About one year ago, executives at NeoGenomics quietly changed their company's vision statement.
But the change was hardly insignificant. Previously, Fort Myers-based NeoGenomics' vision was to be the nation's leading cancer-testing company. Now, the company has global ambition.
First stop for NeoGenomics' global expansion: Geneva, Switzerland. That's where the company plans to open a laboratory by the end of the year.
Geneva is just the beginning. VanOort says the company will be looking at Asia and Australia in the future.
This is good news for Fort Myers, where the company is headquartered and operates a lab with some 250 employees. VanOort says the administrative staff will grow in the area as the company expands internationally, and the lab will grow as the company continues to add U.S. customers.
“I think Fort Myers is a great place to do business,” says VanOort. “We'll continue to hire here.”
What's driving the growth is the company's expansion into testing for pharmaceutical companies doing cancer research. Thanks to the blockbuster acquisition of rival Clarient from GE Healthcare in December 2015 that more than doubled revenue, NeoGenomics is well on its way to boosting that business, which VanOort projects will grow 20% annually.
Although NeoGenomics doesn't disclose the names of its pharmaceutical clients for privacy reasons, VanOort says it is helping most of the major pharmaceutical companies with more than 400 research and development projects.
Personalized medicine is driving the pharmaceutical industry to develop tests to tailor therapies that target certain cancers, something NeoGenomics has already been doing for its hospital and physician clients. Such predictive testing lets clinicians know if a patient will respond to certain medications, saving money by ensuring that expensive cancer drugs are only given to those who will benefit them and improving patient care by identifying the best therapies.
With the Clarient acquisition integrated and taken care off, NeoGenomics can continue to focus on growth in its clinical business, too. The latest quarterly results show total revenue rose 5% to $66.1 million in the second quarter compared with the same quarter a year ago. The company, meanwhile, because of its scale, boosted the number of clinical tests by 16% and posted a 13% reduction in the average cost per test.
NeoGenomics executives relentlessly pursue efforts to improve productivity — a key point because Medicare and insurance reimbursements for cancer tests continue to fall. “We have been able to reduce the cost per test at a rate that exceeds reimbursement declines,” VanOort says.
Still, VanOort says he doesn't expect major reimbursement changes next year. That's welcome news for a company that has targeted 15% annual growth in the number of tests for its physician and hospital clients.
Looking ahead, the laboratory industry continues to be highly fragmented. VanOort hints there may be further consolidation. “There are some deals to be pursued,” he says.
At a Glance
Headquarters: Fort Myers
CEO: Douglas VanOort
Stock symbol: NEO
Market capitalization: $753.39 million