Company Address:
NeoGenomics, Inc.
12701 Commonwealth
Drive, Suite 9

Fort Myers, FL
33913
USA
 Phone:
(239) 768-0600
 Website:
www.neogenomics.org
 Ticker:
NGNM
 Exchange:
OTC BB
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12701 Commonwealth • Drive, Suite 9 • Fort Myers • FL • 33913 • USA • www.neogenomics.org
Investor Contact: Frank N. Hawkins, Jr. or Julie Marshall · Hawk Associates Inc. · (305) 451-1888 · www.hawkassociates.com
NeoGenomics Q2 Revenue Up 14% to $8.5M. Contracts Signed With Major Insurance Payers. Test Volumes Up 28%.
ALERT: NeoGenomics will present at the Sixth Annual Noble Financial Equity Conference in Hollywood, Florida on Monday June 7. The presentation will be available by clicking
here. The SilverLight viewer is required (a free download from the presentation link).

NeoGenomics is the only publicly-traded pure-play laboratory testing service provider specifically focused on high revenue cancer genetics testing. Advances in technology and genetic research, combined with the complete sequencing of the human genome, have made sophisticated new scientific testing tools to diagnose and treat diseases possible. The company provides state of the art genetic testing at two facilities in Ft. Myers, Fla., and additional ones in Nashville, Tenn. and Irvine, Calif. NeoGenomics is fully certified to industry and government standards for genetics specimen testing nationwide.

NeoGenomics is focused on the genetic and molecular testing segment of the medical laboratory market, which is growing rapidly as a result of significant innovations in the field. Numerous reports estimate that the genetic testing segment is growing in excess of 25% per year as new applications are developed and commercialized.

The company services oncologists, pathologists and hospitals throughout the United States offering superior service and faster turn around times. NeoGenomics has developed a suite of products, such as the Tech-only FISH product, specifically intended to allow pathologists and providers to capture some of the revenue stream that labor-intensive tests provide. This retail-focused strategy has expanded the company's overall margins by reducing the pricing pressures brought on by concentration in the customer base.

Management estimates the total cancer testing market is $10 billion to $12 billion nationwide. NeoGenomics currently addresses approximately 40% - 50% of this market, approximately $4.0 billion to $6.0 billion.

Company Overview

The Market and Competitive Landscape

The field of genetics testing labs is dominated by a few large public companies that have recently consolidated numerous smaller players in the industry. Although there are approximately 300 genetic laboratories in the U.S., 240 are attached to academic institutions and are focused on research and institutional needs. Of the 60 commercial labs, 50 are small privately-run labs and there are only 10 are large, national or regional labs. The three largest of these, Quest Diagnostics, LabCorp and Genzyme, together take up approximately 50% of the cancer genetics testing market.

NeoGenomics competes in the marketplace based on the quality and accuracy of its test results, its faster turn-around times and its ability to provide after-test support to physicians requesting consultation. The company believes that its three to five day turn-around time on oncology-related cytogenetics tests gives it a competitive advantage over other labs that average one to two weeks turn-around times.

Management believes its shortened turn-around times result in physicians requesting more of its testing services in order to augment or confirm other diagnostic tests, a significant competitive advantage when competing against other labs. In addition, NeoGenomics uses advanced testing algorithms to expedite accurate diagnostic and prognostic genetic test results.

Both cytogenetics and molecular testing are important and highly-accurate diagnostic tools in the fight against cancer. New tests are being developed rapidly and the market is expanding. Genetic/molecular testing requires specialized equipment and credentialed individuals, typically at PhD level, to certify the results. Genetic technologists, highly trained and educated in specialized university genetics programs, are also required to perform the testing using sophisticated microscopes and other lab equipment.

Differentiators

Genetics Testing Technology


The medical testing laboratory market is composed of three primary segments: clinical laboratory testing, anatomic pathology testing and genetic/molecular testing. Clinical labs typically are engaged in high volume, high automation routine tests on blood and urine, such as cholesterol screening and yield relatively low average revenue per test.

Anatomic pathology (AP) testing evaluates tissue and usually seeks to answer the question: is it cancer? The most widely known AP tests are Pap smears and skin and tissue biopsies. AP tests are typically more labor and technology intensive than clinical lab tests and have higher average revenue per test than clinical lab tests.

NeoGenomics is focused on the third and fastest growing subset of the market, genetic/molecular testing. Genetic/molecular testing analyzes chromosomes, genes and DNA for specific abnormalities. The company’s customers request a variety of genetics testing services that are used to confirm diagnosis of various types of cancer. NeoGenomics currently offers three primary types of testing services: a) cytogenetics testing, which analyzes human chromosomes, b) Fluorescence In-Situ Hybridization (FISH) testing, which analyzes abnormalities at the gene level, and c) flow cytometry testing, which analyzes clusters of differentiation on cell surfaces.

Cytogenetics involves analyzing chromosomes taken from the nucleus of cells for abnormalities in a process called karyotyping. A karyotype evaluates the entire 46 human chromosomes by number and banding patterns to identify abnormalities associated with diseases.

Recent News
NeoGenomics Announces Executive Appointments
NeoGenomics Reports Second Quarter 2010 Results
NeoGenomics Schedules its Q2 2010 Earnings Release for July 29, 2010
NeoGenomics Provides Early Look at Second Quarter Results
NeoGenomics to Present at Noble Financial’s 6th Annual Equity Conference on Monday, June 7th

    Risk Factors
  • Rapid scientific change
  • Highly competitive market
  • Industry shortage of highly trained genetic technologists
  • Dependence on third party payments



The Outlook Revenue for the first quarter of 2010 rose 22% to $8.4 million over $6.9 million a year ago. Revenue increases were driven by significant growth in all key testing services. Requisitions increased by approximately 25% and test volume increased by 34% over the first quarter of 2009. Adjusting for the adverse impacts caused by the internalization of bladder cancer FISH testing by the company's largest client beginning in mid-2009, revenue and test volumes from other clients grew by 42% and 54% .

The company said it continued to invest in growth initiatives. Sales and marketing expenses grew by $429,000 or 32%, driven by investments made throughout 2009 in the size of the sales force and in marketing capabilities. G&A expenses increased by $561,000 or 24% mainly due to additional management personnel and $200,000 in R&D costs to develop the Melanoma FISH test.

The company said it set a new revenue record for sales in March. The company also said it was making "substantial progress" toward profitability. Gross margins increased by 1.1%. The compony said it was successful in renegotiating its accounts receivable-based credit facility and currently has up to $5 million of liquidity available through the facility.

The launch of the MelanoSITE melanoma FISH test in mid-February is regarded by management as the "most significant" corporate event in the first quarter. The company now has approximately 80 pathologists trained to use the new test and volumes are starting to grow. The company expects MelanoSITE test volumes to remain "modest" until the results of the peer reviewed journal can be published later in 2010. The company said it is receiving "great feedback" from the doctors who are already using the test.

The company said it expects revenue in the second quarter of 2010 to be between $8.8 million and $9.2 million with a net loss of $0.00 -($0.02) per share.

Management
Executive Chairman and Interim Chief Executive Officer-
Douglas M. VanOort

Chief Financial Officer -
George A. Cardoza

Executive Vice President – Finance, Director -
Steven C. Jones

President and Chief Science Officer, Director-
Robert P. Gasparini, M.S.

Vice President, Sales & Marketing-
Grant Carlson

Vice President of Business Development-
Robert J. Feeney, Ph.D.

Director-
Michael T. Dent, M.D.

Director-
George G. O'Leary

Director-
Pete Peterson

Director-
William J. Robison

Director-
Marvin E. Jaffe, Dr.

Director of Finance-
Jerome J. Dvonch

Director of Operations-
Thomas J. Schofield

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