NEO - Earnings call transcript Q2 2024

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Operator

Welcome to the NeoGenomics Second Quarter 2024 Financial Results Conference Call and Webcast. [Operator Instructions] Please note, this call is being recorded, and an audio replay will be available on the company's website.

Kendra Sweeney, Vice President of Investor Relations, you may begin your conference.

Kendra Sweeney

Thank you, John. Good afternoon, everyone, and welcome to the NeoGenomics Second Quarter 2024 Financial Results Call. discuss Jeff are Sherman, to Executive Smith, today and Officer; Chief me the Chris results Chief With Financial Officer.

the Chief Harris, Karim Sad, of including Nate Montgomery, President members management of Medical; available Dr. are Additional and of for of Warren Informatics; Stone, Operations Strategy Commercial Chief Melody Head Head Officer; Officer and team Q&A, and Transformation.

simultaneously webcast. being is call This

posted a to referring will to slide website presentation at has our be ir.neogenomics.com. Investors the been tab on We that

X. Slide on Starting

make statements judgment events statements SEC to of filed we regarding original during XX-K, will of factors risks future we identify Please We caution such actual that forward-looking obligation to anticipated other or with these differ may known statements. revise call, that performance. undertake we differ that call Forms materially. from statements. XX-Q this to reflect refer the important speak statements results this During and actual update no any forward-looking factors could us the and The currently cause based to X-K or the date as forward-looking of our results recent our materially you our best call, our on and made to the and only most

in available Any the call financial reconciled directly issued are we comparable and an refer in financial comparable this most unlikely to alternative measures other a The adjustments to to to in afternoon. referenced non-GAAP measures financial financial During GAAP are to non-GAAP financial table we to this considered measures the call, on required results. release not be should by measures non-GAAP financial press non-GAAP certain that GAAP this by provided be involve measures measures presented the companies. GAAP

of will now NeoGenomics. Officer Smith, over Executive turn Chris I to Chief call the

Christopher Smith

in afternoon, on the performance accelerating we'll Good made strong today. an the everyone, and provide update today's of joining us highlights growth. for quarter and discuss On progress Kendra. thanks profitable our revenue Thanks, call, second

Before continued our saving results, want financial serving vision. to for of lives. I to their thank mission commitment are discuss and all teammates and we we our patients our Neo Together,

highlights Let's get on slide. into the next the

execute as revenue XX% the per last margin. We be grew this revenue to our NGS result, deliver gross second In XX% of year. our driver growth, total grew clinical for approximately to on both double-digit representing goal volume QX, to compared To growth. expanded XX% quarter year-over-year test continue achieve to and revenue. continues a key we increasing and and

we even of have fourth and positive in are quarter the EBITDA are also the delivered proud consecutive that adjusted generating We more leverage business.

front, to begins the commercial teams our the On stabilize. hold single group pharma a taking clinical as operational is into and pharma of alignment business

of as Our in support half the track aspects XXXX. into efficiencies LIMS project grow year a milestone on several and is automation this volumes, improved second to of new with we and and reached quarter key lab product launches this

All adjusted and of to guide great increase in our raise year revenue puts the for guide. position our to EBITDA this a us significantly

are directly the on and priorities with gross innovation I'm grow our growth. to going advanced expand double on revenue drive aligned pillars: long-term Today, digits, earnings focus profitably generate These X business, and our value and strategic goal now progress financial our Turning sustainable priorities. diagnostics grow accelerate to our to margins core creation.

growth, to driven continues mix and deliver to volume AUP by our business execute increased Our commercial strength NGS. in improved clinical strategy on

continue market We in our leadership in presence to increase heme.

that we initiatives, commercial this paid reducing success space. the ensure expand Through the work in well half second to in launch having continuing rapid of coverage our us getting to and to position combined do. AML test this, we're we're year, customer our service, a with denials RCM exceptional We will for continues and the in

in the combination in investment capitalize years. our the this market cancer team commercial with opportunity large commercial to outlying The enables on to success, of our accelerate the continued opportunity, us

Our look products January deeper commercial our expand beginning return XXXX, XX expansion launch Community to is we to will year-end. expand into And to further new and segment, of the goal with to investment. show before our continue we on positive our reach resources Oncology our as

Productivity effectiveness strategic high-impact the to over tools increase time will continues years meaning the next targeting of CRM quarter-over-quarter The few on informed digital and as investments. activities, improve we through other enabling our by spend and tools AI guided of sales they force, use selling proprietary to data. incorporate selling, continue

and of products our utilizing for diagnostics to executing with we'll growth, new market care. patient focus new well opportunities innovation us on long-term sustainable the is position and bringing enhance future in technologies The believe We to pillar right the turbocharger current a so innovative resources data, industry innovation growth. the on to continue looks advanced and to the

in incidents X a operate Statistically, X outcomes. that men them give their the market. and testing X population for that in the are will of They will attractive cancer We part rise. prevalence seeking will become a in is oncology on cancer in from We develop X lifetime. best women patient and opportunity positive know growing answers

cancer selection markets patient focused to provide will insights and are developing and on innovative that We diagnostic tests journey. actionable inform therapy

are seamless help offering customer XXX the segments to oncology breadth and differentiator and we patients tests, patients. tests expanding more a for of adding to with for deliver that by physicians is we innovative care over serve, a new for our for committed experience these Our menu, care that key product

launch months. are X We X have next X innovative of tests NGS these late-stage and tests to in the development the over targeting

viewed of quarter will year-end. for a we XX% suite segment, a customer and have annually. from by launch opportunity, our and this biopsy differentiated of AML will to integrated XX, XX% superior has to with pharma expect as liquid test Neo traditionally products us. which segment leader comprises customers the Heme test is come approximately you experience, in been the the rapid growing intend turn A CGP leading commercially this launch market continue Slide approximately to If and

There me will take I acute and Let over minute are this in presence be cases strong about have diagnosed tests that this are important. XX,XXX these talk leukemia of a we market. year, to why myeloid a think

new our and rapid begin NEO critical AML options. trial other an RNA biomarkers means is Our test. panel relevant X- detects clinical be trials prospective by test a hours AMLExpress and insights XX that AMLExpress, any turnaround other is X rapid QX. has anticipate NGS will that an and AML importantly, both their industry-leading clinical are in market, to in This up AML and for own days than for pharma diagnosis, than this NEO patient to AMLExpress within tested setting, selection a to stratify admitted on Express We DNA time, using up X-day most that hours. tests may their to segments including treatment the the enhanced hospital could XX detailed and and launch waiting sooner to patients therapy who with clinical faster In diagnosis Most delivers tests. pharma

its tissue liquid has We profiling provides believe NGS signatures, one assay sensitivity for The market, blood The days, input X biopsy samples. from the unavailable. advanced panels biopsy large a whole including sufficient competitive therapy size, their genomic few state a solid the results In classes highly providers all is be samples even and ctDNA, for well speed tumors. clinical it to profiling sample differentiator comprehensive they potential be panel will on variant detects genomic TMB. be results are The of MSI setting, as to which the from specificity. as which can in because this assay testing treat available Pantracer Pantracer Neo appealing Neo It and panel at a highly and traditional complementing when most for minimal the and will large tissue in as major of the panel pharma of selection sensitive liquid patients. is accelerates

We the the QX for clinical launch access cancer in XXXX. Pan QX are in lung and targeting late early

help as Beyond transformation our business business continue tests the operating patient real-world as in well data valuable that margins the and optimize these informatics in to business. of clinical care more providing new setting, pharma robust to well as deliver insights our will as improve fuel

we you informatics of today. give update quick on let are me where Speaking business, a

think If of of oncology number patients you million take on we've few last a we annually, years the valuable back over about the over across sitting run X.X are tests asset you step continuum for diagnostic and see cancer the data. a

and and our combination R&D with Even are modalities results support to data. regulatory raw using more discovery, solid for our depth digitized biomarker drive the testing samples creating data tumor that in Pharma images filings commercialization. advance to diagnostic a so, enhance expand pipeline, in ultimately, we uses most their with multiple

which data our from testing our of and So volume likewise our increases increase as the of business, our customer. assets, expand depth breadth the for capacity of we our informatics clinical we monetization data

to operating drive productivity. and efficiencies, our invest in footprint further To continue we lab optimize

Our of Automation expansion to time Lab increased for been leading La our and turnaround well Raleigh other margin were Meanwhile, and the sites specimens have and are expansion. Jolla validated lab testing been decommissioned, routed in historically has improvements there. is underway. that productivity in

is further new portal integrations increase digital technical focus well architecture. EMRs. our on enhanced improve underway transformation which enables and customers' and us LIMS will the stickiness implementation our of to through customer include Our This a digital enterprise-wide our system, with

that way of us transformation LIMS and to positions regulations new future developed comply implemented a well in lab are our Finally, tests. with digital being

recurrence head perspective, will, currently From approval approval X, indication. again, for neck technology. negative to this MolDX once On with have and monitoring MRD for MolDX ensuring cancer. a test access patients remain to resectable RaDaR only and HPV June is legal RaDaR the we committed granted our

On the this the but court neck lay our cancer. we preliminary out the evaluating injunction Court back to the options. to District head did modify out injunction Neo and July With for against the appeals RaDaR, upheld possibility to to go are carve news, XX,

our of to court continue the district defend We benefit all technology the in patients. will cancer for vigorously

opportunities partnership benefit Beyond or arrangements optionality to from to enhance innovation develop bring litigation as to MRD for testing. to bolster MRD strategic pathway, well new who as in-licensing evaluate drive and efforts assays our can patients and continue we

we've and from their in cancer committed As diagnosis to monitoring. the the are past, stated being to journey market we patients supporting in MRD through

over me on go it so results. he a financial through let hand more Jeff little detail Now our can to

Jeffrey Sherman

more quarter. little the our with detail Chris. start a operating Thanks, for results on I'll

$XX We delivered million. clinical prior of another year revenue improvements performance $XXX XX% double-digit in $XX test basis XXX million. led growth, The by improved per points volume and to profit higher XX% positive XXX% strong growth. the RCM by EBITDA the a shift revenue prior tests to gross quarter revenue million XX.X%. in margins to up growth, to of and drive was test Adjusted improved due gross continue over increasing value year to overall Adjusted to initiatives from yet adjusted to combination QX, ongoing

consecutive As Chris our positive of fourth was said, EBITDA. order QX adjusted

million XX% setting pricing revenue increase was per to X% of driven Services Sales mix volume NGS increasing year, community X% for a $XXX is increase NGS volume. and a and adoption strong over prior The continues penetration by oncology Clinical fuel test in the insights earnings. increase of of demand and provides driving growth. due and it in growth an force revenue into and the higher testing to revenue testing

the we Neo rapid myeloid of saw in end solid disorders introduction comprehensive NGS tests our QX including the business XXXX, year. and a reminder, panel at of large growth the tumor QX of in As last in

back our in these half growth the effect strong NGS result business comps expect to of in as the tougher this will annualization in of year, progresses. year continue tests we the While

XXth the Last Under developing the further segment opportunity the to for the remain the business. Warren's commercial and of leadership, including a delivered we to our better this assets. reins biggest blueprint data consecutive organization, a prior initiatives, year over monetization is NGS announced We plan for revenue restructuring stabilizing forecasted. improvement Melody improved the quarter as business the With up business comprehensive delivered these clinical commercial of our a than is of contributors the test, the taking expand success we informatics, to in per Pharma improvements. $XXX. quarter testing pricing, of leveraging and RCM X% quarter,

With increase international driven pharma over other X% closures, and revenue declined the combined decline or by by prior and diagnostics, X.X% macro did was over $X.X The conditions. year informatics million year-over-year to million, QX. but restructuring site market into sequentially primarily activities pharma advanced $XX.X

XXX by plan prior to our resuming track margins to basis ADX margins business However, believe we continues is on improve optimize the now gross the year, over points right year-over-year adjusted and growth. towards

XXX and year year. prior second the margins. of quarter XX% an was the XX.X%, revenue profit at leverage, points statement. operating result over of Looking growth gross of gross and over income increased improvement gross profit as generating Adjusted a basis adjusted by margin Adjusted higher last

million Regarding operating generate as expense was marketing versus XXX% EBITDA G&A expenses, adjusted million $XX additional And million, expense was $XX improved million $XX sales $X in a the R&D expense business. million. and was leverage and prior to we as highlight, $XX work to year or

ended cash driven marketable from million. a first from million, to the in payment and We breach from flow securities second we Turning $XX XXX%, Cash data balance quarter sheet. Change Healthcare operations million or $XX the as primarily delays, of quarter. of $XXX positive improvement an with the was recovered the

as the liabilities principal convertible on notes, XXXX current of May with now Our balance are sheet. balance presented our million, $XXX

retire our notes to plan to Given our position the existing marketable cash cash XXXX strong we and May. profile, securities in liquidity and use

our on guidance. move revised let's to Now

this in performance of XX% new raise are sales revenue was to year, guide $XXX force year million. the our for for EBITDA later revenue a product significantly the we with increase our adjusted launches the momentum, strong of year half growth expectations along million Given our position with Previously, expansion first guide our guide. and and continued in the our revenue $XXX to and

now to million, are in We range million XX% representing expecting of XX% to revenue growth. $XXX the $XXX

the half growth new efforts. stages be our new closing the revenue of final and in The the business the of force expansion success product weighted sales introductions, pacing more heavily optimization of fourth second with quarter, will in securing continued and

adjusted was guide The to $XX million $XX million. EBITDA previous

range from guidance growth at We now improvement million, completely our $XX representing that midpoint. million versus of to the resetting X,XXX% the range guidance are last year revised over $XX a with of original XX% and

And up. hand with back that, Chris to I'll it wrap to

Christopher Smith

delivers quarter, the next to teammates results. community with proud on It's hard XX We of sustain months these working further over to pathologists exciting so Thanks, been hospitals our our that better a and Jeff. us and great oncologists. launching I'm strong in position X plan strengthen for performance products with position

raising we In we're therefore, these With business all continue we of confident in and the the are leverage guidance. XXXX addition, to on execute things, remainder gain as priorities. operating

it We'll up end operator. and prepared our remarks open the it there for questions to over and back turn

Operator

first [Operator our with from William Instructions] And comes question Blair. Andrew Brackmann

Andrew Brackmann

guess today? things. on the sort QX. in just mix how heme start, quarter of rest Obviously, halo and I bit the growth tumor, guess move that levers nice on is growth as a side we you of could solid color tumor we not we just about about there the to forward? effect sort across solid of there, the NGS if but another related the strength here of creating in there heme between as you business Maybe And But that are testing that, thinking of think entire the menu I any share can of of

Christopher Smith

question, the to, I'll I heme our of gain I presence ask better a without in Jeff, think to is a well Yes. solid view as break But enabled but leadership. market as -- do And want start? because has Do think, Well, it definitely talk we that I Warren? as more think by portfolio. you Warren about don't we heme out or you it any here to want us solid.

Warren Stone

So question. Andrew, great

heme, an as drive and solid amount larger the say obviously, Certainly, much time, it. basis would associated NGS. the growth I as entry that base a of has and a tumor following use a a an we into had using a perspective, presence we've product from that, to that with NGS certainly, strategy community into that So significant revenue

obviously, heme But very rate do solid at is we growing that's positive see rate. say a at as a we term working than us. absolute And percentage faster heme. tumor in a effectively growth, for I'd growing still

Jeffrey Sherman

QX, a throughout I tumor And good And of Yes. introduced noted panel the the we myeloid uptick well. we think as we've the in end at solid saw panel, in uplift seen QX. then good XXXX I

those to helping drive think are more products I NGS So growth. new

Operator

Brennan comes question Dan with next TD The from Cowen.

Daniel Brennan

margins on and the one Maybe the guide.

complete the you guys I outlook barely had well, of of as like kind we versus, obviously, here, I somewhat a you EBITDA So margin Jeff, mid-single-digit just think, reset discussed, think so profitable.

now acceleration? what's speak what had line maybe lot that? this of big just beyond Can discussed you it, a like kind And of Just traction, top growth? durability of think sales better that force to we driving possible the how we of pace you payments, the kind XXXX out improvement that's you've about look as

Jeffrey Sherman

Yes.

I And to helping think gross EBITDA adjusted improvement. Certainly, test margin multifaceted. growth all per revenue and to volume business. talk in have multiple been mix drive we are improvement about the the always it's and the drive we drivers

would say I work footprint, we're of the in lot done done with we've our productivity lot as also terms how of on well, staffing work a of a And just optimization we've operating. lab how we're business.

pharma As and have working lab the Melody, have and clinical we're optimized we there. operations think fallen both the how under I

that further we us say us as rationalizing of the we've believe, retire lot well, the think redundant a as as And again, think well. done systems is will LIMS I then to on LIMS, well. going to I side, do systems. work IT The help allow I'd some And IT

And of so there's lot think a activity. I

say logistics as on over we rigorous more really, disciplined the and been I side, the side would think, would on and well. procurement that last I the Finally, year, procurement include

and teams So of technology I infrastructure of people using company looking better. think at get are cost have kind we the to across

therefore, leverage, still think next get getting better years and as margin EBITDA the of continuing to see margin and think and the to opportunity gross we to line. we the improve on improvement continue operating adjusted over couple so about durability, multiyear And that's a

Christopher Smith

that's big our thing driver to as well. obviously NGS, we a continue for And shift is I mix more that the towards other think

Daniel Brennan

it. maybe then Got just follow-up, on as And NGS. a

size Pantracer, on you on Just got market today. like what opportunity? how the good sure are bit the speak what and a handle your little can are using you've a pretty currently that customers to you I'm dynamics

think turnaround can is So time could what other a impact profile? And about you have? about do product differentiator. Pantracer of you you talked the give kind key Any color

Christopher Smith

let one. take that I'll Dan, Yes. Warren

Warren Stone

Yes.

certainly as and believe competitive. we a So it's genes. And very articulated, Dan, got CMBs, panel Chris that mean, a will TMB SMBs, [indiscernible] It's coupled I product sized over turnaround market XXX be And compete the in with very days competitors it be very, will out are that to well detection competitive. less we placed there. very X than feel limited with time, certainly,

be big today, will a is just IVF, a It the upgrade the we have over panel lung which panel.

we testing us we So play especially that next in IDFL to terms and will of slated feel also from more of solution. solution becoming believe year. and a launch offer our knowledge allow and concurrent into from a we concurrency an to the sort more will That which popular tumor, as for leverage us really expertise as expanded pan-cancer to what's perspective pan-tumor we testing of pancreatic can sort that is well. It allow

recognize feel to market, the in a in but sales our community growth we product. with we footprint, the this but it's the growing we also players through can the feel still make that that hospital significant are as We force setting, other there expanded setting, within both

Operator

The with Tejas next comes Morgan question from Stanley. Savant

Madison Pasterchick

like additional a top on has This $X the been line quarter. out, raised million. maybe plus, on looks is couple want an like Tejas. start It guide the B for just congrats to Madison the for I

seeing parse I expected set half second you drivers kind you're guide? are initially just the out main than when So had better the of what there if you was wondering in the could you playing out

Jeffrey Sherman

to said think be I -- The is as it's volume It continued continues earlier. performance. strong, Chris Yes. mix

then continuing seeing. leverage NGS getting the manage that we're well. costs we're on we're good growth So to I think And

don't again, one think I it's factor. So any

are sustained half I the back year. that think the confidence it's a combination giving that the performance of will of be factors us the improved in

Madison Pasterchick

Awesome.

adoption mentioned setting? was one I think, and mix, setting the XX%. being much I more I by NGS community wondering is Okay. you of If that in. about, driven the how quarter squeeze in know was just growth hospital just versus could I

Christopher Smith

-- We is as obviously, going as segments, look, both coming but it's from out I Yes. market. don't break think which segment far into we which

Operator

Needham question next from Matson with comes Mike Company. & The

Joseph Conway

for on Joseph is Mike. This

gives to you for time, AML wondering, time On wondering have turnaround be this rapid of guys of other kind specifically just just a AMLExpress, Is in And the time? of that for that tests? X-day turnaround of is tests? turnaround other what's that. that? I'm about Or can we that kind kind the if can any you drivers turnaround that -- talked see improvement that transferred

Christopher Smith

Nate in going Montgomery. I'm Dr. bring Yes. to

guys, he about don't bit but think met I that little You medical, talk runs let it, him have and test. a

Unknown Executive

we're about in testing. think So many specific expect sort genes Today footprint in to talking where Longer term, be other tumor apply will the we this smaller means types. a technologies speed are, term, we're a I AML. to near we of here assay of little the to of usually bit terms how that the of

but So hematologic panel solid for we in growing opportunities rapid the immediately if tumor, applicable see this indications. malignant many would format isn't something do to be that all

Operator

The with comes Piper David Westenberg next from question Sandler.

David Westenberg

just I wanted Jeff. Actually to Great.

just guidance? maybe that? in think You talked then that the on you launching. was terms win. that -- And you're you X in previously customer a some new I also or -- did Or products timing always get that about Was mentioned

these customer But color year that be won't give get you worry, too next And Can well? with what like? win next I crazy would some mean don't look drivers on shouldn't us as year. we new modeling

Jeffrey Sherman

show that. I'll Yes,

we I So about large look, QX. and that -- the And say I I had we've between know we just -- about but guided, think that a questions in lot of and talked so I QX probably about And would openly the think we we've talked -- tumor. more products. don't solid

clarity, of since to We some especially products. the development we're give in better cycle just further thought it more those was

when X for would big QX. that X at more we've the we is weighted accounts it was level stuff end were far I I QX you so win in the of And think start can but the products those and major that of XX take little is through kind have wins, and bit kind QX. a think we think Jeff So in second as process and bit into kind products this if here. as X over account looking of of QX, next then Jeff that I X is go at will X kind business, be today. Look, think the QX, given it not think we in I about line had of to of think you gave on -- accounts, months, does coming time referring customer say is not all second to, we of But us, those happening QX, as to onboarded. referring was lot and I chime than of you know half that -- And that to little a a out what detail in towards the QX, what QX, really half Jeff was QX a our

Christopher Smith

would And so add. Yes. -- would I I

So of we towards were guide, the year always initial some they in original happening did launches and product the anyway. the have end

impact, in well. as QX some wins drive revenue new business will So

we have pretty the QX growth of that be then we higher in QX, And on. QX good earnings than but line things look quarter half to the year, more in come so back the bit we sight in as of at a higher would expect little fourth of and

David Westenberg

high, you know of it. kind standpoint, a percent did cite XX%. peak that not XX% do And terms you from we long-term again, revenue? Got revenue. but think NGS guidance know volume is of of I a of have I that could in Where at And

business, teams to sense these but clinical with that going forever get keep a trying in growth can't You for just peak. that

Jeffrey Sherman

revenues, Yes. of things, clinical of from revenue of NGS. But of a if Well, is as couple their think, business, the and is I lot coming still clinical a about it. of side growing of business that the look, well outside It's look base look, XX% our at the of competitors, to NGS. XX% you XX% think

there's So think ton we a runway. of

you I'm XX% not that going can going revenue. this clinical than significantly to saying at Now be But that the we're level. of more see

runway. that, think to best So of as community into oncology. we again, lot a Yes, there we be go continues

Christopher Smith

think We're from from a of focus the a results from a I we're And sales revenue margin perspective well. and through higher focusing a And It's margin higher ours. it clearly and of as that earnings revenue, a on it's focus drive perspective. profile. perspective, seeing

Jeffrey Sherman

why sales I And we're efficiency. the force, the we same talked that what have opportunity of -- lot field We're compare and in prior -- relatively optimization that's But we're of that's expanding just to size Yes. at think probably the a sooner quarters. and about force time, to than had a why to we continue investment. to our sales invest, the We is. need going we're accelerate getting

Operator

The next question comes from Matt Sykes with Goldman Sachs.

Matthew Sykes

quick both upfront. them ones. Congrats quarter. I'll X just Maybe in ask the

of is of have know know guys back revenue like the would mix areas, on love those is up. management. where had the above, revenue you I to runway all test hear test, pretty higher-value guys? record per cited most you've you focus cycle but I being price for impressive test revenue a the per And answer of and also Just on the

test digits. side? Do assuming mid-single kind just, per that I the you at, feel to second up? to that of think, for OpEx the of on for balance year, growing OpEx, And balance year Jeff, you've the Is question continue should be the what revenue then of is the a we one. drive quick been

Christopher Smith

both take Matt. those, Jeff let to going of I'm

Jeffrey Sherman

Yes.

assumption, a that's the on the side, year. Matt, of half back OpEx think the for I reasonable

blank Just the the or half question. first on the first part of

Christopher Smith

several And mix a big percent. part the of over in XX-plus to So we continues revenue we've be drivers, said, I've NGS that. said as tests, test, new XXXX. per the did And introduce

And to annualize so we starting those. on are

and we tests. so new some And QX both had QX,

of I you'll So still that's terms in go think that will up. growth going that but while see slow, per revenue continue we percentage to test expect to grow, to pace going we it's think

I there. opportunities the cycle lot revenue think still there's of On a side,

would I there large continues the to is biomarker And legislation, the approving states Our tests. biomarker number in legislation. terms say, biggest the of panel challenge be getting momentum of state

a it, state payers start to once that it's that However, switch paying. not flip going the is approves are

a do even payers to the or pay of get Medicare have supposed paying. to still We is to states pay work lot when they to are say

think that say opportunity and an a for we to to I would doing. we're it's at So payments continue to we continue drive already as multiyear -- work I opportunity believe higher look

I think of focused we effort it. lot a have on

work the help work with I a I success there's think there, but there. payers it's continued would to to still, seeing us payments, momentum do but those from say, to get the perspective are in trenches legislative we down

Operator

next of Michael The Bank America. from comes Ryskin with question

John Kim

is John Kim for Michael. This

sales all? And how in that So the of lot in that talked guys I balance the you hospital second the are is XX% fruit should to think of you But to And being How there. sales time made guys is the investments, costs you half balance obviously, think and labor that looking is 'XX? guys the setting, expand you -- oncology the starting your further? force, the versus shifted about looking? force separately, on about at are bear of in setting we the a focused incremental community

Jeffrey Sherman

Yes.

expanding we're So talk field the that we did about organization.

are slides in of going we quicker. kind script. you and we're return, it, getting And and the think when about that's in a the So so

the well So built we've one but is there year in it And amount place with the spending as as back half of the time guide. Yes. we're of 'XX, never specifically associated costs into would the said other. in into or the that as definitely as far that really though be

in the sales the community oncologists. have and We separate focuses One on group forces. the group focus other primarily primarily X is pathologists hospital

But we see those are Community opportunity the both big with the And of continuing. Oncology growth segment. so

Mark Massaro

having I been would growth last than our and commercial and are driver. we And it this faster both EBITDA And expansion, year. say with success year this adjusted expected, has has Yes. a been we growth

really the as efforts we invest drive force So and look over continue to optimization expansion sales to in to the several next us that at enabling growth years.

we we better, going XXXX. growth. invest we're year have into be is I we're back thinking to investment into we measured this the it as half more, the said way that's to and earnings about We've of we're with as about thinking and And opportunity it. how So go do the revenue measure and that think and

John Kim

in Got it. just I one if then more. squeeze And could

radar, RNA legal and Are considering the the licensing think sorry, be still the sort any that of -- would pursuing both you internal or R&D. guys full a acquisition? I you you strategy or transfer On mentioned tech

Christopher Smith

you kind answer and Ali want that. the of strategy I'm have and met with not guys Absolutely. do Karim meeting obviously, But about part going the bit? in -- going I'm also of to to kind to to to Yes. But is you first who runs come a introduce R&D. little talk Karim. talk

Unknown Executive

Yes. John.

and as opportunities. looking spectrum mentioned, partnerships are we at of potential So in-licensing the full we

but but partnership. that stone more we're So to development leaving both unturned, on sort of internal also come, in-licensing not on any

Operator

next The Massaro with BTIG. question comes from Mark

Mark Massaro

Karim, welcome to Neo. Good to from hear you again. Yes.

you guess in I guys really NGS. the way continue first to grow question, So in robust a

maybe strongest just you where And over in share couple how taking the fish, of have IHC, indications And NGS. you from? Can to sort you in flow, like see so do imagine subsegments of areas then of those any NGS, growing touch years? next outside specific on traction getting the you're I are

Christopher Smith

Yes.

take and start with the maybe back front. then the So

kind So approximately business show if that -- that at you we shows of slide look that X%. growing diagnostic

X%, still we've really of nice -- grow X% well to said we're those modalities. some growth seeing think nice I market in there, but historically above publicly they

share. of of of ability for provide their think large where the kind and and these I an difference your and leads between moving reference it the of some next And the patients and solution hospitals end-to-end we in testing. and And labs us cancer really one be part think doing kind it to come is potentially to I would is

-- get and our the though. do we than And days it's said think depends team of early is some how don't and a things. country, every territory, I us one modalities probably quicker So I really company think, has we of entree who's we've every because out other into gone on the from right? stronger really, without territory we geography It these perspective. share But a helped question, market any specifically

Mark Massaro

see when less walk And liquid? on Okay. turnaround time. And a on to you can know give Pantracer -- you touched maybe us us than sense can follow-up, data we then expect my through just for X-day I for

as I think that well. the around market leader is time

when and some then expectations a around you're going us just So your and and obtain might in see we sense through how about can coverage for walk clinic? you give Medicare data us Medicare planning to the

Christopher Smith

Yes.

head-to-head I I And So to trials some traditional we're consider pan I show of more couple this with say be call, come then and able out would running move going things start to would look, on and clinical data. there. a lung mentioned doing cancer. the I with that to we're think what obviously, different we're into

go But this from clinical data underway. is QX. we've you'll I and got start already Obviously, is think process MolDx in through that a trial, to what seeing early

And point just again, that release I into from how I release. wait at whether think, maybe we're we seeing is QX, late early becomes I traction say of kind QX, MolDX so the would or question product some think the we clinical in

to launch We'll of do probably of then bigger say as soft going market far key that a be on the QX. early is I a data will latter and depending data. that and it MolDX of market customers to kind get timing part make clinical decision But as with

Operator

Capital Next, Group. we Matt Craig-Hallum have Hewitt with

Matthew Hewitt

this Maybe You've I'm was all last of there if reconciled point? has you been curious that quarter, changed just caught at situation. the first there. mentioned disruptions up, some up because health care gotten had that

Christopher Smith

Yes.

probably probably on we terms collection QX. as point, $X flowed impact estimated now up we say, We've about collected another But shortfalls. that into caught of of QX out of it coming was are $X through million of So million, $X.X million I a this would most that probably -- shortfall. QX, in that

Matthew Hewitt

test How alumina be And differentiation Is -- panel? the the there you launch. there it. Just any that regarding the to Got time? would plan differentiator be turnaround it then Pantracer key the helpful. will versus what

Christopher Smith

Yes.

we internally. that developing differentiator the the we're be bioinformatics, big key are So it's which using would but look, platform, really Illumina

And so market. I at we're think the competitors kind make to turnaround that the on time, better that the think or X-day about than that more other against targeting other sure where competitors, we're of and that's

Operator

with next The Mike Matson Needham. comes question from

Michael Matson

maybe I clinical you a has guess. increase side. for on lot the follow-up did say of in commercial the is think resume team ADX kind I Warren, kind to the on more track of Warren, right the one been guess I that Just of focused growth. year-over-year

already I in I you increasing plans the quarter? XX, could it but that. last What headcount guess So side on any sales ADX if I apologies but add for you and had was heard stated and on we the are -- reps think wrong there? the pharma side this, did around be

Warren Stone

Yes.

looked term, to got think where your I So point And But estimations in form that to business now. we've business. of think there intention any to certainly, stabilized short incremental quite hedge we've much our a And are the more accurate. no refocused. I add closely, forward the resources. We -- moving approach the with as more can, our a is be significantly more at gain may I business more the leverage prior approach we I've fragmented, focused and was strategy think therefore,

business, further to not gain further we on as look traction making year, we'll term, to the make in short investments. this that for start again, planning any investment. and have, i.e. in of We rest the But then

Mark Massaro

infrastructure pharma on now on capitalize, was utilized the in as But that we team being enablement prepared commercial remarks, clinical also is our as for built well. said can we team the the

Operator

with The Leerink question next comes from Partners. Puneet Souda

Puneet Souda

here. the questions Chris, for thanks

the be headcount more will fully provide So that? for of where us And it to headcount take And increase. needs these one you is to reps long on the then how into some eventually? you little be Can productive? do bit first think a

Christopher Smith

Yes.

when is in business, mean, think of But OpEx. a because spending so much we I first were what this one I that about it at So amount on. look, things you the thing mind I the head the say, think we count, of looked -- -- think know -- money the I would I pops we it's wasn't came lot it spending of and were when to

think of we of to the business. which we're were we in what is was then resources and you're being organization, release under-indexed. efficiencies I those some believe able commercial getting into And seeing the -- areas other

-- really think driving And I back at it, and so I half. at that think that's looking you in we're look it's when it, the

Unknown Executive

to anything? want Do share you

Warren Stone

think of couple somewhat the a I never last [indiscernible]. mean, a I guy, in as align I factors. number We're certainly. commercial won't

point place have months, feel infrastructure now done in last from we've view. a over learning perspective well we and I the development got numerous However, as tool of XX the expansions field as office back

bit market become -- to is us. attractive is I narrowing. little think is to hiring think the this Again, speed the more post So productivity this I labor going is attractive. also a And for

time also hire is the to So reducing.

when the in probably when and sort we're from So started this make estimate. X-month what reduce I amount time now the confident we the I'd is we that that somebody can of time think XX And significantly is we feel we actually probably decision to within end of productive to months from ago. range

Puneet Souda

AI, appears perception and to then understand deeper more or there's drive competition And wanted at with informatics just where least a bit that more the more are using it that on bit you're -- to So how competition into integrating and a just we the oncology approaches? using can elaborate accounts. other on but when assays? of informatics helpful. products are you informatics That's about on It or talked that approach that the where you it. Got are with overall I there new EMRs your front integrates and you NGS emerging

Christopher Smith

Yes.

and bit talked what's I create Do new hospitals EMR. talking with the during when which think that I is happening to that? how about pathway I accelerated system, were we a want to or enable think LIMS about to you that better even talk about enhance the we've little going us

Warren Stone

Yes.

the I by think a directionally. general. integrations I focus certainly few I to EMR and about can is we system your us through informatics let in So think there's talk But think a for and customers answer about question, things Melody talk strategic with also area

interrogate can So data, we can reports transfer them place allow data orders them cetera. and to they and that et to

helping data also the of sort care So physician frictionless by that's they're in report I that an improve strategy experience be the or whether there patient integral really setting. to as getting the part a the where and hospital to in talking And of possible. sort quickly think or the practicing information, of it benefit is the as setting community

that to -- and investing we've frankly, the is of it's demand They're one inherently a strategies our because become accelerate from key customers. that got it's

want have more of from the raw also where can within can we is day-to-day a there. about if you their and and provides talk as Neo-access of type for anything trends interrogate desire look area so becoming look solution ask provides actually data an populations. certainly patient second trends The generally a see to a [indiscernible], that et to in populations, data cetera. oncologists access neosuite they perspective? their informatics it's to for patient sort just the that within there's

Melody Harris

On the pharma informatics revenue-producing into side, that's of the our industry. licensing data

the on we're little see Warren side. in there than a productizing growth clinical was back But good on so just transformation bit growing that different and to referring half. to the that some better the piece And expect digital

Jeffrey Sherman

panel is an large to time. more the But business data ultimately us mix give going more our capitalize of over into testing from informatics side on to NGS

Operator

with Up Tom Nephron. [Operator DeBourcy next is Instructions]

Unknown Analyst

liability RADAR guess, head the the you think potential I of, at can't I the upheld, back of concern I really, acquisition? an but I But how realized and realized guess, size negative carved follow-up. your context a that preliminary do had you what articulate, MRD about I really cancer making HPV of might out. in just is ours guess additional be I being junction guess, I the strategy

your Nevada Obviously, acquired before this but time, $XXX was is million.

still additional in of radar be doing an guess, acquisition potential may maybe legal So liability size not with, around node? the I MRD the

Christopher Smith

Yes.

couple a for of things. So

more discuss don't kind of provide But our to? GC and you a information. here who's Ali want publicly But some can is we maybe lawsuits. as company, do ongoing So any

Alicia Olivo

going question, mean address. around to I that, I Yes. your if sure I'm not it's I not something or like which impairment we're understand goodwill

Unknown Analyst

you potential additional how still the an to that do making is be tariff? really justify around size the of when question you may don't owed know liability acquisition My RaDaR

Alicia Olivo

at strategic move now. -- would transfer, we're what not looking first have all, tech like discussed of we licensing additional We well, and have we partnerships right said acquisition. We is

far early year then And X in X products stage, we're regarding feasibility through development the MRD our planning R&D, validate along multiple behind and next have we not it. that

to from we we with MRD that acquired resources Nevada. So the continue develop products

Christopher Smith

the basically of Yes. multiple prepared our pathways, comments, we that's multiple we have. we pathways said one In and had

that's about litigation, position. think which about very the avenues. we way One I it, right? strong really in X the middle we're our to is and feel think There's of,

continue go down path. that to We

Second

a is the distribution avenue. from MRD, lot next from a technologies country we perspective, we've always of innovative been of need the third for beat and cancer, doing that sensitivity systems a are R&D generation. probably around that in licensing we knowing have they best would perspective, RaDaR is And a for looking we one there's

look, but going So we're that not point. this down X at paths, more we're than really much disclosing

Jeffrey Sherman

you. Thank

of near the time. we're think end I

great for time everybody a It to with and up quarter, happy was it. care. appreciate Take look up. turn catching to with out, we'll So thanks today really how call, soon. operator, Everybody the catch the forward things on I taking

Operator

Thank today's and lines participation. may your this disconnect at for you. you This time. your you concludes Thank conference,

NeoGenomics (NEO) 29 Jul 242024 Q2 Earnings call transcript