives. to will our

Doug VanOort

guidance about feel Thank we Kathryn. and provided Kathryn full XXXX. you, year great

we would XXXX. from want strong some for dynamics quarter. us full to before key expectations the the there. start for feeling Normally, Unfortunately, first gradually not However, optimistic about so that improve year of and have addressing case and the the is to I drivers to set that growth, year expect the

first quarter Pharma activity. for December in built a structure a late what profitability forecast backlog of global the is growth reasons of are our and and record There below, number We million Most Our large $X in the the revenue normally be April. significantly, Services down conversion starting until Pharma projects timing four of projects a this. we looks level and quarter would for sequentially. we of in approximately projects first March by given number in end for the to are other Services Unfortunately, expect. several had high not significantly tremendous revenue, have quarter support cost a up to

our dynamic, contracts for Pharma XX% I at our year. signed business will And continue healthy. grow exceeding that backlog to revenue timing rates $XXX this subsequent us is high and and team very quarters in million in confidence you Despite that of the our Services gives can assure

breakeven also just will not assets Human yet from acquired First be which Longevity's adjusted recently Oncology by Division of at acquisition point. we quarter impacted a dilution and EBITDA the is

Informatics. lower EBITDA result of to investment We adjusted expect our also in as be a

working strategy are have a people our We team and now of on XX initiatives. Informatics-related executing

Services incremental Clinical provide stream year. and source beginning We expect this these strengthen of Division revenue our an and the initiatives position competitive and some later that Pharma in with of both to

full million. deliberate execution EBITDA for guidance being committed about strategy first initiative. adjusted for quarter expectation $X EBITDA are current of adjusted the We're Even million and to in our year, and approximately confidence our this $XX is to with million $XX our

we that That National whole, opportunities. Meeting. Looking say are a is Antonio San extremely must holding I our ahead Sales XXXX in we excitement are our about to evident where excited here Annual as

partly why they be I competitive attendees care. it's they have diagnostics wish investors the because to leading revolutionary time partly that It's this our an saving each excited in so properly and extraordinary convey nearly XXX and believe oncology the driven. customers know And because of lives. and the committed that could to are we and are we in position I they building in blocks grow believe to oncology lead global have place company. ability We here

Division Clinical and has an Our portfolio. position excellent product market

greatly excellent by adding national the our market contracts, for group acquisition and expanded channel pathologists position system contracts. with hospitals position With oncology our market community We distribution gained and leading Genoptix and fortified an oncology we the accounts, managed practices. purchasing lab as large health of care

We are most payer every with regional with and national contracted significant now plans.

and next-generation rapidly capabilities in largest as one of country. testing Technologically, the sequencing we significantly providers enhanced the of oncology-focused our molecular emerging are

compared tests fourth growth about quarter, category testing. with with the a cancer the of the better prior market customers new of strong. grew we for remain in XX% XX,XXX rate patients. at to and expect over tests plan its We rate sequencing services of volume molecular next-generation XX% deliver care test during fact, leveraging representing to total our our year division, introduction we position Clinical our This our continue and to of and In approximately help performed very

test of Next-generation pan-cancer an on and a offerings samples products validation focus expect of hard second for for to biopsy area development not and are introduce sequencing cases obtain suite in XXXX. in particular early liquid to biopsy the we introduce to expect We're possible us liquid working where and several half. tissue is our a complete

hematologic next-generation for designed assays both rapid requires sequencing expand a malignancies. working tumor prompt of treatment. leukemia which developing often panel and acute our to solid myeloid offering sequencing We're We're for also RNA-based

so particularly to are practices, addition, advanced beyond the working for In oncology their disease leading the patients we're assays minimal and to able access diagnostic the oncology into these of that Because hospitals the hematologic into of our oncology on academic setting reach for neoplasms. adoption communities. facilitate can environment we cancer residual of tools thousands have care in own community identifying

clients sales developments oncology-focused highly team along in to XXX our to and abreast continuous Importantly, of our over education trained of ensure that PhDs team remain with oncology. MDs provide the they

competitive well. year, over the we past our as Services position Pharma In strengthened significantly

Our Pharma clinical basis, from development of tests. across companion commercialization a research development global testing, Division drug diagnostic clients, on the supports to Services through continuum, trials pharmaceutical and

than presence Asia. in We global currently clients, to world. Pharma provide service business, by XXX We around Services our for market more plan grow the both, different expanding Europe and our

expanding our diagnostic offering, for tests. by with and And next-generation leading-edge, commercializing, tools, capabilities companion developing and test sequencing particularly unique

We Services, product to our acquisition build Pharma capabilities, Longevity. the of Human made January, an important Oncology move Division the strategic through assets in of

The next-generation team whole-genome workforce, an in sequencing. expertise, sequencing sequencing have La now with serving even germline, strong companies. pharmaceutical and experienced, next-generation pharmaceutical more customers, Jolla specialized particularly performs for services We whole-exome including molecular in

backlog of diagnostics these as important $XX of predict $XX generated their approximately medicine precision in business patients. and effectiveness immunotherapy with growth of is signed million increasingly contracts. Companion revenue rely, and the to ended tests XXXX, a areas on in million, is approximately in This year

Included companion a of of XX assays, pharma in variety signed our contracts, diagnostic are backlog biotech different companies. for and

We increasingly, companion with projects. sponsors with in are discussions diagnostic to help pharma

day associated with services, We several support agreements companies also in have the with testing commercial for one large diagnostic analytical drugs, advanced companion late-stage launch to pharmaceutical provide, with pipeline.

the same ability, have labs from development, and through our trials companion Few across market. test, continuum, oncology, into take to clinical an the

During a that for XXXX, laid data will market our we leverage unique the position. also and new business informatics foundation

for for physicians, as, stakeholders, implementing systems, oncology clinical world patients. payers, our tools, decision and expertise identifying real care clinical help support And companies problems, to health or trials, solve patients pharma such

systems, in we innings, While engagement of major managed care significant product health terms very and including already have various stakeholders, the are development, pharmaceutical global early in large we payers. from firms, national

In plan Division. we XXXX in to continue Informatics to invest, our

and while division position We Services long-term, an Divisions. of to strengthening Pharma be in in source our both incremental competitive the expect Clinical this revenue, the

and an is our to about diagnostics opportunities, In for in summary, XXXX beyond. was exceptional NeoGenomics. And place an exciting extremely XXXX year excited we are Oncology be.

associated Advances for proliferation and in are diagnostic survival, technology driving diagnostic a and science are of quality tests. therapies, enhancing therapies life, and These cancer and oncology patients. increasing of tools

leading position advantages, to hard significant our today. diagnostics our company. proving working to competitive become the leading we market is the even future, offer make sustainable And competitive in in to the vision, as stronger Our position, pursue are world's oncology we

a to call Q&A Bonello, the hand now Bill I'll over to session. lead us through

Bill Bonello

at us address to we'd subject At and during e-mail only free Incidentally, questions. this of feel you're a to conference the the at open addressed already Q&A session if by matter like to call-in question for to hasn't this call, the via call listening been point, the if call webcast submit questions and would please we'll listeners. our your bill.bonello@neogenomics.com end the like

call. hear questions hour would the beginning person at we this like this that call, and mentioned so each to for we within may limit As to their of ask the from allotted keep two, to still everyone

now the may call you open Jess questions. for

Operator

move Puneet SVB to Souda We'll Instructions] Leerink. [Operator at Certainly. first

Puneet Souda

and new on on here. you to the have Hi, role. onboard to call entire Kathryn, here the Great everyone, have team great Doug congrats thanks the

guide. wrong, I'm parse but you. that's informatics correct multi-gene contribute from XX% here So accelerate it's my into if I Doug if out? at grower, and terms first you hoping out to are about could contribute midpoint. strong growth of and expect could those me is guide. expecting a HLI question, effort here you from mean the That's panels organic I well you And contributions Thank contributions that to the as NGS? to on $X do was parse the million if almost Pharma? this you in expected

Doug VanOort

of expect comments. investments acquisition This We in do business. that continue that for Well, organic Thanks should continue the seen -- we've thank fuel in the growth to our question the and in you assets informatics, Pharma, recently Longevity that oncology we've of the made strong recently. Puneet. in growth to Human division

are very molecular and restructured and approximating And by partly we have rates being in our the XX%. those growth next-generation is that think been high-quality mentioned panels Clearly have driven they respects We very, some organic we sequencing panels. NGS growth really testing.

continue our marketplace improvements We and of in favorably to to capabilities is reporting that. in genes the in and terms very them of number reacting make

So clinical in to should sequencing our fuel next-generation panels the growth. continue business

the the fuel of the we that. I Longevity's that revenue last same remainder to the to Longevity is In that got at acquisition the the for guidance on that million of script will Certainly this revenue $XX grow we for long-term Human Pharma, to mentioned is after -- capabilities. the in continue year the expect very rates one and Pharma quarter which XX%, was at of strong We've XXXX business would expect Human year exceed our about least growing. there. assets

In we of and are full multi-gene A ordering capabilities. portfolio very terms There have multi-gene panels lot customers panels. the also NGS growing very, of a using panels our some are large these multimodality like that know, panels, multi-gene targeted of our you nicely. customers multimodality panels. And and

single-gene Some ordering those offer just product customers are also the of tests. spectrum full And opportunities. molecular we

asked can are strategy. you informatics, tell our I informatics about excited you lastly And we about really

beyond excited a We solve should in expect trials companies, others lot or for about and matching And our that. XXXX to patients pharma's with pharma And payers inquiries in of here. them and of second half clinical therapies problems have their certainly that expanding case, patients to identifying running help revenue capability, business. are see from capability the very we're from our they getting we and

Puneet Souda

start continues -- of to that largely could ASP given if assuming slightly larger? for My And to NGS. we terms you growth in on current one, I'm a NGS given NGS you was see in driver portfolio. terms improvement expecting is -- tests NGS important be follow-up the priced When than second sequential good. Number is lift. elaborate Okay, in So I are being becoming and can Great. higher the the on of contribution? ASP an

that remind Also, multigene? regulatory I when pointed current on as could And it again second should -- can expect front, out, the you. taking approval the on launch but Thank the us FDA? the for a efforts, we in through when the you're squeeze you same panel? into the you terms And from what's NGS liquid liquid could to half feedback if been of pathway multigene that go we expect -- on

Doug VanOort

Puneet. those good. questions. Thank for Okay, you

next-generation impact our price, unit impacting unit is of and terms average on continue it will sequencing's slightly do In it average price our so. to

tests generally -- test. greater Our the NGS panel significantly than of are are price our average per

it's is although to think by somewhat. I improving somewhat next-generation I paid get environment payers, that but sequencing improving still Reimbursement in difficult see some

that there some our of forward favorable next-generation held expect mix in sequencing. would as share AUP volume result the by we So increasing our going would impact test of a be

by initiatives average reimbursement other on the have way time. will we unit price that have also We a impact over favorable expect

In work sequencing a panel terms of FDA large FDA. approval hard approval, to next-generation we we're of assay of achieve the before brought very continuing that to FDA

difficult some number to we're of by with as we had are a good with this FDA. recent progress dialogues firm end say And very to dialogues the to of have FDA. we're year. the it's having we learnings FDA for a be sure. that give good of because through guidance there process, make confidence would when the the and real substantial result would We must hope We've with I as learning the process,

progress. So very end the is bit we through the that XXXX. good hope to of process predict, by be difficult would a we are the but I timing would And making

about asked biopsy. liquid also You

developing product expect introduce and process And biopsy that the would would validating biopsy of we a we commercially. able around liquid process is are now. we a of the liquid offerings. in One in summertime, test, right that which are number We of product be pan-cancer series to

sponsored also with on, category liquid these with the partly biopsy We have single-gene companies. partners are we're in pharmaceutical offerings that and are being working which

Pharma working both all we're our addition potentially other and to business that, clinical business. In our opportunities liquid biopsy on for for

will we in is to XXXX this So for and liquid area And comprehensive menu of growth biopsy important beyond. us. add products a very our

Puneet Souda

right. Doug. All Thanks, Great.

Operator

to Brian Blair. next at Weinstein go We’ll William

Brian Weinstein

then questions. versus gains? bit -- pricing growth Yes. more industry talk within dig volume? Thanks. second growth Thanks in in the I'll are about you Can you the a taking for you here dynamic are little a volume to the the are about Maybe in second. XXXX? guidance. Also thinking ask share for we question that in Or baking really testing And on

Doug VanOort

Brian. you I Thank Okay. appreciate the question.

gains in volume see we yes, market the terms expect In business, continued clinical gains. share to of would

to about comprehensive We're there we very talked market you we've the menu date. a and to And companies our menu few one very out centers time. up serving see pathologists, As comprehensive have very for gains competitive as keep has of in we strong a we some cutting-edge have I oncologists, space centers, have which we position. we that share know academic cancer a and think continue

of terms stable. the price had pricing, average unit In relatively quarters increasing pricing though is of environment six we've even straight

organization somewhat. I Now, gain is cases group the will or But contracts, pricing national do bit sequencing have contracts, our improving some improving And said, a in make. little there market that, purchasing are hospital when that pricing which unit large be concessions favorability there. in price. average there test next-generation is as for is we'll our some large general mix, dynamics dynamic One we we

average AUP. would think to historically about is our be guidance for for decrease down think guided reasonable X% you price that a to maybe And or X% We've X% have. I So to so. in expectation relatively I unit annual

Brian Weinstein

us because a your out was second So that you are that that a for are of backlog not bit just on just what of going projects then guys my pushed more Thanks. you to of backlog partners on? and whatever the you can on getting working the surprise. your else some things confidence bit. Or projects these a Can And a of and with give and broader it's detail relates slowdown that that really conversion that that play little on us more here to it is out? give some maybe the a that's in Great. bit unlikely question as

Doug VanOort

we're understand, a growth and at contracts got we've got We very some finishing signed team a in to is and contracts, we've add I And and terrific we our sales signed of you, they're Pharma pace. just very Yes. Pharma our can in robust in continue both which best ever new terrific, assure backlog year excited.

we over slowdown see at in don't Pharma So the a all. long-term

fact, have It's we dynamic, did expectations. In what that and growth exceeding unusual seeing April. in ended meeting we which a long-term dynamic. projects we December, is is What which lot and one stopped in we're is quarter or our or of unusual bit in have of where are an an March a have starting projects,

seasonality some have also we Now, here.

and couple the So typically rest of and of now in year. bit Pharma weaker January the and little that bigger We've Pharma in February a is piece years are seasonally than last NeoGenomics. the of seen March a

It's in basis the our impacting on the about a love is of it customers strong few menu confidence so meet out we Pharma worldwide that comprehensive very have unique We But a feel there it. very property. business. of products, can and needs of the And Pharma we things very, business, bit. good a one with a that's businesses

Brian Weinstein

Great, answered questions. Thanks. multi

Operator

of Analysis. to go We'll next Joe First Munda

Joe Munda

question. Thanks for hear okay? morning. Good me Can taking the you

Doug VanOort

Joe. can Thanks. Yes. We

Joe Munda

there. decline as growth. to as said wanted gave some Commentary the just of Kathryn was on quick details Genoptix So had talking margin. well about us real the I integration the year-over-year on the gross QX decline touch

out investments of the was the And two-part for due decline much question, really have second we half? down look the us I then well left how the as you. a integration future how two, we So left Thank much guess walk as as growth? integration do to to the through in maybe in drive opportunity far Genoptix if as you versus what's costs could

Doug VanOort

Sure, Joe.

and some Let in Kathryn me weigh of take if will necessary. maybe that

all, I say well. very the First is going Genoptix integration of that would of

XX We XX months think the are about we into and are about integration or process now, I done.

of onto Genoptix preparing laboratory fronts in up front information on about and forward. involved who migrate set other system, Because will two will other to processes the have we customers customers our in information for billing months' have a going about the progress have a left lot time where migrating of lot cost culminate two are will and to integration remaining IT going and that are billing in laboratory on unified and both systems us folks, a and a still -- months the single We and of activity and system. we that

that process in four, gross on have we -- but the margins costs So of lot finishing did redundant integration impact focused our somewhat people we it. or cost feel that our XXXX, And in very think place a to acceleration good second about we activities. the some reduction We activity. because in per cost see test and are in half going quarter of we test per normal

customer have gross to global Pharma separating expansion, Pharma infrastructure in lot lot point margin, and for a creating Services, and activity. Services invested a a necessitating In investments from getting us are that the large and is invested be we've laboratory, separate to the And business Pharma And Services is the I we in Pharma where laboratory impacting a business activity business different in growth than requirements NeoGenomics. part in business. terms in Pharma Clinical also to Clinical would in of of because separate

for signed backlog, in cost which that got $XXX we're growth. So execute. of we've in a contracts for There's Geneva, the laboratory added processes our And just we've we and for million fair and systems lot to there's feel U.S. a about amount Singapore, waiting because it, ready sense, of in that great of

gross So, rebound in our gross half margin margins expect was the second pressured to some would extent but in to quarter we of XXXX. our four,

Joe Munda

that. to Doug as comment you as well follow-up a of The result one that on just can then, with revenue that And relationship? Thanks. Okay. relationship as incremental PPD,

Doug VanOort

could job. I Cardoza comment, Joe. George better do Yes, a but would

mic George. the pass me to let So,

George Cardoza

They're very that We're very relationship in them were office pleased the a they up. with the setting valued right literally PPD. across partner. invaluable from We're and with Singapore, hall in

for several -- gotten contract in million wins few have quite a We them. actually dollars

dollar working well a We're that I that specific amount. with more But upside them. we're we're And For I both years competitive out relationship still say, reasons, we I don't there's and in, lot partnership. with in think the pleased sides realize really give had. be X.X to that would that's think

very would think for and partnership. the track, future on I say, looks our So, it's bright I

Joe Munda

Okay. you. Thank

Operator

next Bruce Instructions] We'll at go The to Jackson Company. Benchmark [Operator

Bruce Jackson

my exciting. tools. support for Hi. informatics The decision get to details you really on Thank wanted if the maybe we question. sounds taking know some could more strategy I clinical

George Cardoza

in and the technologies think Hi. concept to Sure, tests mean it's for to of in increasingly ordering. most terms Bruce. the are I just rapid which I is what's the cancer going testing appropriate here difficult be providers evolution therapeutics, on know that getting with

the improve support so, -- systems based tests decision getting or if with our appropriate to situation the or with at into we directly working on online the through clinical patients health payers most better that would the concept help we that the ensuring for direct patient with could physicians instance, working right that testing. are the could level ordering is integrate And tools, for basic

a difference the corresponding patients with we PD-LX sort can we haven't could automatically that guidelines patient think consistent design could that's testing I et non-small make mean, providers If should sort inform an get that gets and about when as improving simple patient big in that be tests is them cetera, ordered. alert maybe a those tools of care. cancer of gotten molecular guidelines but lung cell test, use example often doesn't that a illustration that we

Bruce Jackson

any to with the on And got pharmaceutical that timing if wondering, Thank of and You've a a Does have footprint the the of to is there's just the side question anything you. fast starts. that the particular project impact business? then, global Okay. do coronavirus? business

George Cardoza

oncology are We an laboratory.

lapse really business. yes doesn't or doesn't to that coronavirus our -- So, COVD-XX over the

right a think do slowed I we've So now, have of been a that We through down. managing projects have do we Those we with. in China couple are that partner. working projects have partner our

a overall of a terms our amount revenue, be drag could not on minor, this. there But overall pharma So, revenue. of in minor material our it's

Bruce Jackson

That’s it much. Thank very from right. All you, me.

George Cardoza

Bruce. Thanks, Okay.

Operator

any comments. additional holding, closing back other no with VanOort I'll Mr. the And questions turn or to conference for

Doug VanOort

Okay. Thank you, Jess.

like commitment team oncology I'd time team, for around thank our company. recognize to world-class your dedication this to building X,XXX behalf diagnostics I the On to you want us call, the joining we As NeoGenomics members approximately the end world of a and morning. for their NeoGenomics

we or investment considering are interest of in in our are for those you listening NeoGenomics, company. Goodbye. you thank that your For an investors

Operator

will Ladies and you that gentlemen, We conclude thank today's call. your participation. for

day. You may great time and a disconnect have at this

NeoGenomics (NEO) 27 Feb 202019 Q4 Earnings call transcript