NeoGenomics is Poised to Grow further in
By Grant Zeng, CFA
Visibility and Liquidity Increased Through NASDAQ Capital
On December 6, 2012,
common stock was approved for listing on the NASDAQ Capital
Market and commenced trading on the NASDAQ Capital Market on
December 10, 2012 under the new ticker symbol "NEO".
The transition to the NASDAQ Capital Market is a significant
milestone for NeoGenomics and reflects the strong revenue and
operating income growth the Company has achieved over the last
several years. We think the upgrading is important to
the Company and its shareholders in the following matters:
- Trading on a NASDAQ Capital Market will raise the Company's
visibility and gain liquidity at the same time. NeoGenomics
shares have been traded OTC for a long time. Trading OTC is
often viewed as highly risky and less liquid to most investors
especially to institutional investors. As a result, many
institutional investors are restricted from buying shares
- The successful upgrade to be listed in the NASDAQ Capital
Market increases both visibility and liquidity of the Company.
As a result, many institutional investors can buy its shares
- Another way to attract institutional investors is through
the inclusion in an index. After being listed on NASDAQ Capital
Market, NeoGenomics could have the potential to be added into a
small cap index, especially in a small cap biotech index.
Inclusion in an index will further raise IMUC's visibility and
liquidity. At the same time, NeoGenomics will be automatically
included in some index funds which mirror the index which
includes NEO. This makes NEO more suitable for a broader group
New FISH TEST Will further Stimulate Top Line Growth
On December 17, 2012, NeoGenomics, Inc. (
) announced that it has validated and launched a laboratory
developed Fluorescent in Situ Hybridization (FISH) assay
for the surveillance of patients with Barrett's Esophagus
(BE). The test is highly sensitive for the detection of the
high grade dysplasia
indicative of precancerous changes.
BE is a very large market for NeoGenomics. Approximately 3
million Americans suffer from BE in the United States, a
condition which can be a precursor to esophageal cancer.
Endoscopic examinations with multiple tissue biopsies to look for
dysplasia and cancer have long been considered the standard
surveillance procedure for BE patients. However, current
data suggests that an esophageal "brushing" may be more effective
than a traditional tissue biopsy, because it allows for the
collection of cells from a larger area of the esophagus for
testing, which results in less sampling error. Esophageal
brushings are also generally easier and less costly to obtain
than tissue biopsies.
NeoGenomics' NeoSITE BE FISH test was designed specifically to
be performed on brushing samples and can be used as an objective
and easier means to aid in routine surveillance of BE patients.
The Company performed an extensive trial to validate this
new test in which the test showed initial sensitivity of 86% and
specificity of 67% when the Company's proprietary algorithms were
used to assist with interpreting the FISH results. Reported
sensitivity and specificity levels were even higher when brushing
samples were obtained from nodules rather than pan-brushing.
With the commercial launch of NeoSITE, NeoGenomics becomes the
first lab in the US to offer this important FISH test on a
national basis. The new test will further grow its top line in
the coming quarters.
There is Further Room for Share Price Appreciation
2012 has been a banner year for NeoGenomics (NEO). The
Company's shares reached all-time high on September 25 at $3.20
per share. Currently, NEO shares are trading at about $2.88 per
share. The Company's share price has more than doubled since we
initiated our coverage on October 7, 2011 at $1.06 per share, an
appreciation of 172%.
We think the momentum will continue in the coming quarters and
share price could appreciate further in 2013. Our optimism is
based on the fact that the Company has achieved strong financial
performance in fiscal year 2012 and that continued success is
widely expected for 2013 and beyond.
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NEOGENOMICS INC (NEO): Free Stock Analysis
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