FORT MYERS — A possible change in future government reimbursements for cancer tests caused NeoGenomics shares to fall 14% on Wednesday.
The shares recovered some ground today, but investors worried about a recent announcement by Medicare that it will not pay as much for some cancer tests as it has previously. The company's shares are publicly traded on the Nasdaq (symbol: NEO; recent price: $3.27).
The announcement overshadowed an otherwise positive earnings report from Fort Myers-based NeoGenomics. The company reported it earned $857,000 on revenues of $18.3 million in the quarter ending Dec. 31. That compared with a loss of $113,000 on revenues of $14.9 million in the same quarter in 2012.
“We are very proud of both our fourth quarter and full year results,” says Douglas VanOort, the company's chairman and CEO, in a statement. “Despite continued pressure on reimbursement, we achieved strong revenue growth and sharply increased gross margins.”
NeoGenomics has been pushing to lower the cost of testing to overcome the declines in reimbursements from the government and insurance companies. “We have also been successful at increasing productivity and reducing costs,” VanOort says in the statement. “As a result, we were able to drive 80% of the year-over-year revenue increase to gross profit in the fourth quarter, and increase net income by almost $1 million, despite a 3.7% reduction in average revenue-per-test over the same period.”
NeoGenomics also has been developing new tests to boost revenues. “With 68 new molecular tests launched over the last two years, we now have one of the broadest molecular testing menus in the world,” VanOort says in the statement.