Biotech Values

[apljack]

NGNM: xrymd, I'm interested in your pathologist's opinion(s) about NGNM. I find it interesting that "the big labs" (one would assume these are Quest and USLabs) are looking into providing tech only FISH services. This would suggest that they are taking note of NGNM's business model.

I am bullish on NGNM for reasons that go beyond tech only FISH. The genetics testing business is growing at 25% YOY in general, and NGNM has been able to grow at north of 70% YOY for the last three years. The industry is dominated by the two giants named above, and they tend to acquire the labs that are growing into their space rather than to compete directly with them. Given the healthy margins afforded in this space (NGNM is reporting 55% margins if memory serves) the big players are much better served in buying out their competitors rather than to compete by cutting into the margins. It is also true that these big co.'s can allow the smaller players to do the ground work of establishing a CLIA certified lab, get the lab cash flow positive and then profitable, rather than doing all of that themselves. The premise of NGNM has always been to build the co. big enough to become an attractive takover target.

aj