This article has been updated to include comments from NeoGenomics' earnings call.
NEW YORK (GenomeWeb) – NeoGenomics today reported year over year growth of 159 percent in its second quarter revenues driven by an increase in clinical genetic testing volume.Â
For the three-month period ended June 30, the company posted revenues of $63.1 million compared with $24.4 million a year earlier.
The firm's Q2 clinical testing revenue more than doubled to $56.3 million from $24.1 million, while its biopharma & research revenue ballooned to $6.8 million from $315,000 in the year-ago period.
"In Q2, we were able to execute from a wide range of product lines," said Douglas VanOort, NeoGenomics' chairman and CEO, in a conference call to review Q2 financial results. "The biggest were contracts related to immunotherapeutics, which is a growing area for us in our biopharma and clinical businesses. We also had product lines such as multiomics for which we've had some good project and revenue activity."
Base test volume — which excluded the impacts from consolidation of the firm's PathLogic and Clarient acquisitions — climbed 32 percent year over year. Clinical genetic test volume — which excluded tests performed for biopharma customers and tests performed by PathLogic, but included results from the acquisition of Clarient — grew 158 percent.
The company's second quarter net loss attributable to common stockholders increased to $5.2 million, or $.07 per share, from a net loss of $176,000, or $.00 per share, in the same period last year. NeoGenomics attributed $5.6 million of the loss to non-cash "deemed preferred dividends" and non-cash amortization of the "beneficial conversion feature" related to preferred stock held by GE.
NeoGenomics' adjusted net income for the quarter was $3.7 million, or $.04 per share.
SG&A expenses in the second quarter were $25.1 million up from $10 million a year ago, while R&D costs jumped almost 62 percent to $1.3 million from $803,000.
NeoGenomics finished the second quarter with cash and cash equivalents totaling almost $21.8 million. Â
VanOort noted that the company now has a greater level of confidence around its integration of Clarient, a business acquired in 2015 from GE Healthcare's Life Sciences business.
The two companies are somewhat alike — NeoGenomics and Clarient are in vitro diagnostics shops, they're both focused on cancer genetics, and they have similar sized sales teams.
"Our integration activities are moving forward exactly as planned, and we are on track to achieve our key integration milestones," VanOort said. "With greater visibility about the integration and the reimbursement environment for 2017, we're excited about our prospects as we look ahead to the future."
On a proforma basis, average revenue per test in the clinical business was up 2 percent from last year, VanOort noted. "This is the first time in many years that we've had a year-over-year increase in average reimbursement, and even if it's minor, the fact that it's up is a welcome relief," he said.
VanOort explained that the proforma increase in average reimbursement was primarily related to an increase in FISH reimbursement, as Medicare made corrections to the previous year's FISH rates.
This development "along with the recently released 2017 proposed physician fee schedule by Medicare gives us more confidence that we are now in a period of greater stability in reimbursement," he added. Â Â
During early morning trading on the Nasdaq, shares of NeoGenomics were down 1.5 percent at $7.17.