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BTIG Initiates Coverage of NeoGenomics With Buy Rating

NEW YORK — Investment bank BTIG said on Thursday that it has initiated coverage of NeoGenomics with a Buy rating and a price target of $60 per share.

NeoGenomics offers a range of cancer tests including immunohistochemistry, flow cytometry, FISH, and next-generation sequencing assays, along with a growing suite of liquid biopsy tests such as the InVisionFirst-Lung lung cancer test being commercialized with Inivata. The Fort Myers, Florida-based company also maintains a pharmaceutical services division that includes companion diagnostic development.

In a note to investors, BTIG analyst Mark Massaro highlighted the breadth of NeoGenomics' test portfolio and "fast-growing" pharma services business, which he said is key to the company's ability to win new companion diagnostic deals.

He also cited the Inivata collaboration, which included a $25 million equity investment in the Cambridge, UK-based firm, as helping establish NeoGenomics in the estimated $15 billion to $18 billion liquid biopsy and minimal residual disease (MRD) space. Under the terms of the companies' alliance, NeoGenomics is helping roll out Inivata's RaDaR test for the detection of residual disease and recurrence.

NeoGenomics also has demonstrated a successful track record of "acquiring market-leading companies at discounted multiples and integrating them successfully including Clarient, Genoptix, and the oncology assets of Human Longevity," Massaro wrote. 

BTIG views NeoGenomics as a "'one-stop oncology shop' as it leverages a leadership position in the pathology and oncology channel," he wrote. "We believe [NeoGenomics] will look to accelerate growth opportunities in liquid biopsy (and MRD), pharma services, informatics, and companion diagnostics for years to come."

In early Friday trade on the Nasdaq, shares of NeoGenomics were up a fraction of 1 percent at $50.34.