Biotech Values

[apljack]

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.