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TTPH With no material news, the company has moved off the bottom and has shown remarkable stamina. Currently at $9/share, this was under $4/share after a nosedive of epic proportions when their last study failed to reach stat sig level for Eravacycline. Something tells me that the latest confirmation trial is going well.
NVIV "InVivo Therapeutics Announces Seventh Patient Conversion in The INSPIRE Study of the Neuro-Spinal Scaffold™
"InVivo Therapeutics Holdings Corp. (NVIV) today announced that the patient enrolled in January in the INSPIRE study of the Neuro-Spinal Scaffold has improved from a complete AIS A spinal cord injury (SCI) to an incomplete AIS B SCI in the time between the one-month and the two-month evaluations. This is the seventh out of the 11 patients (63.6% conversion rate) with at least one month of follow-up to have had an AIS grade improvement. Two additional patients are early in follow-up and have not yet had their one-month visit. The AIS conversion rate observed in the INSPIRE study to date is considerably higher than published rates observed in a range of SCI natural history databases that are all below 25%."
The conversion rate is now set to be better than baseline data even if the ramaining 9 patients to be enrolled fail to advance to AIS B status (which seems unlikely given the rate of conversion so far.) The apparent knock on this company is that they did not enroll a control arm for the study and report that they will use historical data to argue for a natural control. For those not familiar with the co.'s strategy, they are preparing for an HDE application with the FDA.
https://finance.yahoo.com/news/invivo-therapeutics-announces-seventh-patient-120000446.html
NVIV: InVivo Therapeutics Announces Sixth Patient Conversion in The INSPIRE Study of the Neuro-Spinal Scaffold™
InVivo Therapeutics Holdings Corp. (NVIV) today announced that the patient enrolled in December in the INSPIRE study of the Neuro-Spinal Scaffold has improved from a complete AIS A spinal cord injury to an incomplete AIS B spinal cord injury in the time between discharge and the one-month evaluation. This is the sixth out of the eleven patients (54.5% conversion rate) in follow-up to have had an AIS grade improvement. Two patients who have not yet converted are early in follow-up, with conversion possible before the six-month endpoint. The INSPIRE conversion rate is considerably higher than rates observed in a range of SCI natural history databases.
https://finance.yahoo.com/news/invivo-therapeutics-announces-sixth-patient-130000896.html
This 6th patient places the study in clear reach of its goal of conversions at a rate greater than the 25% base rate for patients with this type of injury. The study has a goal of 20 patients in all and will follow and HDE exemption pathway for FDA approval. There is no control arm; the company is using base rates for AIS conversion for comparison.
Enrollment has been slow. Inclusion criteria requires the procedure within 96 hours of injury, a high bar for convincing a critically injured patient to undergo an experimental invasive procedure, so I doubt that the study will be completed until some time in early 2018. That said, the company has positioned itself to be ready to engage in many more procedures once the study inclusion criteria have been lifted. Rather than building a sales force, the company has signed up 30 major centers for the study, arguably pre-training all of these centers to use the procedure clinically once they get approvale. The following are the enrolled centers, an impressive list:
Allegheny General Hospital, Pittsburgh, PA
Banner University Medical Center, Tucson, AZ
Barnes-Jewish Hospital at Washington University Medical Center, St. Louis, MO
Barrow Neurological Institute – St. Joseph’s Hospital and Medical Center, Phoenix, AZ
Ben Taub Hospital/Baylor College of Medicine, Houston, TX
Beth Israel Deaconess Medical Center, Boston, MA
Carolina Neurosurgery and Spine Associates/Carolinas Rehabilitation, Charlotte, NC
Cooper Neurological Institute, Camden, NJ
Foothills Medical Centre, Calgary, Alberta, Canada
Goodman Campbell Brain and Spine/Indiana University Health Neuroscience Center, Indianapolis, IN
Hospital of the University of Pennsylvania, Philadelphia, PA
Keck Hospital of University of Southern California, Los Angeles, CA
Medical College of Wisconsin/Froedtert Hospital, Milwaukee, WI
Mount Sinai Hospital, New York, NY
Northwestern Medicine, Chicago, IL
Oregon Health & Science University, Portland, OR
Rhode Island Hospital, Providence, RI
Rutgers New Jersey Medical School, Newark, NJ
Michael’s Hospital, Toronto, Ontario, Canada
Thomas Jefferson University Hospital, Philadelphia, PA
Toronto Western Hospital, Toronto, ON, Canada
University of California, Davis Medical Center, Sacramento, CA
University of California, San Diego Medical Center, San Diego, CA
University of Iowa Hospitals and Clinics, Iowa City, IA
University of Kansas Medical Center, Kansas City, KS
University of Louisville Hospital, Louisville, KY
University of New Mexico Hospital, Albuquerque, NM
University of Pittsburgh Medical Center Presbyterian, Pittsburgh, PA
University of Virginia Health System, Charlottesville, VA
Vidant Medical Center, Greenville, NC
Re: OCRX /STOP-HE primary and secondary endpoints
Thanks for the reply. A review indicates that the Modified Westhaven Score is a 24-point rating, versus the Standard Westhaven Score, which is 4-point, a much finer discrimination of change.
From what I gather in my review of this candidate, this looks like a good risk at $2/share.
Best,
aj
OCRX: Phase 2B Efficacy/Safety of Ornithine Phenylacetate in Hospitalized Cirrhotic Patients With Hepatic Encephalopathy (STOP-HE) (STOP-HE)
Just wandered over to clinicaltrials.gov to take a gander at this study and the outcome measures. Not sure what is being used to measure the primary outcome (change from baseline in hepatic encephalopathy stage), but I can state that the secondary measures (Modified Orientation Log and GCS) are pretty gross measures. One would expect positive changes on these measures simply by hospitalizing a patient who has a compromised liver and preventing them from further abusive intake, so the changes measured are relative changes in addition to the return to baseline. Just wondering if there are others here who might see some problems with the lack of precision in these outcome measures.
From the site:
Primary Outcome Measures:
Change from Baseline in Hepatic Encephalopathy Stage [ Time Frame: Up to Study Day 19 ] [ Designated as safety issue: Yes ]
Secondary Outcome Measures:
Change from Baseline in Modified Orientation Log [ Time Frame: Up to Study Day 19 ] [ Designated as safety issue: Yes ]
Length of hospital stay [ Time Frame: Up to Study Day 19 ] [ Designated as safety issue: No ]
Other Outcome Measures:
Change from Baseline in Glasgow Coma Scale [ Time Frame: Up to Study Day 19 ] [ Designated as safety issue: Yes ]
Two new pieces of news
1. As you are all probably now aware, NEO closed on a new credit facility, increasing revolving credit, retiring an old loan, establishing a new loan and retiring 8.6 million in preferred stock issued to GE as part of the purchase of Clarient. This reduces the official share count be the 8.6 million shares (GE still has another 6.6 million shares that could also be retired).
In what looks like a response to this move, Cantor Fitzgerald initiated coverage of NEO yesterday (12/26/16) with a "buy" rating and a price target of $11. This target is just about what one would expect to see to bring the market cap back to the value we had prior to the issue retirement.
https://www.marketbeat.com/stocks/NASDAQ/NEO/?RegistrationCode=SocialMedia-Twitter
Can't say that I have any ideas. The quarter is in the books, the co. has been air tight in announcing both upside and downside surprises, with nothing this quarter. Only speculation, but there may be short-term investors who were expecting an upside surprise announcement and/or more momentum play as we move into the CC. I'm expecting in-line to modestly better than expected numbers, but we will all have to wait and see.
Short Interest is up for NEO, according to the following website:
http://www.thecerbatgem.com/2016/10/01/neogenomics-inc-neo-short-interest-up-59-9-in-september.html
I don't check Google Finance very often, but the site has a link to Cerbat Gem, which posted that the short interest is up as of mid Sept to 10.2% of shares. The site also summarizes the number of inst. investors who have added to their position. If we have a positive quarter, I suspect that there will be something of a short squeeze to cover.
NVIV: "
Not sure where the chatter is posted (please share if you can)"
From a YMB post 2 days ago (I have not listened to mgmt's comments so am taking this FWIW), "Perrin has already said that In Vivo is planning to sit down with the FDA before the end of 2016 (Q4206) to work out the logistics of the design for the scaffold + NSS trial--in fact I bet that might be what's going on right now (he hasn't "abdandoned"[sic] that approach at all) The company (unlike the time that Reynolds was CEO) has gone to great lengths to cultivate a relationship with the FDA--I have no doubt that there are a lot of things/discussions/negotiations going on right now that shareholders are not aware of--and the company also continue to hire very qualified people to help in marketing the scaffold-something I'm sure they wouldn't do if they had doubts this would ever get to market"
Chatter, but logical given the product and the science to date.
aj
"Wonder who made money off the STEM"? I do too and a look at the last several days' trading reads like a sucker play.
NVIV and STEM: I don't follow STEM but even a quick review of the latest news for the co. suggests it's a basket case, probably not worth the effort. The co. could access neural stem cells from any number of academic institutions should they choose to move forward, and the co. has many institutional collaborators in place. Chatter on other MB's suggests that a NSS study should be the next step, maybe even bypassing a cervical trial.
"neuro-scaffolding " that doesn't sound like a known MOA to a neuroscientist.
Can't expect you to know everything in the domain of neuroscience, but it happens that, as a neuropsychologist with my hand in both dementia work and rehab work, I AM familiar with the term. See below:
https://www.researchgate.net/profile/Evan_Snyder/publication/11493954_Teng_YD_Lavik_EB_Qu_X_Park_KI_Ourednik_J_Zurakowski_D_Langer_R_Snyder_EYFunctional_recovery_following_traumatic_spinal_cord_injury_mediated_by_a_unique_polymer_scaffold_seeded_with_neural_stem_cells._Proc_Natl_Acad_Sci_USA_993024-3029/links/0deec519ba16803f05000000.pdf
http://www.ncbi.nlm.nih.gov/pubmed/24007776
http://www.ncbi.nlm.nih.gov/pubmed/23098738
I posted the Nyer article as it is an easier read than the technical science journal articles (for those even further away from meuroscience as their wheelhouse), the science and technology is quite good and about to get much better. JM2C
aj
I prefer to invest in biotechs where there is no significant risk that the mechanism-of-action doesn't work.
With this in mind, you might want to drill down some on NVIV. Their first product is neuro-scaffolding that apparently works quite well and is simply the first step and foundation for what might be a whole new paradigm in SCI treatment that might include insertion of stem cells and/or olfactory sheathing cells autologously harvested from the patients to increase the likelihood of new cell generation.
More on Olfactory ensheathing cells can be found in the following NYer article:
http://www.newyorker.com/magazine/2016/01/25/one-small-step-annals-of-medicine-d-t-max
NVIV " they met the minimum treshold imposed by FDA "
Right, and to remind others, the company is expected to be regulated by the US Food and Drug Administration (FDA) as a class III medical device through the Humanitarian Device Exemption (HDE) pathway.
I am banking on this pathway to be much more easy to successfully complete than other device approval pathways.
aj
NVIVEntered a position today after the following news:
InVivo Therapeutics Announces Fifth Patient Conversion in INSPIRE Study of the Neuro-Spinal Scaffold™
"InVivo Therapeutics Holdings Corp. (NVIV) today announced that the ninth patient implanted with the Neuro-Spinal Scaffold™ in the INSPIRE study has improved from a complete AIS A spinal cord injury to an incomplete AIS B spinal cord injury in the time between the two- and three-month evaluations. This is the fifth out of the eight patients (62.5% conversion rate) in follow-up to have had an AIS grade improvement to date. Several large natural history databases indicate that fewer than 16% of patients with complete thoracic injuries have an AIS grade improvement by six months post-injury.* Historical conversion rates are lowest for patients with high thoracic (T2-T5) injuries, with fewer than 8% of patients converting by six months post-injury. The neurological level of injury for this patient was T4.
“The evidence obtained to date in the INSPIRE study is tremendously encouraging. It has been rewarding to be involved in the study and to observe this patient’s recovery to date, and I hope that the patient continues to make progress,” said Stuart Lee, M.D. Dr. Lee, Principal Investigator at Vidant Medical Center in Greenville, NC performed the ninth patient implantation procedure.
“Having five patients improve AIS grades so early in the INSPIRE study is a fantastic achievement and a major milestone for InVivo,” said Mark Perrin, Chief Executive Officer and Chairman. “If we continue to observe AIS conversions at a similar rate, we will dramatically exceed the Objective Performance Criterion (OPC) measure of study success. Our current conversion rate is four times the rate in natural history databases, which is extremely encouraging. We look forward to completing the INSPIRE study as quickly as possible and applying for an HDE in 2017.”
The OPC measure of success for the INSPIRE study is defined as five (25%) or more of 20 evaluable patients in the study having improved by at least one AIS grade at the six months post-implantation assessment. If all five converted patients to date do not revert to AIS A before reaching the six month assessment and are deemed evaluable at the end of the study, then the OPC will have been met."
The data is looking quite good and the pace of the outcome data remain a slow trickle, mostly because of the small sample size. I have posted before that ANY approvable surgical intervention for SCI will be seen as a big move forward for this otherwise untreatable injury.
aj
https://finance.yahoo.com/news/invivo-therapeutics-announces-fifth-patient-120000177.html
Q2 CC
I took the opportunity to listen to the entire CC this afternoon. Mgmt. reported that integration of the legacy NEO business and Clarient continues to move along, but at a pace that I found slower than expected. The biggest task appears to be migrating the Clarient customer base onto the NEO LIS system, which will not be completed until mid 3rd quarter (I recall August being the estimate). Until then, mgmt. admits that the sales force is "distracted" by teaching Clarient customers use of the NEO LIS, detracting from their core duties of finding new customers. That said, NEO continued to grow their legacy business by 32% and margins (ex-Clarient) improved 40 basis points. Other positive news was an improvement in Biopharma business contracts and letters of intent, as well as a statement that some of the biopharma customers want NEO to be able to provide this segment of their business outside of the US (which mgmt stated was in their plans.) I was surprised, to some degree about statements regarding the number of Med Centers/Med schools who are now customers. These are big customers and generate lots of revenue. I had opined elsewhere that more and more hospitals will capitalize on NEO's tech only services as this relieves the hospitals of capital expenditures (for expensive equipment and manpower) while still allowing them to charge for services.
Consolidation of the Mission Viejo and Irvine labs also continue to occur, again with a slow steady pace. Mgmt sees significant cost savings based upon work efficiency improvements and supply chain cost savings. The proposed OPPS from CMS was stated to be a positive (versus the reduction in CMS reimbursement in Flow Cytometry reimbursement, which was substantial percent wise but small in the mix of revenue).
Lastly, a comment regarding conversion of preferred shares was made, with no specific timeline regarding conversion, but mgmt noting that they are sensitive to timing regarding this and will execute when they think they can manage it. They closed by reminding all that conversion will reduce overall shares available, which will have a positive impact on financial metrics.
Looking forward, I can see several potential developments that will be positive. First would be any announcement of a biopharma contract big enough to have material impact. This would likely come in the form of a multi-study or pharma-level contract that would include ALL of the work for that pharma. Any news of the opening of a European or Asian lab for biopharma work would also be material (biopharma revenue was stated to be about 20% of business if memory serves, but I was not taking notes) because biopharma work revenue is much higher margin than clinical work.
We beat by $2 million despite ongoing "distractions" on strong growth of tests numbers and growth of margins. When the dust integration settles but Q4, we may see outstanding revenue growth. Wild card? A new Federal administration that finds a way to terminate the sequester and focuses on "the moon-shot" of beating cancer, with better reimbursement for our business.
I invite all to review the CC and comment here.
http://seekingalpha.com/article/3991754-neogenomics-neo-ceo-douglas-vanoort-q2-2016-results-earnings-call-transcript
2nd Quarter Earnings
Looks pretty good, Reuters is reporting revenue of $63.1 million, $2 million above estimates, just like I predicted. Adjusted revenue of 4 cents/share is 1 cent better than estimates.
* Neogenomics reports 159% revenue growth to $63.1 million and strong gains in profitability in the second quarter of 2016
* Q2 adjusted earnings per share $0.04
* Q2 loss per share $0.07
* Q2 revenue $63.1 million versus i/b/e/s view $61.1 million
* Q2 earnings per share view $0.03 -- Thomson Reuters I/B/E/S
Time will tell how the street views the results. Looking forward to the CC.
GLTA
2nd quarter Report and CC
We are one week away from the news on 2nd quarter financials. I will go out on a limb and predict that we beat expectations (despite analysts' increased predictions) by $2-3 million, with an earnings beat of 2-4 cents/share. I expect to hear that the premiere deal is gaining traction and that integration activities have continued to be smooth and with the surprise that back-billing has been more successful than expected. Look for any news of new CRO deals/contracts as an added bonus.
NEO and the 2017 CMS OPPS rate change proposals
If you haven't read this elsewhere, CMS has proposed to increase the Outpatient Prospective Payment Service (OPPS) 1.55% for 2017. If we see a change in congress and with it, an end to the sequester, the rate would increase another 0.75%. Both of these should go directly to our bottom line.
"CMS proposes to update OPPS rates by 1.55 percent. The change is based on the projected hospital market basket increase of 2.8 percent minus both a 0.5 percentage point adjustment for multi-factor productivity (MFP) and a 0.75 percentage point adjustment required by law."
https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-07-06.html
NEO at TheTechTrader site
Thanks for posting this, I like hearing technical analyses as I know less than most about technicals. Curious that the commentator covered several gold mining co.'s as well. I own MUX, which has also done quite well and has broken out of a strict POG pattern.
This morning brings news from "The Street" blog that suggests locking profits in when technicals bring you to a new high. As far as I'm concerned, this is a big buy/hold indicator as smart money is trying to grab up shares on strong performing stocks.
http://realmoney.thestreet.com/articles/07/13/2016/lock-down-gains-big-winners?puc=yahoo&cm_ven=YAHOO&yptr=yahoo
New analyst comments are out.
Noted in a Seeking Alpha Biotech blog from 7/8/16 is the following "Small-cap cancer diagnostics firm NeoGenomics (NASDAQ:NEO) also getting a nice shout out from the analyst community this morning. Both BTIG and Craig-Hallum are reiterated Buy ratings with $10 and $12 price targets, respectfully. This is the first analyst commentary I can find on NEO in 2016. The company was last profiled here on Seeking Alpha in late April."
NEO and the run up to the 7/26 CC
I am a long-term holder who has been invested here since 2008 and usually post on YMB. The recent change(s) from Yahoo make it difficult to carry on the usual conversations, so I intend to post here from now on.
Technicals for NEO have been excellent of late. We have had a recent double bottom near $7.75 and strong rebound, forming a classic "W" pattern. Today's move has been strong on strong volume. Nearing a new breakout for $11-12/share range.
2017 CMS reimbursement OPPS proposed rules
CMS has released their proposed rules and reimbursement schedule (in general) for 2017. Hospital groups are not happy (see link) and the overall rate increases are modest, but at least we are seeing a rate increase. The devil will be in the details, but I am hopeful that genetics testing reimbursements will hold and possibly see some gains. The release of the rule proposal was quite positive on NEO's share value on Friday.
http://www.beckershospitalreview.com/finance/cms-releases-opps-proposed-rule-for-2017-12-things-to-know.html
Theranos: I suspect that it will just be a matter of time before some group of lawyers find cases of harm done by invalid test results and descend on Theranos like so many piranha in a feeding frenzy.
Theranos: The fall from grace continues.
"Troubled blood-testing firm Theranos voids results of 2 years worth of tests"
http://finance.yahoo.com/news/theranos-voids-two-years-edison-test-results-wsj-032307616--finance.html
(Reuters) - Blood-testing firm Theranos Inc notified the U.S. federal health regulators that it voided results from its Edison blood-testing devices for two years, the Wall Street Journal reported on Wednesday, citing a person familiar with the matter.
The company informed the Centers for Medicare and Medicaid Services that it has issued tens of thousands of corrected blood-test reports to doctors and patients, nullifying some results and revising others, the Journal reported, citing a person familiar with the matter.
TTPH-Yesterday's news, while a setback, does not undermine the fundamental value of TTPH, it only sets back my timeline on investment. I have plans on increasing my position as the co. nears the NDA, and now there is more time to do that, IMO. The co. is well funded, and the fundamental proposition of a new platform for development of tetracycline (and related) antibiotics is an attractive investment premise.
That said, I won't be looking for an additional position at least until the smoke clears, and then will take my time in adding, the co. is now 2-3 years away from an NDA.
Best, aj
IRWD: We investigated Ironwood's Linzess and exposed hideous issues. Any PR that contains this statement deserves a closer look at who is making it. I did some cursory research on the firm who put this out, Phase Five Research. They have an inoperable website and the only thing I could find was a summary of the company on Seeking Alpha. It is as follows:
"PhaseFive initiates research-intensive analysis of Healthcare and Biotechnology companies using groundbreaking scientific intelligence tools. We focus on long/short event-driven opportunities centered on clinical, regulatory and early commercial development. Our research approach relies on synergizing diverse talents. PhaseFive’s team is built on the knowledge and vast experience of Neurobiochemistry PhDs, Big Data experts and seasoned Life Science investors. Our track record reflects our ability to assess a company’s true fair value at critical stages, looking beyond hype and misunderstood perceptions. PhaseFive focuses on catalyst events in small-to-medium cap Healthcare companies. These catalyst events include clinical trial outcomes, regulatory procedures and commercial developments."
Both the PR and the summary suggest that Phase Five is a hack firm, looking to leverage "bad news" into a short position. Nothing in the PR indicates that the data they "uncovered" was valid or even true. I take such PR's with a grain of salt.
aj
NVIV: I would not underestimate the patient benefit and care giver benefit to gaining bowl and bladder control. It's huge if you know anyone with AIS-B vs AIS -A.Good point, and for those unfamiliar with the huge long-term challenges for SCI patients, just the reduction in skin breakdown because of chronic incontinence (and all the infection complications that go with it) will be huge.
Quite frankly, if I had an SCI I would be asking for a neurosurgeon willing to use both methods, repeatedly over time, to address my paraplegia.
Best (and I have NVIV on my watch list now thanks to this thread),
aj
NVIV: While the results sound quite promising, keep in mind that moving from AIS A to Incomplete AIS B means the recovery on ONLY some sensory functioning. The real game changer will be getting to AIS C/D (which involves some level of motor function recovery). Not knocking the results, just putting it into perspective. With that said, anyone who is interested in the REAL cutting edge of spinal cord injury intervention should read the following:
http://www.newyorker.com/magazine/2016/01/25/one-small-step-annals-of-medicine-d-t-max
Harvesting olfactory ensheathing cells, and implanting them has provided the best results (to my knowledge) in this domain.
Best,
aj
NEO-NeoGenomics Reports 159% Revenue growth to $59.7 Million and 442% Adjusted EBITDA increase to $8.2 Million, Driven by Clarient acquisition and Strong Volume Gains Company Increases Full Year 2016 Revenue, EPS & Adjusted EBITDA Guidance.
https://finance.yahoo.com/news/neogenomics-reports-159-revenue-growth-110000183.html
Lots to look at here, but in all, I am very pleased with the first full quarter results since the Clarient acquisition. Highlights include:
-Average revenue-per-test for clinical genetic tests decreased by 6% to $390, primarily due to the inclusion of Clarient's lower average reimbursement rate per test in the combined test mix.
-Consolidated gross margin for the quarter was 45.5% as compared to 41.5% in last year's first quarter. Gross margin improved due to a 13% reduction in average cost-of-goods-sold per clinical genetic test ("Cost per Test") compared with last year.
-Consolidated Adjusted EBITDA(1) was $8.2 million, an increase of 442% over the prior year. Adjusted Net Income(1) in the first quarter was $2.9 million versus a loss of ($0.3 million) in the prior year. Adjusted Diluted EPS(1) was $0.03 per share as compared to $0.00 per share in Quarter 1 2015.
-NeoGenomics also revised upward its guidance for fiscal year 2016 today. The Company now expects full year 2016 revenue to be in the range of $242 - $252 million, Adjusted EBITDA(1) to be in the range of $35 - $40 million, Adjusted Net Income(2) to be in the range of $8 - $13 million, and Adjusted Diluted EPS to be in the range of $0.08 - $0.13 per share.
In reply to a PM to Dew some time back, I believe that my valuation of the post-merger co. was at least 5X annual revenues, putting my target valuation in the $17-19/share range. Whatever happens (and I suspect that the several analysts covering NEO who have been silent since the acquisition will now come out with a new full analysis set), NEO is set to go significantly higher than yesterday's close as it has tread water since the acquisition.
AJ
Chirp.......chirp.....chirp.......
Even the cursory review of this co. gives one the view of a scam. Really? A cancer drug development co. that is now ready to attack Zicka?
NEO: Understood, Peter. I agree with your points regarding the headwinds for NEO (and the sector in general) but would point out that Mgmt has announced that they think that they can hold and possibly improve gross margins moving forward. From the 10/29/15 PR on Q3, 2015, Van Oort had this to say, "We are very proud of our laboratory operations teams. During Quarter 3, we reduced Cost per Test in our base business by a significant 12.5% from last year. These improvements were not the result of staffing reductions, but rather were driven by a 16% improvement in Lab Productivity(3) as a result of strong quality improvement programs. These improvements allowed us to fully offset the 11.6% decrease in reimbursement and modestly expand gross margin compared with last year."
There is an outside chance that CMMI will improve reimbursement in their final decision(s) for 2016. CMMI has cut and cut and cut, and the industry is crying uncle and lobbying for a more realistic reimbursement model. If improvements in reimbursement come, even modest ones will boost earnings for NEO considerably.
JM2C,
aj
What is a fair enterprise value for NEO, IYO?
I would mark the enterprise value in the $800 million range. Giving the co. a 4X multiple for forward revenues (currently estimated at $218 million for FY 2016) minus debt, the current loan for the GE purchase and grants of preferred stock. This would value the share price at about double where we are now.
Just a back of the napkin calculation, mind you.
aj
Peter, NEO has had several liquid biopsy products available for hematologic cancers for a year but this is their first one for solid tumors. The company is quite undervalued at this point, IMO.
For those interested in the investment premise, here it is:
The company's value is still largely based upon their core business, which was based on analysts' views of their growth prior to two major developments. The first was an announcement that NEO had become the preferred provider for Premiere Inc., opening a market for lab testing in 3400 independent hospitals. The second was the announcement of the acquisition of Clarient from GE. It appears that in developing the deal with Premiere, NEO became aware of the need for a much larger lab infrastructure, hence the GE deal. Mgmt has been quite tight lipped about revenue projections, allowing only for a prediction of revenues based upon their old core business growth + the core business of Clarient. I suspect that growth will be much better because of the Premiere deal and Mgmt won't speculate about this until they have several quarters' worth of data on lab orders from this deal.
Best,
aj
NEO "NeoGenomics Launches new Liquid Biopsy Tests for Monitoring Solid Tumors and Predicting Resistance to BTK Inhibitors"
FT. MYERS, Fla., Dec. 8, 2015 /PRNewswire/ -- NeoGenomics, Inc. (NEO), a leading provider of cancer-focused genetic testing services, announced today an expansion of its liquid biopsy testing menu to include two new tests, a NeoLAB™ Solid Tumor Monitor and a NeoLAB™ BTK Inhibitor Acquired Resistance test. Each of the new tests uses cell-free DNA (cfDNA) from peripheral blood plasma without the need for tissue biopsies.
The NeoLAB™ Solid Tumor Monitor is designed to quantify and track genomic abnormalities in tumors using cfDNA. It is offered to help the treating physician monitor cancer patients to evaluate response to therapy. Information from the liquid biopsy test can also be used to capture the heterogeneity in the cancer, monitor the emergence of new resistant clones, and predict relapse. Because this liquid biopsy test may not be appropriate for some patients with early disease, NeoLAB™ Solid Tumor Monitor testing is restricted to patients with documented metastatic cancer who carry specific molecular abnormalities that were confirmed at NeoGenomics by tissue biopsy testing. Testing of cfDNA in this subgroup of patients is performed using next generation sequencing (NGS) along with a propriety high-sensitivity procedure, which significantly increases NGS sequencing sensitivity.
The NeoLAB™ BTK Inhibitor Acquired Resistance test is designed to predict resistance to Bruton Tyrosine Kinase (BTK) inhibitors using highly-sensitive proprietary technology developed at NeoGenomics. Resistance to BTK inhibitors is associated with mutations in the BTK and PLCG2 genes. This new test is capable of detecting mutations in these two genes prior to tissue or cell-based testing. The test can be used to monitor patients treated with BTK inhibitors, especially in chronic lymphocytic leukemia (CLL), mantle cell lymphoma and diffuse large B-cell lymphoma (DLBL). Using this methodology, mutations in BTK and PLCG2 can be detected approximately 2 to 12 months prior to the appearance of overt clinical resistance to therapy. Early detection of potential resistance may alert the treating physician to develop a new strategy for therapy or for a combination of therapies that may overcome resistance. The work and data confirming the clinical validity of this important test was selected for oral presentation at the December 2015 American Society of Hematology (ASH) annual meeting in Orlando, FL.
Douglas VanOort, NeoGenomics' Chairman and Chief Executive Officer, stated "The added medical value that liquid biopsies provide is now well-recognized. These new tests bring our menu of innovative liquid biopsy offerings to a total of 15 tests and demonstrate our commitment to being a leader in personalized medicine testing in order to improve patient care."
Dr. Maher Albitar, the Company's Chief Medical Officer and Director of Research and Development, commented "When properly used, liquid biopsies can provide very important information in managing solid tumors as well as hematologic neoplasms. Our goal for these two new tests is to help physicians make the proper change in therapy and replace expensive drugs that are not working with drugs that have the potential to work. Our proprietary advances in NGS allow us to increase the sensitivity of this important technology and make these liquid biopsy offerings possible."
https://finance.yahoo.com/news/neogenomics-launches-liquid-biopsy-tests-120000241.html
NXTM "NxStage Reports Record Third Quarter Financial Results And Increases Financial Guidance For 2015"
(This has been one of the most boring "wait for it" investments I have in my portfolio but has FINALLY broken out. The only disappointment in the numbers is that in-center revenue has not grown YOY; the co.'s strategy has been to have its devices used in their own dialysis centers and they have aggressively opened several to fill this segment of their business. They still need to be able to break even rather than lose money!)
- Revenue Increases to $86.5 million, up 15% from Q3'14
- Home Revenue Increases to $46.5 million, up 15% from Q3'14
- Company Raises Full-Year 2015 Revenue Guidance to be between $332 and $333 million and Narrows Net Loss Guidance
- Company Hosts Financial Analyst Day and Unveils Innovation Pipeline
https://finance.yahoo.com/news/nxstage-reports-record-third-quarter-122800042.html
NEO purchases Clarient
You beat me to the punch in looking this purchase up. After listening to the CC posted today from NEO, the purchase is slightly better than fair value given revenues, growth and EBITDA for the two companies. The CC made mention of Clarient's difficulties with growth (with a reported CAGR of about 7% over the last 5 years) in an environment of tough to swallow reductions in reimbursement for Flow Cytometry (their biggest revenue component), FISH, and other services, while NEO has fared somewhat better at adjusting to these reductions and effecting cost savings.
In retrospect, it looks like GE bought at a bad time and are now selling (really buying into NEO) because of NEO's complimentary services, acknowledged know how in reimbursement and leading edge nextgen sequencing.
I'm personally looking forward to the next 24 months as I see big growth in the sector, a leadership position in the sector for NEO, and possible relief from reimbursement problems as healthcare recognizes the utility of advanced and personalized genetics testing.
NEO"NeoGenomics signs Definitive Agreement to acquire Clarient, Inc."
"GE Healthcare retains significant stake in NeoGenomics and Parties agree to collaborate on Bioinformatics Initiative"
"FORT MYERS, Fla., Oct. 21, 2015 /PRNewswire/ -- NeoGenomics, Inc. (NEO), a leading provider of cancer-focused genetic testing services, announced today that it has reached an agreement to acquire Clarient, Inc., and its wholly-owned subsidiary Clarient Diagnostic Services, Inc., a provider of comprehensive cancer diagnostic testing to hospitals, physicians and the pharmaceutical industry (together "Clarient"). Clarient, a unit of GE Healthcare's Life Sciences business, is based in Aliso Viejo, California and Houston, Texas and has approximately 415 employees. Clarient had 2014 revenue of $127 million and Adjusted EBITDA(1) of approximately $13 million.
The acquisition will allow NeoGenomics to broaden its offering of innovative cancer diagnostic tests to hospitals and physicians across the country, and to accelerate its growth in the fast-growing worldwide market for pharmaceutical clinical trials and research. The complementary product offerings and expanded geographical reach of the combined companies are expected to provide customers with substantial benefits and create a significantly larger and more diversified provider of precision oncology diagnostics.
Clarient's outstanding pathology services and capabilities in the analysis of solid tumor cancers of the breast, colon and lung are highly complementary to NeoGenomics' industry-leading molecular testing services and extensive expertise in testing for hematologic cancers. Hospital, physician, and pharmaceutical industry clients will benefit from the combined company's ability to offer a wider range of world-class tests, closer geographical access to services, and enhanced service capabilities. The acquisition will allow the combined company to further leverage its existing laboratory facilities and infrastructure to drive productivity and lower operating costs.
The transaction purchase price includes $80 million in cash, $110 million in Preferred Stock, and 15 million shares of NeoGenomics Common Stock, subject to customary adjustments for working capital at close. The Preferred Stock will be issued at $7.50 per share and is redeemable at the option of NeoGenomics at any time over its ten year term along with any accrued dividends(2) at the original issue price with certain incentives for early redemption(3). After three years, GE Healthcare will have the option to convert the Preferred Stock and any accrued dividends to NeoGenomics Common Stock at $7.50 per share if the volume weighted average price of NeoGenomics' Common Stock is above $8.00 per share for thirty consecutive trading days. If still outstanding on the tenth anniversary, the Preferred Stock and any accrued dividends will automatically convert into common stock at $7.50 per share.
The transaction is subject to approval by the relevant anti-trust authorities and NeoGenomics' shareholders and is anticipated to close in Quarter 4, 2015. On a fully diluted basis, assuming full conversion of the preferred stock, GE Healthcare will beneficially own approximately 32% of NeoGenomics. As part of the transaction, the NeoGenomics Board of Directors will be expanded with the appointment of a new director from GE Healthcare. In addition, NeoGenomics and GE Healthcare have agreed to collaborate on a new bioinformatics initiative that combines their shared interest in precision oncology.
NeoGenomics' Chairman and CEO, Mr. Douglas VanOort, commented, "Our vision is to become America's premier cancer testing laboratory, and this acquisition is a major step forward in achieving that vision. We have always respected Clarient's outstanding capabilities, and are very pleased to be able to combine them with our own outstanding service offering. Hospital, physician, and pathology clients will benefit from our ability to offer the "best of the best" products and services available from each company. We are particularly pleased to add Clarient's sizable and fast-growing clinical trial support business to further strengthen our own initiatives in this area."
Mr. VanOort continued, "Providing there are no unexpected changes to reimbursement in 2016, we expect our revenue to more than double to approximately $240 - $250 million and our Adjusted EBITDA to more than triple to between $33 and $38 million on a pro forma basis in 2016. This will be a deliberately executed integration, and we expect synergy realization to begin modestly with approximately $4-6 million of realized synergies in 2016. However, by the end of year 3, we expect $20-$30 million per year of realized synergies as we strive to be the high-quality and low-cost provider in cancer genetic testing. Our increased scale will also enhance our ability to innovate in new areas of precision medicine. Of all the possible acquisition candidates we have reviewed, Clarient is by far the best fit for NeoGenomics."
Mr. VanOort concluded, "In addition, NeoGenomics and GE Healthcare have agreed to collaborate on a new bioinformatics initiative that combines their shared interest in precision oncology. The collaboration will explore the potential for new products that combine genomic and imaging data, with the aim of helping reduce healthcare costs and improving the care of patients with cancer."
Ms. Cindy Collins, CEO of Clarient Diagnostic Services, said, "We're proud of the highly talented and dedicated people at Clarient, who deliver an outstanding level of service to physicians and to leading players in the pharmaceutical industry, helping guide patient treatment and supporting the discovery and development of new medicines. We believe the business will benefit from the focus that will come from being part of NeoGenomics, while allowing GE Healthcare Life Sciences to focus on its core long-term growth areas in bioprocessing, cell therapy and disease imaging."
https://finance.yahoo.com/news/neogenomics-signs-definitive-agreement-acquire-110000561.html
TTPH That is truly a nosedive of epic proportions. This is acting like a one-trick/one-app pony even though the co. has other irons in the fire and at least a conceptual platform for the manufacture of tetracycline-like drugs that is completely synthetic.
Glad I just dipped my toes into this one rather than stepping into the deep stuff. There are people on YMB complaining that today has wiped 80% of their retirement account out; pretty aweful to put that much faith into a co. with no track record of ANYTHING but a good idea.
aj
TTPH"FDA Grants QIDP Designation and Fast Track Status to TP-271"
"Tetraphase is developing TP-271 with funding from the National Institutes of Health's (NIH) National Institute of Allergy and Infectious Diseases (NIAID) which supports preclinical development, manufacturing and phase 1 clinical, safety and pharmacokinetic evaluation of TP-271. In preclinical studies, TP-271 has demonstrated potency against Gram-negative and Gram-positive pathogens associated with respiratory tract infections."
This is TTPH's second fast track approval in two tries. For those who don't follow, TTPH has developed a synthetic manufacturing process for tetracycline drugs and stands to benefit from the ongoing (and never ending) cycle of drug resistant infections and new drug development. Its lead product candidate includes eravacycline, an intravenous and oral antibiotic for use as a first-line empiric monotherapy for the treatment of multidrug-resistant infections, including multidrug-resistant Gram-negative infections. The company is conducting a Phase 3 clinical trial of eravacycline with intravenous administration for the treatment of complicated intra-abdominal infections; and a second Phase 3 clinical trial of eravacycline for the treatment of complicated urinary tract infections with intravenous-to- oral transition therapy.
aj