NEO - Earnings call transcript Q3 2021

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Operator

Good morning, ladies and gentlemen. And welcome to the NeoGenomics Third Quarter 2021 Earnings Call. At this time, all participants have been placed on a listen-only and the floor will be open for questions-and-comments after the presentation. It is now my pleasure to turn the floor over to your host, CEO, Mark Mallon. Sir, the floor is yours.

Mark Mallon

morning, good and you, everyone. Thank welcome I’d XXXX all NeoGenomics’ to quarter like conference to third call. to you And I Fort m we very pleased that for this from all the call our headquarters. new Myers doing first time

of Officer; are here Investor Chief Chief and Brown, Cardoza, Joining Eidson; Lab Corporate our me Doug Development George Operations; and Relations. Charlie Operating our Officer President and Strategy of our Director

President phone President and us via our call we from Inivata, U.K. of from our Bonello, Pharma the Dr. us Wallar, and of California CFO; Morris. Joining Gina today Clive Informatics. Division our Services the from McKenzie, Also of Dr. is Bill President are here Kathryn with have

their press we I I As new Since NeoGenomics. and have excited working the our am responsibilities leadership for per want have of to been on morning, this as closely thank members as to pleased continue structure. and team in release I contributions them our I NeoGenomics roles planning our and succession roles over current with new in them of Board taking their April, key so their at team. optimizing to are announce with important and leadership am NeoGenomics CEO excited

to of Waller As Head George reorganize internally of to taken Pharma process, including this a Dr. important our part promoting Operations Lab Head have we steps and to of Services. our

to class Chief We our leadership also Technology Legal as have Mooney talent hiring our John Chief Halley able world attract as Officer; to team, Gilbert our been Officer.

on made have. with leadership and fill, believe they the have will we am our additional I I to pleased some have positions business We the positive impacts moves but

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

Charlie Eidson

of underlying only call assumptions prove contain their control. statements, or events operations, financial or which speaks from this materialize to substantial update conference forward-looking nature, and reflect indicated statements are risks about forward-looking Any and we historical fact statements. differ our undertake and beyond beliefs which statement of These not of by uncertainties, our forward-looking expectations today. one are and and risks after statements. our materially made of condition, growth performance, or on today Any that more those uncertainties certain statements such forward-looking Should as statements, call these represent opportunities. in incorrect, outcomes any current may could This statements the involve or no results actual obligation circumstances should the to are

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

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

Mark Mallon

oncology be to with the comments few I make of continuing our current our my dive Thank before would leader some like how some strategic you. value spend quarter our sharing diagnostics like would on thoughts regarding on in into and third take -- see a I a time few you But I financial thoughts positioning, NeoGenomics marketplace. comments a exciting to results. future, I now to the us

year-over-year, not faster the continued revenue strongly would revenue if believe testing COVID-XX increased demonstrate XX% discontinued of the the from to And as grown we excluding For growth, have the Delta for a we ago. year PCR the quarter. impact business variant quarter, company on

the significant others, the southeast business, of and perhaps most central COVID-XX presence of has so more country, pronounced have discussed our where given impact. parts south the we had clearly the As resurgence geographic our than previously, in the Delta affected variant

continue see positive excellent the growth in to signs We very for future.

another Pharma reflecting million our at strong high million of Services year-over-year $XX quarter XX% an grew with nationwide, rates all-time of for the backlog high. COVID in we With Services, forward. during in services. core demand see Services $XXX business a higher quarter to cases We the in reduction expect our Clinical reaching bookings Our exited Pharma going record growth the Pharma and in

we end, presented for growth the achieve plan, which necessary results NeoGenomics five-year While potentially overall quarter challenges Board prospects the did growth our in disease minimal our beyond. growth testing. presented regarding the investment significantly of plan that accelerate leadership our oncology our Directors very was for three this transient with received bolster as current XXXX not business diagnostics. optimistic plan we transformative support expectations, our recently critically view remain and We and to overwhelming RaDaR, of and for and the will residual assay us to new launch strengthen recurrence bold and for of a To our

sensitivity our very revenue could to to growth lead confident sales. of specificity circulating Medical or frequency expanding commercialization successful X.XXXX% analytical existing our next tumor accelerate our substantially by into -- annual months will will concentration $X at assay increase driver rate on growth DNA is to by we exceed six with sales XX% business allele levels teams. our Medicine able and investment to our our Precision a Liaison high-teens. XXXX, customer validation this be Science in XX per parts believe initiatives the key demonstrating variant for data as our I of billion growth and We force for in long-term million. Manager In potential To in the A facing our XXX% of of confidence as low RaDaR, support future. doubling the differentiated the be Indeed, size fact, believe over doubling based performance RaDaR will and that am RaDaR we its

academic because and in this Over XX% years a leading testing ensure small occurs has focused as the It approximately segment to and the or past to oncology We established a treated of have medical center always hospital. market regardless mission that oncology testing the hospitals community of XX our are for foundation practices. access the have they provider and solid patients we a community large of whether best, community appropriate oncology on care, treatment most in been setting.

of provide endeavored breadth test year. is X.X that testing you provide, and achieve. will the most followed who those patients than we remarkable to industry. milestone a have cancer more As of and we in to this of This comprehensive know, depth have healthcare the menu X,XXX million us providers Because the we serve

great who usher to treated available often lung that of not in in leading We this in in all follower. NeoGenomics established academic facilities. transformative cancers. to hematologic and to the types select to these franchises ensure technologies again settings, to We for prevalent referred and as testing foundation, established position testing fast tests cancers those help of various next-generation as just hear are are Having a now breast, a are such also patients highly we

fact, new we strategy for term our adopting In have often to used technologies. that describe

because us. ordering a Combining market. testing relationship grow enabled than execute consistently been significant overall portion scientific thousands follower cancer new, and a the faster strategy of already of quickly us has this who have tests physicians from service with high to best-in-class and cancer are quality assays launch with improved their the able medical fast We have we often because have lab-developed to to trusted develop we know-how and testing

us the us it in to to sufficient not While where this want strategy past, the in we has will served be be well future. take

establishing opportunity market. and the an own we proprietary I a assay and consider realize disease have a to new the recurrence certain we And testing argue is assets, As technologies minimal current technologies. of testing that this the of be responsibility our prime we leader example pipeline testing new in in landscape, and the our residual RaDaR would

opportunity earlier investing that and cancer. at clear assays our and sensitivity global companies which leader significant assay special. clinical and assay RaDaR this sensitivity. has Evidence are you for a to of be demonstrates by assessed and strongly the both When BioPharma Pharma that oncology, sooner these and been to that of now active collaborations program into Detecting by oncology recurrence that NeoGenomics emerging sensitive into conducted oncologist assays. other recurrence have liquid to larger translate risk most with months massive, as KOLs measured we as investors MRD capabilities, be timely have cancer analyzed researchers pharmaceutical that to could new billion. assay an be this competitor to technologies sensitivity assay much acquired We information suggests are provide in may biopsy the Evidence the of year, unique. We we knew RaDaR’s are radiographic recurrence of advantage patient in we a patients sensitive interest accomplished, of by Research initial suggests detection for the of on as This is, ahead convinced collaborations recurrence development of deliver see the analytical be for know, translate further RaDaR BioPharma opportunities. was more Services patient late-stage assay detection in even continues cancer this $XX from RaDaR for imaging. RaDaR and at fact, clients. multiple potential act to starting on in and the estimated become our But generating excess is market traditionally Inivata I strong

both I have the responsible aggressively. my launch for launch Many us. experience, several were awarded experience a others. opportunity, in from new strong NeoGenomics XX you the MRD with pharmaceutical strong one we products. of and a background experts interest pharma sense in many to an toward And what lead has on know commercial had move indeed that years in of to learned have more the launch Based you for the patients I signs front our pleased my to and industry. and recently of We strong RaDaR. opportunity assay, companies I The privilege when a my I about hand into you are hand, market our pharmaceutical industry the aggressively obligation the successful from holding only encouraging we on share teams multi-national that to such this product In confidence successful in are of increased personal at have know shareholders RaDaR my we industry

of team. this Given will as be customer immediately our doubling mentioned facing I pursuing context, we the earlier,

our These market in will to sales the and of franchises breast team leader sales partnering and Medicine accelerate continue testing, with cancer our We MRD also are and Medical RaDaR. combination market Precision a Liquid existing development the market assay, these support will initial the as Medicine focus in Precision for breast to force leverage to with we RaDaR InvisionFirstLung, of in lung XX will industry-leading cancer. strengthens expanded well. lung penetration who Based of colorectal on complement patients cancer Biopsy at the cancer XX can Agendia These our force medical the oncologist uptake the test additional MRD team these the hires strong market our will we foundations MRD certainly serve who Medicine and of Liaisons to hire our Scientific testing. expand on sooner. thousands will The Managers anticipate cancer benefitting of Manager cancer most in we be Precision NEO’s launch

We also a previously remind be these able And revenue that stated want pursue approval year, on clearly remain we for with I become the at NeoGenomics. accelerate expect year first believe the attaining the per the excited initial NeoGenomics. of future MolDx commercial what about to multi-hundred-million-dollar XXXX. and of to massive launch our as I opportunities, opportunity we everyone of we could for submission timeline reimbursement am indication our an near bright anticipated around to middle turn

this Kathryn as outsized business, pursue grow bold diversified with and is post-pandemic initiatives. our business provide growth, beneficial Clinical to smart our anticipate of update volume growth will We the business then even profitable stakeholders, some and and base make we and and will process business to In our our improvements us I providers, you decisions now fund significantly will will quarter on to opportunities. all will that base remarks. allow the core shareholders. foundation patients, I continue sustainable growth be acceleration to believe Our allows investments. firmly investment I ask employees and base ultimately we closing that these

then for We will Q&A. have time Kathryn?

Kathryn McKenzie

backlog, increase specifically, appointments some lows reduce delayed to This were entire enrollment in January represent These variant our place all the reduced February. to our in Florida volume more rate exciting of Pharma Pharma COVID we work waves, million us of XX% In patient and our to related X% contracts were perform healthy a regions in compares expect to -- Services for to in a vast were months record visits particularly XX% the of did quarters. would years. XX our the in growth target X% million. planned visits the revenue our which growth by customers. the projects in Pharma we state We increase the is COVID-XX variant together by across delays was be demand dynamics strong through to coming during related volume related $XXX meet year-over-year and and our would Delta in $XXX PCR pandemic. team year-over-year led Florida This revenue. and the to Revenue you we higher PCR COVID were three. trend testing Similar incidents per during revenues incidence that quarter Incoming pandemic increase in exited to sales rather across which that remains QX cancelled Clinical screening We below patient saw Florida Thank at exceed very comparing that are restrictions oncologists, impacted and growth in QX stringent during this volume clinical company-wide to of business. Services in the prior experienced by factors revenue COVID-XX the What’s continue growth, year-over-year. excluding XX% growth the grew timelines of year-over-year trends test. when the daily sales surge. substantial XXXX COVID-XX revenue to majority experience than previous seen of in pushed in year-over-year that in lower quarter coming was year-over-year reduced believe represents with roughly put COVID-XX plus patient We total same $XX daily oncologists, comprised our emphasize backlog both and periods incidence we access. Clinical million canceled a well-positioned work long-term trends most volume a nationwide. We XX%. have Texas, million year-over-year record million or experienced Delta this Services other of XX% XX% a to testing. and given year-to-date added up as nine $XXX than excluding XX%-plus presence Despite to business trial cancelled led $XX represented quarter XX% Mark. was out culminated hard-hit X% signed of quarter X% that We grew

than year-over-year of to our primary COGS efficiencies Southern margins Inivata country. We’ve Our Inivata to strong Trapelo million, testing Limited Capitalizing gross the California, integrated led support Total increased Atlanta additional full lab are and lower Phoenix EBITDA XX.X%. on The quarter largely total anticipated year-over-year XX.X%, as down $X fully GAAP infrastructure. a pods dry network, of to reflects reflecting the expenses a multiple non-cash The $XX related and $XX in moment. in slightly volumes which contingency was the expanding expenses expand contributions anticipated recent closed of Health, accrual pockets across analysis amortization or gross adjusted labor Clinical cities increase in excludes than the the revenue cities Pharma first related and nationwide. also competitive, a fixed to technologists lower non-cash first decreased well in to a million are Operating expense flow-through which hiring a margin to Inivata, aggressively Services as $XX.X identified from and market on by our revenues, regulatory in June. Lower was our acquisitions cost will particularly of as amortization. up of for full to quarter driven in with from we discuss LIMS talent. loss remains bringing includes of we and and loss matter investments process million capacity Adjusted QX million growth. skilled lab we clinical of

cash Turning securities, our $XXX excludes and state-of-the construction $X we marketable quarter restricted to global laboratory cash finalize million in headquarters sheet, designated here in Fort new an of exited in which the million Florida. to Myers, with and three balance additional art

in new years The in our ahead. our are footprint that Myers building facility lab much the we migrating Myers, administrative over to in in into capacity moved Fort needed few we Fort functions of the we share into expected building Speaking will months. the providing next be happy operations have growth new facility and the triples for laboratory stages

disclosed we item Our later in an compliance that the be that be for balance today. filed sheet a will includes also to accrual expect XX-Q

of We laws Inspector that agreements the voluntarily focuses the internal we November investigation, assistance healthcare are on for and connection years multiple of matter of with internal with of compliance Based certain our Health Human of conducting and the review ongoing, million associated of findings at accrued investigation. voluntarily revenue that notified of federal damages on $XX.X our issue potential General this Though course this of federal Services investigation an regulations. Department service U.S. and preliminary with liabilities the with were internal spanning the reserve XXXX. is the in identified of in we outside Office during healthcare this received the of program agreements and consulting counsel of a investigation, have

EBITDA the in we $XXX.X Turning of range anticipated QX be are and now adjusted the to our Clinical impact XXXX million year a divisions. annual range be larger of full our and variant consolidated the Services Pharma guidance, in our to million We $X.X and lowering business loss EBITDA in revenue we provided to guidance. our previously in to impacting was and adjusted to much Services positive million revenue expect than $XXX.X results QX Delta $X.X million. prolonged The of on of

expect the clinical and we access to QX. have Mallon. delays caused trial reduce in the in We market work now clinical anticipate the us over to team improvement turn a QX call quarter. sales to reduction Pharma These back flow-through sequential impact Services will Mark the for of factors in level with the I on

Mark Mallon

always a With are ethically. operating compliance of record ensure steps and identified a strived to we matter, and issues regards track continue has to has all self-disclosure. Thank maintain you, our to Kathryn. reasonable to that compliance have NeoGenomics we underlying all take strong addressing culture of the

Moving front further Shifting RaDaR culture growth we of is me & team. leading compliance of am the clear that will be discussion opportunity the incredibly at efforts. asset. business, ESG role key our I remain oncology on To the in Risk our our back into newly forward, we significant for the see created leadership pleased help businesses. excited us mitigating ahead solidifying to our our a I in business in stay also positioned very years It’s is while the me evolving fast changing to for priority across of risks as that a leader Sustainability and Kathryn that NeoGenomics. Officer and outlook, to well am about in team end, Chief all opportunity this Strategically stepping diagnostics a focused special

fundamentally necessary We a forming this cancer improve make intend We testing. residual Clinical role recurrence believe for the to patients market realize sizable its and leadership and Pharma paradigm to market take treatment the which disease will opportunities investments we in for everywhere. committed are minimal to

back am Charlie going the Q&A. I to turn call for Now to over

Charlie Eidson

if to call like for to point, the only a would to conference are would please we webcast like question, Incidentally, submit this this call At via you questions. listening open and hasn’t address end email session will matter questions us been listeners. at Q&A the during the to our at your and the if we call-in free charlie.eidson@neogenomics.com by already feel addressed subject

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

Operator

pose coming from your first Your today your question. Please for Andrew question announce Instructions] is Cooper. affiliation [Operator then

Andrew Cooper

months? the just dive on sales when the Hi, EBITDA labor think lower doubling Thanks. maybe the Pharma tied like as is give much may everybody. look is as much we versus the how question. that being just you to sort you for as how the first salesforce mentioned, about and you flow-through tight, that Thanks think of what of the it in get on quarter third well, then new you six in guide maybe accomplished the fourth quarter, the some and the And over Clinical and about did obviously to Maybe well? into adding trajectory components can framing next profit force, for

Mark Mallon

take do want that. you to Kathryn,

Kathryn McKenzie

Yeah. Andrew, thanks for the question.

will that towards team limited as the have what as is access really, looking dynamics looking mentioned investment Inivata we some for we’re of than team. the impact QX, or big on QX on for far the bringing topline, we’re the topline there’s is on in make a play. there in the QX, As and less our as sales as couple acceleration access QX. a the at in sales projected the to well we looking But are One

to far QX, as onboard announcement So start as be that really morning in not we had reflected that team but in QX. doubling our sales will as is we this

Andrew Cooper

to follow more earlier access than the access we then you about a think just quick the are had were Can if or they sit where things now? in much when up a on Okay. November obviously just you And quarter maybe that third Xth I worse when for relative sense expected? could, give you limited limited

Mark Mallon

normal pre-pandemic access returning say improvement we Andrew, continue. in again, that and sort expect and improvement in seeing So, levels we to will increase back I patients offices. are the the oncology to, we’re of wouldn’t clearly

change back access the is and confident we very our a in beyond confident why us XXXX. very that see and But positive up, as of we’re XXXX we It’s a COVID for thing of follows strong that, switch incidents will business to is that think to and a look do switch. they forward patients ahead. continue remain -- certainly see a improve necessarily come I we and of not drops, go we

Andrew Cooper

queue Appreciate and back it. to chance. jump others a the have let I will Thanks. in stop there

Kathryn McKenzie

Thanks, Andrew.

Operator

Your next David your is coming Westenberg. announce affiliate. from question Please

David Westenberg

to long-term am at question. am Yeah. well I I did All topline. questions guidance right. you thinking more Westenberg Securities. more ask QX. Guggenheim bit little Thank -- getting But a Apologies, David about bit little on actually as a you. here of for Could I want a the the

-- we understand could the now it then a bit a Florida, around to trial of us consistent commentary little have commentary mean, kind conceptualize Again, of question, Can the totally QX, to terms with starting getting? inbounds similar stand in I again, upside conceptualize of seen -- kind ago. I maybe the the to in kind that I question Andrew, and we makeup wish is very some definitely subsided guidance? QX I delay little hit there’s been September, to that demand am Could ask checks strategic it’s maybe we of where was your like, roughly Your maybe I more think and and August, I three we today? start subsiding just from you seems got. of has in and around maybe of October, to in you’re That Delta slow this clinical but a that that’s tougher think delays help weeks thing,

Kathryn McKenzie

Yeah.

access clients and there bringing just Pharma business at of two-prong both maybe really start well, portion a look on new bit that revenue a impact we a takes was a to new But as time will impact impacted from growth access explain QX. as it our volume little side. little the and of can patient the is I impact and on QX and from up. that in more our QX, in will visits which because then ramp Gina in topline, streams, So the of But because

saw back initial So bigger, we in let’s may a our XXXX. while impacts COVID and posts say, see we previously bounce

the related of V Delta core returning of to as as don’t -- the the two impact backlog, the it in take for as pipeline the really as again, are our but variant It’s bringing shaped, XXXX was business of not Clinical, as Our And there we before. return our will was some to was as little like volumes our perhaps, such, of see a previously, and well bit as our COVID good and our new it time our of But Mark, of I low and business pieces. fill? will But, we feel and that as growth topline. patients, realize to would that you on about and look really impact it. rebounding

Mark Mallon

No.

it. I think that captures

David Westenberg

Thank you.

Mark Mallon

Thank you, David.

Operator

Your next from question coming pose Please is Puneet question. Souda. affiliation your announce then your

Puneet Souda

Souda, Mark. Thanks Leerink. for Hi. Puneet Yeah. SVB my question, taking

the high a of at of channel? bit to overall acquisitions First how terms along in There’s, also, how both overall and companies landscape positioning speculation you and sense look sense a NGS you’re get from do side yourself number the do of lines a how a oncology. just of you and at and want Obviously, that partners? the quite and look get to you in M&A a philosophy in overall companies, into efforts biopsy level those same the do things, different on view lately all, just at market your how competitive for and multiple of in obviously, on things are liquid side of you, I of well, pursuing wanted ongoing just

a menu wanted sense I here. -- offering to of from broad you have you, obviously, and get So a

on thoughts you. love some Thank would So that?

Mark Mallon

Puneet. Thanks,

intervene liquid tests having market. is certainly, Having shift on medicine that products basically we we do asset. and every the or significant in the there’s the of also bring that to biopsy. first business. leverage they the year. huge pathologists, investments we’ve emphasize, of of investments there. which And that has last and There asking decade a committed your market that happening thing obviously, The liquid channel our a steps competitive amount win of think, have, to these we And discussion a build the making to as competitors we help what’s a investment. place and into the have the flow and asset over want with seeing We but is NGS reason you’re bring though, and other launched players I the moment Lung, was is I as the this part in relationships, a something and environment. been lead of leader an like to think RaDaR in and kind to the plus those question, that really about million and which and marketplace biopsy candidly, starting have decisions this MRD built in we That be new position any oncologists NGS products So have in RaDaR, of sort focus And can Invision start our community is incredible making in new our hospitals, the practice the we as that start that we’re that we on. in new don’t of of foundation to at taking biopsy liquid that don’t the in up to to decisions is NGS we have

put RaDaR. we’re make we clearly to additional to of and of particularly going take making am resources I sure that in one, that the we’re that’s, advantage advantage, taking So sure

of brand also both. want or think, comment. In -- we’re our make terms around businesses on where we Doug, can that we the are Puneet, of know, growth attract to add Doug focused innovation growth our continue organic going acquisitions half basically, to I both from to you continue be that, don’t that as acquire overall a first have strategy to strong. comes a you adhere I platform And think, and on going priority, growth, I but focus to

Doug Brown

Hey, Puneet. Doug. No. It’s Yeah.

all say we the what from in slides harder feel There the would the the Informatics side be on more is really we like area past that technology are and would have to would starting we leveraging Pharma out database. our AI have transaction other the is are on scale side. think the dropping into there And interesting. that in I the scale could was that growing it that’s think have We antibiotic about like I we’re tools own, an that about. we nicely. is said we Clinical what we channel our

a You’re you. talking it’s the history the we’re pretty over company and slides about exploring that something of valuable information Thank seriously. in have a of couple lot there million embedded

Puneet Souda

Got but it. if clarification And was an pursue assay? I know the with could, last if covered, this RaDaR don’t I just Thanks. you can ADLT

Mark Mallon

phone. on Clive Yeah. the is

you So to answer do want that? Clive

Dr. Clive Morris

Yeah. submission our said, question, initial the for for Mark track RaDaR And around as of we’re reimbursement turn Certainly. Thanks the year. Puneet. for on the

for to effectively We for build will and or pan-cancer planning we multi-tumor RaDaR. are use continue that

something further consider can you is And incremental part FDA tumor reimbursement that. ADLT are will So as well. a to path we data across and we paths. parallel see And course, expect of types of pursuing as

yet haven’t but anything that’s we disclosed think certainly So, we on around possible, timing that.

Puneet Souda

Got it. you. Thank

Mark Mallon

Thanks. Okay.

Doug Brown

Thanks, Puneet.

Operator

Your Mark next your coming pose question then from question. Pleases affiliation is Massaro. your announce

Mark Massaro

management year? and Can then of we you it might end change it’s just incremental should somewhat coming within guys. Board, pickup And BTIG. up team, get It’s on you but this market any Doug be any the only from you to in Board, wanted VanOort, the him the thinking? InvisionFirstLung at be seen replacing I in the not the changes it the recognizing about for been How talk is, Thanks. for, has direction? planning sense further any retire at that the Chair a about Executive Mark perhaps, thinking then early, making perhaps, -- to changes with Board? strategy to the role, I time? guys but also expanding strategic Hey, and Thanks. guess, some the as have you And Board to question first relates

Mark Mallon

Thanks, Mark.

three I in it. were say, there questions let’s think, So

time focus is in as that on with to able time InvisionFirstLung, to is impact So, actually, a actually achieve the the assessing Nevada. do uptake on research Medicine we’re performance redoubled from and since are It Managers test. have our we of with having. in lab great of one have August turnaround the timeframe, InvisionFirstLung already recording uptick based performance that an our started and also to see Precision the the apart This the we has and

is organization And thinking on to having what what able time. five-day diagnosis really wholesale right call patient, first, the the and about patient get to a right turnaround on focus just we based really also We’re first for a the to XX% wholesale these is InvisionFirstLung are be or contraindicated our pursuing And sample candidates cancer medically too and to of biopsy for patients, biopsy that. they’re for small. likely lung be aggressively going is great team

encouraged all far. I’ve so still uptick seen leading days. early performance. am what an to It’s So are of But those together very in I

with the Executive retirement and stepping moving and a at bit about of strategy as asked towards down the Doug Chairman the year. VanOort end You

strategy terms of Board created we year is I strategy, the and implementing created that past this In that strategy. the over we’re has the that mean,

the how see at on can basically, to In doubling the significantly additional that fact, how RaDaR gain levers data, significant out moving accelerating the is, implementation opportunities to build year, strategy a to spectrum across moving what medical research how down expand pan-tumor we’re be by behind and we of salesforce to we And building doing additional we next access, we’re to pull that looking team. space. going can can accelerate we’re

and still and all and of space. continuing and technology, aggressively the leverage great in the executing it’s in particularly the the with foundation RaDaR -- Pharma. maintaining a we bringing that tech new then to the that fantastic community first So strategy strategy. about of we the Informatics have That’s pursuing have opportunities moving in channel It’s

I would does the for shouldn’t we -- that’s say there just will many, assessing In are help I Board, Board -- and what that the the is what we’re terms needs mean, them the say to the Board, continue strengthen with reflection. that, I company self of continuously and what

the Board. keep in so strengthen Board to look of thinking how for can ways future. great that today And we’re a We’ve to the continue always and got we’re and going needs company the to about the we meet strong

Mark Massaro

so much. Thanks Great.

Operator

pose next from announce coming your Please affiliation Weinstein. is Your then question. your Brian question

Griffin Soriano

morning. This Hey. Brian. is for Good Soriano Griffin

last on earned? give million? you backlog and Can what you to work $XXX expect leakage Services Just that of be and that Basically, you out us through? that coming would of dollar to call of takes out Pharma that expected a be would over revenue question timeframe the when backlog us a remind of sense

Mark Mallon

would take you that? to do like Gina,

Dr. Gina Wallar

Sure. Yeah. there. Hi,

years So finish over and projects, we through. time some our the and three-year and course So on projects over? about backlog contracts XX% a average early somewhere three XX% timeline -- between see generally the go about of to average some converts of and an projects over come which about average of

Griffin Soriano

Have on LDTs expansion in you and see the additional really the that? And initial indications any when up don’t the roadmap expect Thank RaDaR, a announced indication, timeline quick multi-cancer there, indications? Understood. you. should then just expansion, on there. follow to And thoughts we

Mark Mallon

Clive, you why take that? don’t

Dr. Clive Morris

Certainly. indications, Short the indeed the will as I others given of around But details next no, subsequent of course turn haven’t first first say, and be and be year away will Yeah. onwards. timing see ones. what to we or the expect answer, one sort of of I during the the year

for of will So data reimbursement increasing numbers we the be use, we comes there. deliver expect submissions clearly we and there LDT drive out trial data, the as

Griffin Soriano

Thank you.

Mark Mallon

Thanks, Griffin, sorry. Brian --

Operator

coming question. from pose Alex Nowak. Your your next then question affiliation Please announce is your

Alex Nowak

everyone. morning, Good Great.

the RaDaR So around in launch those want the I reasons invest now. to assumptions and market team sales just to better understand

middle by new would you I there, the XXXX? planning don’t have falling to So at with on the hold on submit the are launch? LCD then, going you’re have assuming to your then, depending under LCD? you RaDaR? that reimbursement existing you least you guess, for gives just And going all if And back reimbursement, completely a an Are confidence you’re extra established Medicare of what you by answer

Mark Mallon

confident words reimbursement then ask strategy Clive? the of about why to aggressively want to moving say of So I to and to of am salesforce. I our about sort approach talk now going expand we’re Clive through and a couple

Dr. Clive Morris

shorts, we Thanks that. for and that. and around approval a we’re the what of we’ve plan MolDx get delivering through reimbursement so we’re clear in we have [ph] with through had be And to the to Certainly. confident in route our and path-forward against executing view submitting dialogue need to

Mark as on has are previously we track with said, plans. mentioned our So

that think plan. would be the So I

the started I with other we in commercial activities of launch, clearly, I as than am for lot sort through will of to will that Mark our trial work builds opinion leader lot key We’ve but the a there’s data, through. talk think prepare that Mark more about launch. our a needs reimbursement of sure remember, talk

talk reimbursement So, over that. the around launching will of the further and actual getting pan, I ahead things is moving to hand Mark but to

Mark Mallon

commercial particularly force just major there’s medicine. we’re work when reason because moving is trying so the actually in launch to the advance now practice a brand, to the of much you’re a aggressively of do of new So sales that change forward with

to have with the build connections need not and education only have oncologists. information You but This what level have is relationships and about a you of to got, you trust.

that faster anticipating to reimbursement opportunity multi-billion-dollar number almost oncologist us to of business. of we’re get education a the and be comfortable awareness help an asking really physicians patients this get and multi-hundred-million-dollar more off new And to are a be to available. and going be tools product. deal, a of going tremendous building certain it’s raise of is with There are but when do look options start launch sort a a things a confident comfortable all their we new advantage as and amount expect. assay place of a big at force It laying demand new the yes, going you those to take There going to doing that for assay on, that which them before And to get we in to - is also about can and would it. and groundwork the and that’s start. cancer prescribing is what You’re these about mid-year have change it’s sales have they’re this what’s a to of it’s to to you to very

And success and started foundation so that be to market. in too get the you a can the laying leader on soon

Alex Nowak

for volume details Yes. or into feed number the Understood. if you on was on all Makes a curious then QX just how or Just the the if then, findings sense. are implied investigation? lower it’s And those ongoing? long or more what could And the been the guide from not? investigation investigation expand related identified,

Mark Mallon

ongoing investigation. in this the investigation, terms So an of is

really that something year. say This We raised our to in internal we uncovered or than first So aggressively we investigation. more the the can moved we we really shared what not there’s and not is much the more of start prepared half remarks. than in

a up up As be to situation, the standpoint. customers understanding what an and we and to place make available, into small And fully the put aggressively from It’s information will update. highest a the that’s really standards becomes sure that basically made about as that are needed we say can of investigation. the investigate, number provide holding compliance we contracts well as more came changes we linked to with as any we to moved of

asked You about performance.

Alex Nowak

Okay. I appreciate it.

Mark Mallon

and I we see our think by. what the we in what performance future that’s about very stand we’re clear and

Kathryn McKenzie

thing I add only would The is.

Alex Nowak

I Thank appreciate you. it.

George Cardoza

We that this don’t impact a have will our expect revenue. meaningful on go-forward

as opposed the discussed delta far items any. variant So we’ve really access top-line to or that as relates and the the delays as to

Alex Nowak

Mark. Thanks, All right. Thanks, Kathryn.

Mark Mallon

Alex. you, Thank

Operator

question then coming next Please is pose Derik from Your your De Bruin. affiliation question. your announce

Derik De Bruin

of from Derik It’s De Hi. America. Bank Bruin

of space? then - it of it a physician - and also whose product go pipe payers. is lot sort physicians seems going the different the differentiate - And detail obviously, mean slow doing what better you a sort through I at approach between with down are there’s other of there of to in to look, lot how is what mean, could against different on what potentially looks like - that? I everyone’s doing coming than regulators follow I the entire education classes, of of information going similar tumor-informed the just going to be ones question through want asked all guess it companies like and competitors like maybe it there assays? is And the is a that of then what which a by up like payers noise once, being on better with to lot So are lot are information this there. and forward RaDaR. these I are uptake like going for and a faced the to you’re the doing and regulators on

Mark Mallon

It’s points couple So, good question. here. of a

lot of on So, education there a yes, and concept products. the going the is

be this around that is and to lot well so of how to occurring takes it A [inaudible] particularly this this market. effort huge disease technology think the I of education, clarifying. a so oncologists interactions in of is and education as reinforcing I There as going be is time. huge a small can number a and think of is and sort and lot used

that I building thing the market. players So good that sort think it’s there out a are of multiple are there

In of very clear terms it. on we’re how going to differentiate, we’re

potentially think detect we’ve we confidence with I simple we we and a and minimal this that. key we that can whole a we it. and how on class-leading It’s message have and the emphasizing think highlighted, much so As be quickly recurrence is coming sensitivity will feature thoroughly, and you residual can think test how is how for point the disease recurrence because deliver

the the physician right at doing. I place because it’s right is includes platform. the but way time with NeoGenomics to about channels in also other trust Neo has position our the the the think that position the It’s it’s that has relationship the the that the and education, else differentiating in marketplace being right does. what about actually also is nobody And it’s customer and about our

with market. and MRD one combined great our in to differentiate channel the lead So potentially going is to the what’s us class-leading success sensitivity number

Derik De Bruin

if Great. squeeze I follow-up. in one can And

be Services. You I you exiting you as be if had COVID that you that would guess million delays, sort Pharma a $XXX the of run this would rate million year these hadn’t $XXX about exit talked business on comment still this backing ‘XX? a at

Mark Mallon

of growing Yes. momentum if the there putting this suggests in revenue, interest but that the which really terms delayed look some and $XX rapidly going from million, much bookings almost through. the guidance, in quarterly sales just it’s the And line to exit you testing is that the at of aside and with delayed to customers come going impact has the very and is of it actual it’s business and

Derik De Bruin

you. Thank Great.

Operator

then Sykes. Matt from coming is affiliation question pose question. your next Your announce your Please

Matt Sykes

Goldman. from Sykes Matt everybody. Hey,

backlog path? me capital Just growth where Services, I of level in about from just about or support going higher your of what kind spend money, seeing just Clinical to in Services, of there your how about, for and I in to and level continue Pharma thinking just talked one Pharma lower you’re is a mind kind and are the spend market, spend about quick of that internal Services And one am spend am that you increasing you’re but allocation thinking that just order on the that given curious you business growth needed needed to in growth?

George Cardoza

question. So great It’s thanks the question. for a

I have already what is, first we would all in say, investment our of Pharma So Services. increased

sites those with couple internationally, a we team. of the sales, built that last of added up years were And As made you marketing, investments, scientific medical over know, substantial have and but team we’ve - we’ve right, course, they hampered COVID-XX.

side, Clinical virtual reduced program. of access it all or has a sort changed the Pharma on the with basically as Just access into

keep recedes, through of as have with investment teams that in accelerate done we we’re the feel place really we COVID to bookings we’ve now made, get resources it progress further. as to great like the really a more that Our we’ve just comes access, job and there growth keeping and but going leveraging got more going that and momentum

Matt Sykes

Thanks. Appreciate it.

Operator

your announce Savant. coming Your Please Tejas next question affiliation. is from

Tejas Savant

Stanley. Good This Morgan Savant from morning. is Tejas

follow-up the two of and one the a So investigation. me, for on questions guide quick

how outlook, thinking it of the the fair or for mid-teens of and more low-single-digit the segment assume impacts growth other? delta sequentially Clinical the you to versus towards So weakness one variant increase skewed in because is Is sort in terms each Pharma, about quarter-over-quarter segment? Kathryn, are of in the residual

Kathryn McKenzie

especially I When improvement at at not are right for correctly. to this back some pre-delta volumes we point. think you’re looking Clinical, about seeing we’re just thinking it now, volumes

starting in And still see getting of little QX, some pockets than those the so, slower through country returns, a but to as back are coming where bit we’re we’re there others. it’s

quarter-over-quarter included it generally comes increase we’re to a Pharma, but something what’s closely, when in that’s watching QX, guide. have we the QX. very part it’s So of

the will and I to to down access frankly, think come through from for ability comes our see it to again, that, samples those you clients. but

Tejas Savant

Got on investigation, it. That’s ongoing Mark. helpful. the And then

potential just personnel, have mentioned, changes potential place of in to contemplated to go-to-market historical forward you or restatements impact changes Kathryn, to can outcomes. of think, strategy any us periods I but you think about or revenue, just those your of any through sort we put in walk you will as in any no key terms

Mark Mallon

Kathryn. ahead, Go

Kathryn McKenzie

will go financials and I ahead the talk you we’ve far and about taken. the then to as as steps

meaningful a clarify, have impact is and to basis as So on closely evaluating statements. I just we impact financial internally want with to well historical counsel going our to external to not a any in there worked go-forward be revenue

impacted, steps investigation. We taken have perspective. I from result not no remediation as perspective a of Mark it a is need financials revenue on this any turn to to restate of The historical from but we’ve will some the

Mark Mallon

Yeah.

impact our and an have going asked our business you of about sort You or to think changes. also I have on one model about, our two commercializing of questions, is approach business but then question assays, this our the to personnel

and first So have for ethics. overall confidence our really we question, in compliance the strong

by have that how ongoing the in our top confidence leveraging model and products Invision our confidence that teams, our we focused customers this all opportunities that and so we on and sales like the great and new teams, we And and we’re have going team medical oncologists they with reports have have pathologist pursuing, adding emphasizing relationships that’s we provide RaDaR of customer those to on then new model the very great be really great base supported team that’s with XXX% a service Lung. That it. connections

drives shown and the well track a share and a that have and overall are is consistently growth that the execute be record growth that’s of model the ahead that we and going capabilities it doing. market really what has to controls We to that got we’ve

like issues make people people really a action the and investigation take of in case in of we involved have there great investments we’ve teams, talked change terms got them. and of confidence types about full scope then lot an we that were leaders thought our and changes, great In and have processes. effort particular In leadership our and appropriate upfront of have individuals, to this, We and right train I we that action taken personnel the control. in team put about, that

going we very forward. position So confident are in the

We’re not to we’re going to business continue relaxed. it. against continue look we’ve well can great a execute model got We to improve, and but to

Tejas Savant

guys. it. I the color, Got appreciate

Operator

question is Please next your coming affiliation Your pose from announce question. then Matson. your Mike

Joseph Conway

market to and guess general lab the modalities. a around diagnostics that generally maybe or whether around year, be next growth lower I going testing This lagging, a Joseph at around before, there just I to been Matson completes landscape has changing years? And amount guess is alluded some know But of be maybe tests. it’s five million in on that areas are Hello. for in done increase capacity now, the Neo Neo increasing five-year obviously, percentage disclosed of I what’s is adoption the then from any question Is give a this if that? to plan. to Mike testing going color but from you’ve build-outs an where if more can Neo tests Needham. share X you infrastructure rough incredible don’t

George Cardoza

laboratory, this Obviously will with first in test new we here brand actually sitting I even capacity. over our So looking we’re there week. Fort in Myers our our processed start

over can more the as weeks. do. Mark if So we in over had there probably in even stages it’s our we of and the capacity, triples significantly teams But in not than laboratory larger it coming what said, moving terms are our

And we’re adding also of Phoenix, where it. Atlanta, mentioned capabilities some We’ve up we’re in are add lab the recruit sort our again for of able to and also again talent be we and to to that Arizona. techs we’re need expanding going analysis those wherever tech. opened in dry We Georgia laboratories,

are the now, even So fastest-growing the substantially that is have. expand looking capabilities tightest modality NGS to one are as testing, our we increasing are we the place and expand in we well probably growing, we is and which we California, right are where in our which certainly, capacity, there

a Our be follow times RaDaR to there that great sure demand we’re RTP dedicated actually to we really expecting can beautiful a that have is make that we assay so new in we again have processed facility and have that test. and for facility going turnaround the

Mark Mallon

we that one where one particular system, with Yeah. I’d they Neo work have that just thoughts process, any gives overall test same procedures are the we regardless lab had is We network lot one work of of of further a network in on a great us that. part strength in respond One fluctuations the because us with on in for couple network, the of actually bit demand. have flexibility. quite tests and the to a and product flexibility technician assessing to any it so from can time at gives of those it have any

every got grow parts in your The think been your business second to about you’ve of as [inaudible] thing and When are George you more, has XX%, growing we how well, at confident or our overall day. capacity XX%, you’re capacity.

segments, to and demand. every California what like versus night sleep seeing are talked keeping to some every And ahead up can make of so we in sure capacity thinking we’re morning we about which going do waking further we

another is of driving then, the - we share. growing had keep do question about the You we think do core sort How right. we business, as how

I our so in think to competitive to that’s we be the going think got able we’ve got it’s the make to that our things. expand through part big of marketplace several that team, resources One sure we’ve is are being right. and

with without success have base to base To business. have billion great business. that we launch have to $X continue RaDaR to that but remain pulling RaDaR, still great the want the off able our be we with opportunities success So achieve in to to ambition, we have of

to that. resourcing do we’re so And

are is I there so things to take got and That’s to think that our we room is assays time, we’re record and patients, success going us a leading being how here. market, partner are we’ve driving oncologists turnaround with in we we’re to got that highest with - allow going led And have the assays community that still grow maintain have here the to so we’ve and leverage pathologists and will But continuously great great very sort of faster those so to do that. keep continue service, many to improving to quality to there to players growth the we’re our we leader. at share. always track of growing our many - going and a to current the

Joseph Conway

touch Okay. this that one, specific just then quick Great. on quarter? you a maybe uptick in a can helpful. super saw R&D the pretty number. That’s We investments in And large

Kathryn McKenzie

Yeah.

to through Inivata. So that starting see come really for is investments you’re the

and InvisionFirstLung and So really if we’re the that’s your doing work you increase. about there, think RaDaR

Joseph Conway

Okay. Great. Thank you.

Operator

That like over to have today. is floor questions we the turn for the would Mark. back to all I time

Mark Mallon

maybe difference mean, is comments. thing message say to the I they out reasons believe oncology a on leading incredible have I passion Thanks. making with the around team an and the have think two can dedication They world. most diagnostics for information. we why a just on and thank sent are appreciation normal patients will almost the for important and I capabilities we cancer close members you, I X,XXX NeoGenomics commitment and

team already want we the to becoming I you forward Neo of and or investors members in to tell of all things particular, those all the Neo, globe. Neo around look those And dialog interest. are to really you thanks your in So, continue thinking thank also our to to exciting that opportunity appreciate this and to NeoGenomics. in We really for appreciate investors we ahead have about of

Operator

you, call. Thank does gentlemen. conference This conclude and today’s ladies

your day. You this at may and your wonderful time phone Thank disconnect lines for have participation. you a

NeoGenomics (NEO) 4 Nov 212021 Q3 Earnings call transcript