FORT MYERS — Cancer-testing firm Neogenomics posted a loss in the third quarter from a decrease in Medicare reimbursements and higher research and development expenses.
Neogenomics reported it lost $975,000 in the third quarter on revenues of $14.2 million. That compared with a loss of $143,000 on revenues of $11.3 million in the third quarter of 2011.
Average revenue per cancer test fell 12% in the third quarter compared with the same quarter one year ago because of declining Medicare reimbursements. Medicare is the federal health-insurance program for older people. Neogenomics estimated it lost $1.3 million in revenues as a result.
Total operating expenses were $6.6 million, a 31% increase from last year's third quarter, primarily as a result of a $683,000 increase in research and development. The company is developing new cancer tests to boost revenues.
Despite the drop in Medicare reimbursements, Neogenomics reported revenue for the third quarter was $14.2 million, a 26% increase over third quarter of 2011. Test volume increased by 42%.
In a statement, Douglas VanOort, the company's chairman and CEO, says the company can weather the Medicare cuts. “We expect to overcome the impact from this regulatory change within a few quarters through aggressive cost savings, productivity improvements, new product introductions and continued growth in each of our core laboratories,” he says.
“Our sales pipeline is strong, we are executing plans to gain further efficiencies and we remain committed to innovation,” VanOort says. “By growing our business, lowering our costs and driving innovation, we are becoming America's premier cancer testing laboratory.”