NEW YORK (GenomeWeb) – NeoGenomics today reported a 25 percent year-over-year jump in its Q4 revenues, buoyed by its recently completed acquisition of Genoptix.
The cancer genetic testing company reported revenues of $76.5 million for the three-month period ended Dec. 31, 2018, up from restated revenues of $61.4 million in the same period last year. The consensus Wall Street estimate was $71.4 million.
During the quarter, the company completed its previously announced acquisition of Genoptix, which contributed $4.6 million to the quarter's revenues. Excluding the acquisition, revenues were $71.8 million.
In a conference call, NeoGenomics Chairman and CEO Douglas VanOort said that the firm and Genoptix have already consolidated their sales teams and have begun to consolidate test menus and identify best practices between the two companies. Genoptix also has an excellent molecular lab, and molecular leaders at Genoptix are now part of the current molecular leadership for the combined company, he noted.
During the quarter, clinical testing revenues grew 23 percent to $65.9 million from $53.5 million in the year-ago quarter, and pharma services revenues were $10.6 million up 33 percent from $8 million in the same quarter last year.
In the clinical division, test volumes increased 13 percent versus the year-earlier quarter, including Genoptix, and 9 percent excluding Genoptix, VanOort said. The company saw unusually low volume growth in November, but saw volume growth bounce back in December, he added, though he did not have an explanation for November's dip.
Excluding the impact of Genoptix, the clinical division increased revenue per test by 6 percent during the quarter, compared to Q4 2017, and reduced cost per test by 3 percent.
In the pharma services, the backlog of signed contracts is at a record level for the company, he said.
"We continue to sign a number of big contracts with oncology practices, hospitals, payors, group purchasing organizations, and leading pharma and biotech companies, and our pipelines remain robust," he said in a statement.
The company is making progress in its efforts to seek US Food and Drug Administration approval for a large, multigene next-generation sequencing panel that was mentioned in past earnings calls, VanOoort said. The company has made some recent additions to the assay and expects to submit it to the FDA late in the third quarter or in the fourth quarter, he said.
Net income for the quarter was $353,000, or breakeven on a per share basis compared to net income of $4.5 million, or a profit of $.02 per share, in the same quarter last year.
Adjusted EPS for the quarter was $.06, beating the analysts' average estimate of $.05.
NeoGenomics spent $526,000 on research and development in the quarter, compared to $556,000 in the same quarter a year ago. Its SG&A expenses were $33.8 million, up 50 percent from $22.5 million in the year-ago quarter.
Revenues for full-year 2018 were $276.7 million, up 15 percent from $240.3 million in 2017. It beat the analysts' average estimate of $271.3 million. Clinical testing was up 14 percent to $241.9 million from $213.1 million, while pharma services grew 28 percent to $34.9 million from $27.2 million.
Net income for the year was $2.6 million, or $.07 per share, compared to a loss of $396,000, or $.14 per share, in 2017. Adjusted EPS for 2018 was $.20 per share and beat the consensus Wall Street estimate of $.18.
NeoGenomics' R&D spending for 2018 came in at $3.0 million, down 17 percent year over year from $3.6 million. Its SG&A costs grew 21 percent to $114.2 million, $94.4 million.
The company ended the year with cash and cash equivalents of $9.8 million.
For 2019, NeoGenomics projected revenues of $379 million to $395 million. Net income available to common stockholders is projected to be in the range of a loss of $3 million to a profit of $3 million.
The company's guidance is slightly lower than the company's historical growth projections due in part to the impact of integrating Genoptix, according to Sharon Virag, NeoGenomics' CFO.
"It is our goal not to lose a single customer during that integration. The top priority for our sales team will be customer retention. Thus, while we are encouraged by the growth opportunities in front of us, it seems prudent to forecast slightly lower than normal volume growth this year," she said.
The revenue projections assume 10 percent volume growth in the legacy NeoGenomics clinical division with low single-digit declines in clinical services revenue per test, she noted.
In morning trading, shares of NeoGenomics were trading at $17.64 up 1 percent from yesterday's close.