NeoGenomics(US:NEO)2021-11-04 19:10Financial Data and Key Metrics Changes - Company revenue increased by 12% year-over-year to $121 million in Q3 2021, excluding discontinued COVID-19 PCR testing revenue [14][38] - Clinical revenues grew 11% year-over-year to $102 million, driven by a 7% increase in clinical volume and a 4% increase in revenue per test [38] - Adjusted EBITDA was a loss of $3 million in Q3, reflecting lower than anticipated revenues and expenses from recent acquisitions [47] Business Line Data and Key Metrics Changes - Pharma Services revenue grew 14% year-over-year to $19 million, with a year-to-date growth rate of 36% [42][43] - Pharma Services bookings increased by 41% year-over-year, reaching an all-time high of $49 million, with a record backlog of $261 million [16][43] Market Data and Key Metrics Changes - The company was significantly impacted by the Delta variant, particularly in Florida and Texas, which together represent over 20% of total revenue [39][40] - Daily volume trends in Florida were approximately 5% below previous lows, contrasting with a 9% increase in other sales regions nationwide [41] Company Strategy and Development Direction - The company presented a five-year growth plan to the Board, focusing on strengthening leadership in oncology diagnostics and launching the RaDaR assay for minimal residual disease testing [17][18] - Plans to double the customer-facing sales force and expand Precision Medicine teams to accelerate growth and market penetration [19][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, expecting higher rates of growth in core Clinical business and Pharma Services as COVID-19 cases decline [16] - The company is committed to investing in the RaDaR assay, anticipating it will significantly increase long-term growth rates [18][57] Other Important Information - The company is undergoing an internal investigation related to compliance with federal healthcare laws, with a reserve of $10.5 million accrued for potential damages [49][50] - The company is lowering its annual revenue guidance to a range of $482.5 million to $487.5 million due to the impact of the Delta variant [51][52] Q&A Session Summary Question: Can you provide insights on the EBITDA guidance and its trajectory? - Management indicated that limited access for the sales team in Q3 will impact Q4 topline, but investments in the sales team will begin to reflect in Q4 [63][65] Question: How do you view the competitive landscape in NGS and liquid biopsy? - Management emphasized their established relationships with community hospitals and oncologists as a competitive advantage, alongside their commitment to lead in the MRD market with RaDaR [79][80] Question: What is the expected timeline for the RaDaR assay's reimbursement? - Management is confident in their reimbursement strategy and plans to submit for initial reimbursement around the turn of the year [87][110] Question: Can you elaborate on the backlog in Pharma Services? - The backlog generally converts over an average of three years, with 60% to 80% of contracts expected to come through [102] Question: How will the company differentiate itself in the crowded MRD market? - Management highlighted their potentially class-leading sensitivity and established channels to customers as key differentiators [128][130]