NEW YORK – NeoGenomics said Tuesday that its revenues for the second quarter of 2023 were up 18 percent compared to the same period in 2022.
For the three months ended June 30, the Fort Myers, Florida-based firm brought in $146.9 million in total revenues compared to $125.1 million in the year-ago quarter, beating analysts' average estimate of $137.4 million. This included clinical services revenue of $123.2 million, up 17 percent from $105.6 million in Q2 2022, and advanced diagnostics (previously called pharma services) revenue of $23.8 million, up 22 percent year over year from $19.4 million.
The company said that both its test volume and its average revenue per test grew 8 percent year over year, with each test performed now bringing in $417 on average and 295,116 tests performed during the quarter.
NeoGenomics CEO Chris Smith noted during a call with investors that this was the company's ninth consecutive quarterly increase in revenue per test and that the quarterly test volume was also an "internal record."
According to Smith, the firm's growth reflected the company's strategic priorities and improvements in execution. Based on the results, the firm has raised its full-year 2023 revenue guidance to between $565 million and $575 million from a previous range of $555 million to $565 million. The company also revised its net loss guidance to a range of $100 million to $107 million from a previous range of $108 million to $116 million.
Discussing future goals, Smith said NeoGenomics aims to continue to advance its minimal residual disease (MRD) franchise, buoyed by its first Medicare coverage win last month.
Under the local coverage determination, effective retroactively as of March 24, 2023, the firm's RaDaR tests are now covered for certain Medicare patients with HR-positive, HER2-negative breast cancer.
"This decision is a major milestone for us," Smith said. "Following our acquisition of Inivata, we always believed RaDaR's superior sensitivity and specificity would enhance patient care and improve outcomes and are thrilled that the supporting clinical evidence met the MolDx Program's high standards for coverage."
Vishal Sikri, president of NeoGenomics' advanced diagnostics division, said that the population eligible for testing includes the majority of breast cancer survivors who remain disease-free five years after their curative-intent treatment.
These individuals "go in to see their oncologist on a regular basis, because … a large percentage of these women do recur after five years," Sikri said. "The only tool that they have, the primary tool that they have right now is imaging. So any tool we can provide them to help with that effort does help."
Smith added that the company is on track to submit applications for expanded coverage criteria in breast cancer and additional indications by the end of this year. Although he declined to discuss exactly where else in breast cancer care the company aims to gain coverage, he mentioned the adjuvant space as a prominent target.
In June, the firm also received its first pan-cancer commercial payor coverage, by Blue Shield of California, which Smith said highlights a "key differentiator" for the company, in the breadth of data it has amassed for MRD testing across cancer types.
Presentations at the annual meeting of the American Society of Clinical Oncology in June included studies in lung, breast, and head neck cancers. These are just some of the indications where NeoGenomics is building data and might pursue additional payor coverage, according to Smith.
NeoGenomics' R&D spending was $7.5 million in the second quarter, down 13 percent from $8.6 million in the same period of 2022. Its SG&A costs rose about 5 percent year over year to $79.2 million from $75.1 million.
The firm's Q2 net loss was $24.3 million, or $.19 per share, compared to $35.3 million, or $.28 per share, in the same quarter last year. The firm reported an adjusted loss per share of $.05, ahead of analysts' average prediction of an $.11 loss per share.
NeoGenomics ended the quarter with $289.1 million in cash and cash equivalents and $120.3 million in marketable securities.