NEO - Earnings call transcript Q4 2021

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Operator

Good day ladies and gentlemen and welcome to the NeoGenomics fourth quarter and full year 2021 earnings call. At this time, all participants have been placed in listen-only mode 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, Chief Executive Officer Mark Mallon. Sir, the floor is yours.

Mark Mallon

Thanks Holly. everyone. morning Good welcome year to NeoGenomics quarter fourth I’d conference you call. full XXXX and like to

Joining this George Relations. of Bill operations, Development Bonello, Chief me Officer, headquarters Officer Doug our Myers on Operating Eidson, Strategy Chief call Brown, from and our Financial and our Charlie Investor Officer, of Cardoza, Chief and Fort President lab our Corporate are Director our

and of Morris, the on phone Inivata, Taylor, Joining President Pharma Clive division, Dr. Gina our President are of Services our Waller, of Informatics Clynt President Dr. division.

and will Before non-GAAP we remarks, call. prepared on begin used our discuss Charlie the forward-looking statements measures this the

Charlie Eidson

conference This in to such uncertainties materially that anticipated forward-looking and operating projected XXXX our results results from could and those cause risks initiatives, and actual forward-looking about to subject XXXX call performance. differ statements. outlook, are opportunities, includes financial growth These statements statements

statements. obligation SEC. available update during and the XXXX section Exchange of Statements Additional subsequent website well our we XX-K filed Commission issued filings information heading, on date XX, report to year the regarding for morning any Securities www.sec.gov the of with statements original these Forward-Looking this the is we the under Form forward-looking these at the factors ended release as no with or and press www.neogenomics.com, our at and call undertake appears annual and speak as the in The December made as only call Risk that in risk this of and of Factors the revise

the measures involve to to reconciled to not measures by presented we operating on GAAP, to financial non-GAAP directly financial Any greater the companies. conference financial are GAAP transparency be financial this In measures this in financial non-GAAP provided press results. should non-GAAP required be in to to measures referenced financial should our release are comparable adjustments unlikely order These be that certain to the a comparable non-GAAP give the we GAAP alternative liquidity, to considered addition, during by call of measures and issued available refer not measures other most an be performance, table call in morning. measures regarding

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

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

Mark Mallon

Charlie. Thanks

and of NeoGenomics financial For the new full more a a including today’s businesses, XXXX the to Officer, Scientific briefly on provide XXXX Chief an key each highlights, then exciting Bill leadership our discuss new our I’ll Dr. financial Vice President team, year detailed of and our addition of XXXX review Executive introduce four Shashi and updates will results initiatives, provide Kulkarni. R&D outlook. call, Bonello review

was XXXX NeoGenomics. year Q&A. an We for then will eventual time have for

under team Our providing in growth employees in care took environment constantly I’m cancer successfully strategy. excellent steps and for proud our showed the the changing patients, important navigated resolve difficult of executing incredibly often circumstances. our very

the are Florida capacity excluding clinical projects, revenue. COVID represents and the will from in year-over-year tests with These year laboratory lab Fort near majority and over given XX% in consolidated almost of lab headquarters move took strong the the complete triples Myers is In final Our stage This to labs set in our facility. April. pharma challenge The operations revenue and our extraordinary our X,XXX moving revenue. on environment. million growth and with in teams support results our into our XXXX, processed The long also of the growth occur million the ending term. $XXX PCR new new generated testing X.X

we the NeoGenomics. boost will Inivata years and fully both remarks. fits growth Both in the proving During the some ahead. strategic our touch executed we are two year, also progress groups and highly organization be cultural Trapelo in acquisitions integrated believe on to strong on that into later are by I’ll my with early

revenues clinical certainly are is acquisitions which of XX% our our of While foundation more business, company the our our in than represented exciting, XXXX.

of levels, new drive are again hospital net promoter XXX than testing. average to factors their strong us customer score one reference comprehensive our our overall of and approach. our want also a support position December leadership Economics, the and key track delivering elite and in survey of achieved strengthen a conducted only in I labs our result. Neo through of year the excess independent more our cancer partnership market thank committed customer as reference tests results by our menu accounts preferred testing to These Laboratory NeoGenomics a our service customers the continued our retention. customer number by have world-class levels national in tests that the relationships relationships, our care to ordered for and We lab managed high service. pleased which view growth employees, as of cancer of share and hospitals XX, is differentiating In by named This the cancer, primary exceptional supported many of for focused to was dynamic lab during record XXXX in on who XXXX, and I’m pathologists. critical our

been the our the January operations to gains of that highlighted ensure as so staff than the To anticipate was share the in will side pharma business. expanded years strengths turn quarter our and we has continue date clinical but XXXX services emerge from we apply business our January. meet variant that market can pandemic, our the we’ve heavily additional page the and much pandemic. for drive said, have this needed. to impacted play February in lab confidence have we used better do out omicron we will we COVID-XX we better as demand, the formula to XXXX our business As of similar March, I XXXX, an been of to waves Many clinical previous to challenging. also by to has on one even in With

biopharma our Our on focus our service cancer, service customers levels. and our clearly appreciate outstanding strong menu, comprehensive

leading offerings and an the Demand booked $XXX clients clinical contracts test launch global of we million view through through are in us excellent Our ended strong, our across footprint million been reasons pharma new channel the why partner. signed has our in course additional pandemic service over with backlog. to U.S. the and as $XXX and an ability year the XXXX a biopharma in

pharma Our COVID-XX despite revenue XX% in grew impacts. year-over-year services XXXX

While of that a have our us these XXXX. This normalize. of backlog this COVID-XX conditions great will to in slowed in many convert conditions as will revenue, we position pace converting projects believe into put business grow

China progress global successfully up the in extremely from strategy Suzhou, We year capabilities a demand customers during also made new services opened and pharma biopharma for been our with in strong. has China. laboratory The

study and be to using international leverage arms compete We focus our operating global to lab we will look network strategically with power global we now as trials believe to studies. services clinical for set. that on clinical for filling labs important the In is our our China-based largely in profitability. of expect China improve and XXXX, We pharma

this efforts to informatics Our been in by and COVID-XX. rapidly growth our largely continue progress trajectory business unaffected has

Trapelo biopharma a anticipate feedback in results. also by already start middle Our this builder from quick The good we web-based team scaling getting next launching will very progress tool of generation sales software-as-a-service is oncologists, clinical decision launched that the support for is a clients. accelerate team Health January cloud-based anticipate making this tool on year. cohort We and the our version

performance oncologists For our support it adoption indicator by platform, most Trapelo the and are closely. decisions is monitoring key we clinical important

potential and leading per differentiating, sensitivity and will progress minimal with primary our are this our biopharma and goal resonating accelerate adoption acquisition, we with the realizing a of announced be the over than made is less residual the Our Inivata DNA It’s the detect recurrence of down and tumor of as to RaDaR. levels proud to The ability million towards in blood clients. course XXX% XXXX. has specificity is since low team we the been XX% year parts XX test disease assay’s circulating to as

sales growing pipeline robust quickly. Our and is

times confirmation peer-reviewed also in evidence remarkable had journals. We team, regulatory and the data samples cohort detectable from announced were patients curative parts announce patients a month, levels this LIONESS X and reimbursement is monitoring sets important expect over cancer the minimal X tumor recurrence focus detect will This to to remains ranging detected to a All recurrence we publication Earlier head In considerable six sign which low RaDaR Cancer. at surgery, ahead published from multiple residual clinical the out clinical this to XXX using tumor received team post longitudinal indicating intent days. two patient treatment made clearance. our cohorts specificity In number with and the LIONESS primary after cancer patients XXXX as progress over no DNA and represents first detected, taken XXX% a published remaining the XX of has confirming British post-operative stage the generation surgery. time. in as for anticipated significant the clinical disease million head ctDNA of neck and have on backlog blood of in expected ctDNA course to year, with was the tested trial there lead be contract the with pre circulating of XXX or of study, data to who for milestones we RaDaR was pleased January. to pharma and prospective first and read the surgical to peer-reviewed RaDaR. The neck front, per surgery. in of patients, we were XX Journal In result. prior This Evidence add assay five as was

for Mark systems and to we ability research. and First, patient be we received us make to which will important test to management for allow clinical CE hospital this clinics support and the RaDaR, Europe biopharma available believe throughout

on Washington over for ahead planned are testing this capabilities a considered in focus submission month, to it over precision to in growth. goal to are as and the the excited improve an Bill, an working for cancer President boost roles talent towards a market clinical, we our world-renown the will role. a to We’ve future important Part U.S. trajectory RaDaR us incredibly expert our bright Miraca track the Scientific see the prognosis leader, company. and I The added the laboratory middle genomics before bright via pathway. remain and genomic NeoGenomics. upcoming to progress experienced combination past commercial commercialize and of coming He we we pass Vice Shashi He and world-class in that laboratories key indication unique assay of announced growth MolDX XXXX. the Neo commercial scientific, like the and information is our of have disease first and Earlier becoming drivers differentiating and brings around technologies partnerships also the I of played of This leader To opinion of and Officer. our application diagnosis, Executive clinical keeps a Dr. having of with foundational leading Dr. our treatment. submitting commercial, about of a to across we Kulkarni addition Second, Holdings. our team. adding is achieved Chief as top businesses summarize, years. of the position truly appointment the I’d on at is as market reimbursement attributes in future leadership world’s regulatory made multi-omic in R&D the that Baylor’s key successful with of human cancer for towards and that University so talent, new highlight clinical understanding the the making Kulkarni

to get us of oncology such teams. Kulkarni innovation a and Bill, to have research March Dr. research genomics turn member the medicine. our network innovation of know our expertise, and CFO to respected and thrilled a drawing team, and the Kulkarni leading very executive of well strong call our discuss are four He I be a We authority of precision details on years now over excited global like of joins quarter officially for a on he’s X, started. some vital I’ll will peers, to financial Bill? results. Dr. our passion other

William Bonello

Mark. Thanks

and XXXX. walk revenue I We’ve out quarter stopped the test to of initiatives volumes decline our make during useful COVID-XX emergence increased test the reimbursement of volumes COVID numbers, is PCR up rates that quarter to which year-over-year quarter wish X% first we this per testing revenue comparisons revenue made a reimbursement but COVID division per November year-over-year revenue of subsides. driven consolidated omicron. XXXX with the The receded initially the saw Fourth the throughout X% that up anticipated. more saw then through Clinical improvement exclude from Before COVID and period steady quickly million. billing the with variant higher pandemic, decline per I volume in adjustment testing. was as growth drove Clinical December volume in by in surges recover QX again test in test cite our of X%. average revenue October the we experience from year-over-year increased We and revenue to prior recovery performing as division the primarily as with Consistent than $XXX sequentially. increased X% X% $XXX delta and fourth point X% and

revenue increased XXXX, year-over-year. per X% of all For test

expect our a services of would revenue $XX line AUP test we Pharma XX% to in record be year per in year-over-year with above modestly revenue forward, will that the Looking increased million quarter. fourth to $XXX. full

full than $XX increased pharma to year, XX% For revenue the services more million.

projects to classified $XX were $XX of a dormant project the by once a million. as cancellations. primarily and million, bookings million, for driven $XXX were strong Cancellations quarter New few larger backlog year-end again leading at

are optimistic strength as business look We we this the about and to XXXX of beyond. forward

non-cash COGS impacted both typical infrastructure from pharma margin than and GAAP which supply adjusted and gross margin services growth Total Inivata-related on non-cash clinical cost our impact lower related growth amortization total Inivata Gross gross coupled XX.X%. was Our the margin, with reflecting was fixed was acquisition, inflation. sizeable XX%, a to revenue by amortization. volume excludes largely wage

the during addition, new In Fort fourth we our facility. lab into moved quarter Myers

and we the Myers productivity two drive related Fort will transition. operating did to labs move efficiency this extra during While improvements, costs incur different

impacted related credit, prior a to Our tax credits reversal $X.X employee gross margin was also ERTC. million period the of or by retention

continue to we from us to in over we reversal that guidance a change margin credits years, While ERTC eligibility believe credits may have ERTC has appropriate evolved ERTC, is basis company be by support eligible past roughly for of prior IRS fourth the credits. period to or evidence that new until related the of the the unless leading two certain the in points quarter. in The the gross credit reduced XXX conclude

be. not quarter Omicron been prior should and or period have notwithstanding, gross this inflation where it would reversal, gross sequentially. XX%, margin Excluding fourth essentially margin is flat our consolidated

and the drive pricing. We Driving expansion are XX% return product, I gross top are payor taking $XX function better near Operating plan million. improvement, efficiency we mix, that or customer term address role, through step to automation, me long into year-over-year term a in cost to credit structure The quarter. EBITDA priority of gross action loss to Adjusted Inivata our as improvements pharma am and to million expenses productivity step CFO and and time. our a new process related services million driven previously reduced developing we can approximately well $XX attributable million is margin retention confident RaDaR, the to investments acquisitions I margin to increased as for and The tax in EBITDA by period by is QX. and prior employee discussed additional $X.X investments of to offset adjusted in growth. significant contribution assays, and primarily core increase by was including the and assay, $XX was the clinical support develop reversal from Trapelo MRD business. as the over to loss launch credits The

this change quarter. the periods, million EBITDA prior estimate in of a in accounting been for $X loss Excluding have adjusted would

M&A well. $XXX cash with sheet, we marketable sheet believe us securities. We balance Turning well with fund to quarter to to initiatives million positions our pursue balance the as four optionality our exited growth and in

guidance. Next, discuss I’ll

revenue of top million We XX%. expect full equates to XX% million, year to which to growth line $XXX of $XXX

of to EBITDA million We be to $XX range negative adjusted negative $XX expect in million. the

guidance and down Our would both and revenue year. is than EBITDA a that see sequentially adjusted we reflects QX typical lower in

the January during the discussed our call, we As impacted was revenue cases. by significantly in COVID-XX spike

continued QX impact we have to of $XXX sizeable in million From enough results, the so will While have a to able we expect capacity as increases to a January $XXX recede. that labs therefore perspective, our seen in are volume we volume come full million. nice range we to recovery the is in impact be February, at to that incidents our COVID staff revenue profit quarterly test of handle

cost from We impact significant both are wage seeing inflation. and a also supply

With these range the million of factors anticipate EBITDA negative $XX we adjusted mind, in in negative QX to million. that $XX could be

Our on profile results view to anticipate outlier and QX growth profit expect and significant business. of underlying increase not the of a growth that first year indicative view our progresses. be see our the profitability of is quarter and We as will

Our from the mid-teens million guidance year begin implies $XXX growth quarter and with $XXX our as a fourth of return growth to third in remainder expanded outsized to of to force. year the full for revenue sales reap the benefits million we revenue

realize We and each revenue also sequentially quarter our EBITDA cost increased leverage anticipate fixed decline as that loss we structure. will

to EBITDA. year an XXXX in outlier be adjusted of also We terms expect

associated generate will we’re significant and support before making incurred liaison size evidence able generation sales and science the an marketing product. expenditures to costs. our force publications, revenue studies and and a clinical support launch increase substantial this be to from of in to are medical team, new investment These We including RaDaR,

RaDaR to that XXXX, Charlie offset revenue beyond businesses, again by to the be will now anticipate we hand look in will through Eidson expect EBITDA our and XXXX. from in I profitability investments turn Q&A. we positive us our core once continued both increased to we MRD lead and over call As

Charlie Eidson

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

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

Operator

Your your affiliation, is question. Weinstein. pose your question instructions] for [Operator from today Brian then first coming announce Please

Brian Weinstein

the Hey guys, Weinstein, inflection as know inflation comments out the you made cost on really question. all more I seen significant was. January, provide significant guidance just on impact think taking some there wage Blair. Brian on have significant that general. you and about and in in on the talked well in William of how to Thanks the way, for context guys I - get you bit to the a could the significant revenues caught impact Bill, that a you hit of impact little the that that - you was tone for as hoping I -

result there maybe being more be with to able a effect you of I’m made delta what the effect on last this about kind to time, effect sense. conversations hearing, called and as in talk but you not from not and guys lingering about you we Hopefully delta, difference relates from customers a all that as think seemed get it not omicron them, with can that be. of heard hearing lingering have of what we that I’m the to quarter a As between lingering so conversation out

William Bonello

you Thank very questions, much. Brian. to absolutely and happy I’m Great Sure, elaborate.

grower terms First as our QX do a revenue of of think in we omicron ourselves think mid-teens revenue on of implicit that QX, we the normally volume be guidance all, revenue grower, from what in and impact end in mid-single in is of QX. going mid-single vast of impact you be in when is of and the digit, The digit fact saw majority to we of that the January. will low on

we recovery January. to just COVID of we in in on impact and starting that be We’re so the see it the you of March, saw expect February month sense the magnitude revenue gives from to some of greater that

In supply expense, in and in to will so throughout X% things don’t that we on taking on quickly, that’s that why inflation, apples-to-apples that anytime of terms the have X%, seen years, which in might level, higher in impact what cost are the what payroll QX results than of significantly we’re been more seeing I of the an would an wage well. X%-plus and change absolutely to and are obviously is have subside basis margin X.X% have year range of some in discussed. we we prior terms We a as results, and expect that’s seeing actions the that and

terms In about we of lingering question your are effects, the optimistic.

green seeing shoots. are We

our sales back to We starting that hear front in clients. of team is are getting

that know, historically aren’t clients, share difficult come meeting our of half up, and in growth as we well so patients market face utilization year that rates with as the achieve very to picking out you you back move being has we’re things It’s now as As throughout the face tested your opening of about when rebound, are growth obviously, treated. gains. from optimistic up to very any about

services to green back also side pharma that up seeing end. seeing and open begin We’re on on the shoots things some

substantial of You that won we could amount see a business.

a picking with activity delta. trials to less Our yes, and so enrolling up job business, the factor or trailing that a much of those convert of great what revenue difficult discussed to starting, than done wins hear to back much pandemic team of starting we’re trials so pace, at when slower clinical and we are it’s aren’t through a but enrolling, winning has

Brian Weinstein

one Thanks. the question Great. I’ll and later. respect talk guys rule to you

Mark Mallon

Thanks Brian.

Operator

your question. coming is Please your affiliation Mark from question and next pose Massaro. Your announce

Mark Massaro

BTIG. - obviously year Hey about heard etc. outlier spending it relates for XXXX talk Bill, Inivata, guys, being for Mark at you I question to as an thanks the

the on you call, XX and give or into I think I other that any believe XX I’m Inivata us that, areas versus you’re if headcount, medical just able about update an investment and talked liaisons. quantify give details reps, sales would on to you and additional about QX if can curious going plans to be the add us science helpful.

William Bonello

going dollar I’m if it. talk we’re that Mark turn can about Absolutely. to comments what with couple doing to sales wants, and one around over add the force, a he to I

Mark Mallon

the question, for Thanks Mark.

As we communicated in the third quarter, we’re team. on track to expand our precision medicine

the We’re setting team second up a in second quarter.

be We’re our onboard oncologists. first also and really going medical those of assays to to RaDaR out in both NGS liaison our science bringing support team, reaching other to

portfolio the of that with to second the line got total resources We for expand in oncologists, the oncology. RaDaR, we that when will in supporting through started NGS half year and course that will our in behind of make receive the offices with we the we’ve from right to sure expand get MolDX quarter, then the with reimbursement and of RaDaR second level team

William Bonello

Did that answer your question, Mark?

Mark Massaro

sorry. it might the and XX I or--and the missed is Yes, adds, apologize. I headcount in XX reps the that missed - if just number liaison it, have range, of I

Mark Mallon

the set we’ll be continuing but XX quarter the XX up second that that We’re and right? in of the is to that in plan The MSLs, team the the we with line with, X will expand that opportunities so to about we talk course to going then did year, see. to start and announced we we’re up plan getting through up

Mark Massaro

Excellent, thanks guys.

Operator

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

Alex Nowak

Great, good morning everyone.

cancer revenue and and then the know half diagnoses, What a for contribute? into and the are if guidance, what how baking understand these impactful also initial I’m going reps of just to Brian’s visibility around questions to Just sort there, the acceleration focusing new you have here, couple back but I there’s the RaDaR’s can trying to on contribution? guidance the second the cancer of then visibility additions-- that, do you rebound question, cases, quickly on

William Bonello

Anyone? Operator? Alex?

Operator

live. still is line your Alex,

Mark Mallon

Alex, go mute did you accidentally? on

William Bonello

so people he don’t and Operator, question. back, it, on to the call the complete got gist could hear Alex question. I why of I--I other comes that, if can we think respond the the the can

clip what and the closer for we’re at and so of pretty guidance, year, of on terms projecting we’re that remainder is to we’re that smooth In high sailing assuming of would growth the a be front, Again, our that COVID range expecting the intentionally COVID a XX% of the in end allows lower incredibly of guidance virus environment. to difficult for because wide the normal growth a we throughout COVID has as continuation we and We some good did range give move revenue that the clearly recovery. of predict, the end been know so the revenue year.

so force, In of half for what have that back the anticipate our impact more sales year, we of terms of do sales the the they of be to from the new in we will contribute revenue. than itself, RaDaR reimbursement. think from particularly may assay of market will securing the though of back oncology we the into is as sales do well following preliminary NGS half other we RaDaR it products have the year, the That in

revenue of with that will also significant We the RaDaR be business, couple the more and some we think market picking services up the years, on pharma over to of from RaDaR the have contribution in side that time. our revenue clinical will first

Alex Nowak

Okay, great. Appreciate you. the and update, thank

Operator

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

Mark Mallon

Hi Puneet.

Puneet Souda

thanks. Mark, Hey

one. it to question, me let keep First

get wondering expect baking pharma are you’ll quarter just the indications questions first or with in just in think that but you. are RaDaR growth about, gate levels for to to we because first should the should well, of obviously think for number baking line in MolDX? brief talked that and be obviously a there side, you could in quarter cost quarter in? there, If costs out elevate of Thank elevated as XXX time that from guide. current Is and fourth that I on the right be the the number growth the you’re clinical--what’s a ASP? the first clinical the are You the pursuing follow-up quarter, what into of I down at sort about submission the the the we Volume to then appears how and the on launch of

Mark Mallon

the the and growth of I’ll number me mentioned. and questions, Let on Bill take couple comment let a revenue questions then indications question you more the specific

over into with effect XX%, about Our you we’ve clear are aggregate can the the of what or talked from pharma. we we’re in clinical, time last clinical back we in a of mid-teens think in and low return three from said, standpoint, that quarters. part what quarters the the view about would talk and we for are both aiming about of pharma the that we’ve last expectations north saw In getting first as at seeing, is, we our quarter, businesses, expect in being line certainly so teens, for the if COVID business a being we revenue growth to grow business our in three that get

is we’ve types but pretty see for tissue RaDaR and team both until we not of that comment three information. we’ve COVID, areas as multiple you tumor I [indiscernible] breast twists motivated in resources for and including said indications solid follower turns cancers last about indications, areas. fast sensitive We’ve we this shared we’ve as data the that’s a good we’ve competitively got and got cancer terms or with the in of to pan going is in [indiscernible] we the we’re months. get pursue and to think want no place, and the assay, range do to--oh, and Bill, feel the of from assuming in much broad on lung, we’ve and clearly reimbursement, a the got tool before, place, which clinical. Bill? able in opening we’re products up approvals got and programs already energized, and a both access

William Bonello

Sure.

have average reiterate the and the line that. could just On test on in inflation, $XXX year average terms call we would initiatives with reimbursement revenue I We up drive expect revenue per full to test of upside to cost modestly. interesting that of per to we number - amount in do a some the be of will what said

think we the prudent a to that’s schedule, from put the fee there. flipside, so Medicare there physician pretty is On some pressure number and out

that’s QX of around is year part In inflation, challenge a - the as guidance well or that part as we said, X% the is, than sequentially. for we to down from years, other guidance. The profitability inflation in payroll as revenue as we’re higher full be QX so seeing terms and standpoint big of significantly contemplated of expect so again

started of We need temporary to that bunch volume as prepared We as be the it quarter. have to overhead cutbacks volume do, immediate not, when particular omicron. staff the and to aren’t but a it going result when profitability resurgence there to on our a make to a of in comes big the you has back, handle a for laboratory hit that’s

Puneet Souda

guys. thanks Okay,

Operator

from today question. your Brennan. is Your pose coming Dan from next announce then question Please affiliation, your

Dan Brennan

Cowen. guys, from Dan A Thanks - you? Brennan how question. Hey are couple part

that would at I on all Then you I’m how break in given contribution what’s wondering on you compare trend, how given First, about, some Informatics, you’ve which the you’ve interested particular does score, what helpful so expected was feedback wondering through you promoter from managed calls, guidance, on comment given hearing the the I’m discussed the if what in been could ’XX a COVID, talked has well. the NGS, issues and that you’re Inivata, secondly be could if net out the bit, as little from from to field. prior this staffing recent

Mark Mallon

Dan, then the I’ll second your part. question take and on part the Bill will of first comment

really promoter maintain on in good We metric. is net this continue which to score XXs, our the

you in would of basically other colleagues that the businesses, despite It’s We’ve XXs, so those services who very type the I’m are of and it to--the proud your For of to of bar. to it, the a really they’ve that been is of detractors. clinical COVID, actively those minus familiar and team despite that team, that, would had those service. be challenges it with sustain net consistently promote customer high not access, able

but little to part core bit It’s same world, to interactions. to the It’s up harder a they’ve interaction starting score it’s that as comes over really well we’re see in really gives over put years, have we we’ll when opening we face business. two clinical get time and biopharma think I the the strength, last back they’ve the in a in biopharma that the us relationships great part as progress confidence effort chance with type of get companies. of built service to and that in of customers, direct deliver a and lot our more further our business access of that the to similarly our a and a level it terms see of of testament the really in years

meet Bill, starting face-to-face to of which so way a important other year teams. customers lot really the coming back, of a to sales rest take to the look part to the of want as you see We’re is from with question? things in biopharma to well, encouraging forward the our conferences

William Bonello

Sure, we don’t for to businesses. guide the so rates the Dan, growth specifically individual

longer it we acquired that’s in of expect maybe said business our We of in modest the term Informatics we’d we expecting of to the revenue. north to so contribution, and initially XXXX single that and somewhere time We Inivata at have be XX%, our a first said its business terms in of what we grow grow have that expect we in pharma had year, north services would expect that XX%. revenue to digits

at I would our think more rates, from and as less Inivata Informatics term pharma long and be contribution I or modest rate with from from growth look growth to some consistent the well. then

Dan Brennan

guys. okay Thanks. Got it,

Mark Mallon

Thanks Dan.

Operator

your Please Cooper. question. next Andrew affiliation, from pose question is announce coming then Your your

Andrew Cooper

additional give just you’re but for sense everybody, to Maybe can disclosing on know build-up of this think not from cancer you another do like Raymond Cooper to that over I what’s submissions, pacing might Andrew and the you go to you many you what how have a it applicability that RaDaR, going first ask time? indications the for Hi year, call James. pan you’re way, maybe looks ready

Mark Mallon

to Clive? Thanks Clive I’m to take ask that question. Andrew. going

Clive Morris

thanks can you okay. me Hopefully Yes, hear Mark.

worked indication mentioned, that you we’ve we haven’t initially As the through. disclosed

this indications way a a there’s see the out--you indication. then deepening new build RaDaR we a each program through see building as this know, I to well is starting across for potential multi-year see out broadening of indications as and first the within types data from tumor into journey, think evidence, the the breadth as we this think to best as huge potential We market. but

may specifically what this on ones be year. how there many commented We or additional haven’t

into additional but present point Our that submissions It’s time things there those types, at be view start come year, a data can those but publications. the is this not will you lead the to to as imagine we exactly been six to beta that I we as this need applications. support through then there’s that ultimately we’re at as said, conferences, peer-reviewed disclosing will nine-month that tumor reimbursement need

of changes course, are look a any publishing If this lag, say presentations, other at in it’s a where course the on of the then space, then time. it’s in you’re type the sort close reimbursement, little conferences, major a of see, a number that guide will will get eye we last we’re environment, as would so ultimately active a things that be to I landscape, as we’re of gain other will keeping this things only can the it year something and of sort you that into dynamically and publications companies is, that The competitive us into number expecting we the with thing expect peer-reviewed and reimbursement. of things of year of to and time go over

be our plans, doing. to others own what reactive have are We we’ll but also

Andrew Cooper

Bill, $XXX how year? for If for more maybe Can thanks. of a that you the was mentioned the just prior of one make-up some quickly period in initiatives for I ASPs driving the true in the full give you can sense reimbursement about the to much Great, fourth squeeze relative you maybe versus--or quarter. talked

William Bonello

in of number paid looking would could etc. proactive successful. permanent us in terms previously course. $XXX and AUP the opportunities realize not a most that’s working of number because ongoing would Again, the slightly initiatives to through QX to expect Again, of that of being be of the revenue assume forward, anticipated, I to we’re think that had we and the in different denials, of allow them drive was a range in that benefit going if higher, able Yes, you increases forward through reimbursement get to we

Andrew Cooper

Great, stop everybody. Thanks there. I’ll

Operator

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

Derik de Bruin

from short Hi, got Derik it’s Bruin ones. of a Bank few I’ve America. de

incremental update costs us you the the that are on can all, that’s of associated regulatory with First what matter - and one.

two; levels, reimbursement Thanks. assumptions RaDaR then ’XX. for in pricing amortization that’s for and list Just and and anticipation your for depreciation

Mark Mallon

to and amortization. matter. have first made updates the Bill I’ll question we significant the Derik. your Inivata, back I’ll answer don’t that let disclosure around to the pricing question the I’ll self submission Basically on let take give Thanks on Clive the for on on and come question compliance then we

taken Our can continue large this process. of through needs meet to the although we’ve it we a of investigation of the actions part is continues, and any remediation complete, government the necessary everything self-reporting so all do to

think it of expectations significant the continue not this in than XX-K everything to government see to do million, was will the to a accrued done a more the meet submission. we bit increase do Really, a $XX - You slight so we’ve up change. $XX.X in I for this need about million amount to and in $XXX,XXX, from the just

additional Now by to government, is the is feedback to driven largely timing of the from going news which hard predict.

you to talk the for driving going way you and when values to needed this was on business that. looking the the and and through Clive, do commitment this the confidence forward, exactly would forward. I remediation want want came pricing organization taken has. to that and XX it have steps As the RaDaR? about this focused handled high compliance organization we’re past here We’ve do the We’ve months I in

Clive Morris

Sure, certainly.

through the this I whole sensitive, high exome then across will specificity is market. you’ve Clearly the is but seen the that, be the blood, think so list what tests establish there and the disclosed builds comes that over the of for course coverage this you high get initial building broadly consistent reimbursements, probably at potential the on but the will with initially and indication, it. through, the some haven’t to quality, really future, the payors pathway. with payor and the worked there’s it in we further the component of out tissue-informed, sort Medicare our color at like that’s We has once we’ll about good point data of few onboard MolDX that’s best The that’s back I we’ll reimbursement that it’s reimbursement something you’ve the high analogs that on got comes pricing RaDaR. think so and think on for way coverage, so and be but that pricing of of how any first something that next private through, see as sort course, point, of on Hopefully ADLT commercial through, to market in We something course share Clearly of details do nobody status gives that’s negotiated can that. but one think years. the the Medicare

William Bonello

our of do we’re developed big assuming million timing intangible of curious, such from include Inivata amortization that income see amortization And the is adjusted for of to release acquisition about guidance have depreciation. we of $XX we partial the Page and XXXX. we asset, Derik, in amortization, that you EBITDA, assumes case our The so XX instead in that. that million a full the depreciation. table that in technology of our on give such of uptick XXXX. $XX of In amount of terms people Amortization million amortization about year items and was and reason gets wonder, XXXX a anyone’s $XX an in because of the press a guidance year a you If for as about

Mark Mallon

Derik. Thanks

Operator

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

Matt Sykes

margin a to beyond, wanted the taking leverage to the might number, see maybe of the help just and Matt take? is cost of kind how Sachs. from that maybe over gross clinical you you XX% over that Just Sykes on up levers goal an through ’XX just progression margins, aspirational actions the are sense questions, know, from--you the Goldman fixed Thanks for much versus and for get level. everybody. that you and course where biggest outlined gross Maybe morning pharma to to good that Bill, get leverage of cost us time. in walk Hi, my goal

William Bonello

Matt, back be that Hey to gradual a lot question. up thanks that XX% a progression will It for level.

The A as I rebounds be sales as big will the factors. by emerge series structure existing larger revenue we we and think of be generating COVID process will structure improvement efficiency be productivity in automation, improvement. things that it longer efforts be drive as are That of well. fixed environment, leverage part as a and cost a on have hopefully that the across will continuous term driver. immediate it and the driven such out revenue of fixed across the COGS of will force gross driver laboratory, to is margin those and

secure that We all will time. a about, overnight. over also those target that RaDaR. on our a on continue will happen drive as one initiatives products, as talked we reimbursement to to over shift that product period and of don’t time mix and is up they The and that as They happen as I selective mix be while, gross ramp pricing take particularly margin higher assays will reimbursement better well are over see time other we our things the factor we increases, gross NGS true margin

factors of will drivers All time. those over be

Mark Mallon

Matt. Thanks

Operator

from coming next is for your Please question. announce question Mason Carrico. today Your pose your then affiliation,

Mason Carrico

maybe services you there value higher on provide would trend opportunities commentary just XXXX the to pharma capacity, or last to in any filling Carrico are gross Mason your for and on the some there? there Maybe shift the guys, similar Hey color expansion projects, what from drivers be is Stephens. a question, margins how Is expectations great. up it could

Mark Mallon

I’m and our George priorities can the growth going maybe margin, maybe gross talk year. to in Gina about then ask talk for the to about

George Cardoza

operations on international in certainly the to in United one Singapore laboratories goals mentioned, States, going Mark we open with of and as China built, our and labs of the is fill we’re commercial up. teams operations we now, and thrilled that is certainly those focuses Yes, with believe at is really that have those one China, main capacity the our footprint be the of Switzerland, international side, but to

got and which significant have to up sites up, opportunities revenue pharma we’ve Obviously and in gross of services cost a So XX%-plus fills the part so move when continue capacity. infrastructure this. those into again, fill sector, we growth certainly, we we expect also the those margin that’s big

to are largely so range we want a some even business We pharma Gina, broad believe up. price commercial then looking at that year some talk our is grow are expectations are clients, do fill the said, the certainly our this impacts a cost infrastructure certainly Bill of to and you earlier and to things actions, as initiatives? implemented that happening but of that there’s we continue about is we’ll built the rapidly going and increase

Gina Waller

Mason. question, the for you Thank absolutely. Yes,

a really we set very made really us up going backlog adds, that for has this COVID terrific sales currently growth in created up strong with are portfolio had both includes with presented. a the we to and obstacles ex-U.S. those We team diverse of that’s taken backlog feel types, project confident sales have that and a investments we’ve off international We the clients really strong that and have. that team XXXX despite fill that the

Mason Carrico

it, Got you guys. thank

Mark Mallon

Mason. Thanks

Operator

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

Mike Matson

later more a so for patients probably I stages, if require Do wondering any but if understand they that? a I’m backlog Is order I patients or care I feel there’s of a your concept feel business, a have testing more patients. whether second tests maybe any whatnot, Yes, that the tests, whole & guess expensive for cancer negative effect some heard of out thanks, that or to from that? there deferring per later guess, Mike kind about Matson have for Needham there’s maybe of you these Company. of have progressed stage lot and and any We’ve patient, you positive of the opposite

Mark Mallon

for thanks your Mike, question.

already complications, some getting theoretically, unfortunately are could requests. and that to you further think progressed and and lead going later I testing have diagnosed imagine to complexities could be incremental people that more be--will may or

volume, levels that sure, recede, in say get testing into offices, for say in think we’ll do see our rebound when can with is significant do I that. the cancer patients we the what see at we the think to that testing, I COVID back really business rebound and that is, expect we to early and it’s think but steady I continue least too

I we have strong into that that That it to get accounts can part course, think rebound. interactions in so in I to see say think the largest add overall very though opportunities market, in even getting still of going expect--you and expect but the delay to know, to big the It’s really strong a of lots what’s new fragmented player. we’re happen show diagnosis, is, we terms gets we in volumes a hard additional direct our has back to adds our accounts, really teams with existing thing of sales historically other customers. adding that in and importantly a but helps and been growth, accounts, new helps which effect visits, in of it

Mike Matson

it. got you. Okay, Thank

Operator

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

Tejas Savant

Hey the time guys, for here. thanks

you plan Just quarter, guess backlog there? I Informatics have drove what traction you’d to looks first flat biopharma. this flagged some you quarter driven side a in on the On product clean-up a launch this by talk which the last to but Could few be sequentially. think I early Trapelo clinical that on on projects, delays I like and of your large said and elevated whether on follow-up year then I cancels you quick think here, Then to past you the end. happened spoke over biopharma, Informatics, a by a just

driving for with because of RFPs Just some versus juxtapose term January cancels of smaller Thank I’m breather on significantly what’s you in guys near to color and so I’m some from of are being to in what with some CROs a there down on juxtapose sort that elevated it commentary. you. comments and especially that, customers. biopharma of perhaps funding, talking just trying seeing trying the

Mark Mallon

demand an comment upfront to and update progressing, to can improvements to still But what can the we’re despite see the give the the on services of support Trapelo’s place, you of impressive to increase that ask I’ll comes a going that’s ask that support take update some putting cancellations, in decision start about underlying services want Clynt we for the cancellations. Gina our and cancellations. those then word make the to in on decision give is on first the how XXX did how services? Gina say say I’ll through, backlog but I’m do XXX, just and and again an so from a Trapelo’s project strength an that Clynt, was so question Right,

Clynt Taylor

to. happy Sure,

We created are to happened it when or configuration much was they makes we of about think already process quick the that easier of because weeks. and within that and a becomes--it of learned much it we immediately a that daunting, Trapelo an that’s for quicker groups at implement, Trapelo in look launching, of of integration, start. had and so soft say Trapelo a couple I a we launch What kind is year in called past so the configuration

positive. response very it’s the about asked been You it, to

fact, have In contract year. we this our already first

really the not group this but in new a doing decision We something, have a the several reason the out lot takes that’s the pipeline. a someone in and That’s received. something makes only It’s another this. works in do of more well like of been certainly friction one to

Mark Mallon

the comment cancellations? Clynt. to Gina, on thanks do Okay, you want

Gina Waller

backlog longer no when for client data We at you some Thank the and of going our a of portion questions. some to program is that because absolutely. they’ve our supported that’s gotten. always the be to experience Yes, cancellation, expect

heard larger some had pharma, this that experienced that. haven’t in were demand also value, definitely dollar We’ve we but we quarter, but expect of some This in changes from cancellations ourselves. we

types a of and clients on and our I to this think sales, have that’s projects. refocused who different testament seen

we trials, we phase As backlog the phase the reflects our and earlier before, even way that all feel changes. pivotal clinical have our I very of have portfolio to it support consisting offerings about research we product though diverse research of mentioned phases hearing all been for diverse so X projects, to of a have that clients, in clinical these optimistic we of

Tejas Savant

Thank helpful. you. it, Got

Mark Mallon

Thanks.

Operator

like back any further no comments. I queue. to now for would Mark are the in turn closing to questions over floor There

Mark Mallon

we that thanks do. I and all investors say to say always support Holly. all soon. through the do, I’d call. your the NeoGenomics, you, to the those much. importantly continuing an but of you considering in say Okay, in quarter. Thanks for listening we want to our close, course interest you to you to everybody all talking on or of NeoGenomics that all investment of to behalf we Thanks leadership to to they to team our this forward employees work great as with participating to of in also thank forward so and thank are like Look company, just dialog also our thank you of of you look for and

Operator

Thank call. does you. and Ladies gentlemen, conclude this today’s conference

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

NeoGenomics (NEO) 23 Feb 222021 Q4 Earnings call transcript