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Business Observer Friday, Aug. 23, 2019 3 weeks ago

Large lab firm, behind $25M project, looks to get larger

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A stalwart Fort Myers company — with a nod to enthusiastic investors — targets major advances.

One of the region’s largest medical services companies plans to spend tens of millions of dollars on a new headquarters in Fort Myers.

NeoGenomics (NASDAQ: NEO) provides cancer-focused genetic testing services to doctors and patients worldwide, leveraging a network of laboratories with locations as far as Fresno, Calif., and Rolle, Switzerland. Founded in 2002, NeoGenomics, a Business Observer company to watch in 2016, generated $2.6 million in net income in 2018 on $276.7 million in revenue.

The firm’s new headquarters, expected to open in 2021, will be near the intersection of Alico Road and Three Oaks Parkway in Fort Myers, near its existing footprint. The spot is also near the Southwest Florida International Airport, one of the hottest spots for commercial real estate in Lee County. Projects near the airport include the Lee County Port Authority’s SkyPlex Commercial Park, which landed a pair of multi-building office deals with major employers in the past two years.

The new NeoGenomics facility — a $25 million and up project — will boast 150,000 square feet of space for laboratory and corporate support functions, with room to expand as needed. The $25 million price tag is part of an agreement among NeoGenomics and area economic development agencies, which is supporting the expansion with various credits. After the company spends at least $25 million on the facility, it would receive an annual tax credit of up to 5% of the eligible capital costs for up to 20 years for the cost of the building, according to a NeoGenomics statement.

“The economic incentives that the county has offered us — we’re so grateful for that,” CEO Douglas VanOort says. “And I think it’s smart on their part because these are good jobs that will add to the community.”

Other credits are tied to targets for job creation. The Florida Department of Economic Opportunity will provide up to $1.77 million in tax refunds to NeoGenomics beginning in 2022 if the company hires at least 295 new workers and pays them an average wage of $59,900. Lee County will provide an additional $354,000 in support if those targets are met. (The capital cost credit is also contingent on hiring at least 100 employees.)

Regardless of its agreements with local economic development officials, NeoGenomics faces a big challenge within its growth goals: It needs to hire a lot of people to deliver on its promises to Wall Street.

The company has been communicating aggressive growth targets to potential investors: some 10% from its clinical services division working with physicians and 20% from pharmaceutical services, which works with drug companies. And that’s on top of $400 million in estimated revenues for 2019. No surprise VanOort’s description of the company’s hiring makes it sound like the HR department is super busy.

“We’re looking for people in all disciplines of laboratory science. We’re also looking to hire people with an information technology background, either in programming or analysis or even data scientists. And the company is growing pretty quickly, so we would need to add to our administrative ranks as well, in finance and HR,” VanOort says, before adding he wouldn’t mind bringing in a few more pathologists and PhD-holding scientists as well. 

Although some positions will be filled from the local labor pool, VanOort says the company also plans to bring talented workers to the Fort Myers in the coming months. 

“We do have several good training programs, and we have a relationship with Florida Gulf Coast University, so we can develop our own people to some extent, but it’s not realistic to fill that many jobs locally, even though we would like to,” VanOort says.

Based on the company’s stock price, investors are buying the notion that VanOort and his team can deliver on the ambitious targets. NeoGenomics’ share price has nearly doubled so far in 2019, nearing $24 a share in mid-July after beginning the year just over $12. 

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