NeoGenomics, Inc.
Q4 2020 Earnings Call Transcript

Published: 24 Feb 2021

[Operator:]

Good morning, ladies and gentlemen. And welcome to the NeoGenomics Quarter Four and Full Year 2020 Earnings Call. At this time, all participants have been placed on a listen-only mode and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host Doug VanOort, Chairman and CEO of NeoGenomics. Sir, the floor is yours.

[Doug VanOort:]

Well, thank you, Paul. Good morning. I’d like to welcome everyone to NeoGenomics fourth quarter 2020 conference call. Joining me for this call are number of management team members from our Fort Myers headquarters including Kathryn McKenzie, our Chief Financial Officer; Rob Shovlin, President of our Clinical Services Division; Bill Bonello, President of our Informatics Division; Doug Brown, our Chief Strategy and Corporate Development Officer; and Charlie Eidson, our Manager of Investor Relations. Joining on the call via phone from California is Dr. Larry Weiss, our Chief Medical Officer and Director of R&D and George Cardoza, President of our Pharma Services Division. Also joining us this morning is Lynn Tetrault, who is serving as our Lead Independent Director of our Board of Directors. Lynn and I were members of our Board's Special CEO Succession Search Committee, and she is available to help address questions about CEO succession. Before we begin our prepared remarks, Charlie will read the standard language about forward-looking statements.

[Charlie Eidson:]

This conference call may contain forward-looking statements, which represent our current expectations and beliefs about our operations, performance, financial condition and growth opportunities. Any statements made on this call that are not statements of historical fact are forward-looking statements. These statements by their nature involve substantial risks and uncertainties certain of which are beyond our control. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual outcomes and results could differ materially from those indicated in the forward-looking statements. Any forward-looking statement speaks only as of today and we undertake no obligation to update any such statements to reflect events or circumstances after today. Before I turn the call back to Doug, I want to let everyone know that we will be making a copy of our prepared remarks for this morning’s call available on the Investor Relations section of our website shortly after the call has completed. We also want to let everyone know that we are going to limit the number of questions to two per person in order to give more people a chance to ask questions within the one hour that has been allotted for this call.

[Doug VanOort:]

Thank you, Charlie. For today's call, I'll briefly review some quarter four and full-year 2020 highlights. Kathryn McKenzie will provide a more detailed review of the financial results. And I'll then share our current thinking about opportunities in 2021. I'll conclude by commenting on this morning's other exciting announcement about our CEO succession plan. We'll then have time for questions and answers.

[Kathryn McKenzie:]

Thank you, Doug. As Doug highlighted, overall revenue grew 18% year-over-year to $126 million. Importantly, our core oncology revenues increased 10% year-over-year driven by strong growth and NGS, Pharma Services and Informatics. COVID-19 PCR testing contributed $9 million of revenue down from $17 million in Quarter three. Clinical Division revenue excluding COVID-19 testing return to growth with a 5% increase over 2019. Clinical Division revenue per test of $369 was nearly flat from $370 in the fourth quarter of 2019 and is up 3% sequentially from last quarter.

[Doug VanOort:]

Thank you, Kathryn. As we look ahead, we remain highly confident in the strength of our core oncology business and long-term growth opportunities. In fact, we are more confident than ever before. Post-pandemic, we believe that growth in our core business will recover steadily back to our longer term clinical volume growth targets of mid-teens. We believe our Pharma segment growth will exceed our previous long-term 20% revenue growth target. There is however significant uncertainty about the short-term and the pace of recovery from this pandemic. Because of the unpredictable pace of the oncology markets return to full recovery, we have decided not to reinstate formal 2021 financial guidance yet. We will resume formal guidance when we feel comfortable that the uncertainties surrounding the pandemic will allow us to guide more confidently. Notwithstanding that short-term uncertainty, we anticipate that Quarter one will generate mid-single digit revenue growth in our Clinical and Pharma businesses. For the first few weeks of this quarter, Clinical test volume was flat compared with the prior year. But last week's severe weather caused significant disruptions in test shipments to our labs. We expect our Pharma Services segment to continue to be strong with Quarter one year-over -year growth exceeding our 20% long-term revenue goal. We expect daily volumes in our Clinical business to improve every month now as we exit the pandemic. With vaccinations on the rise and daily COVID cases on the decline, we are anticipating that oncology testing volumes will track and maybe exceed historical growth rates in the second half of 2021. Our business development professionals in Clinical, Pharma and Informatics are very excited to be able to visit with their customers again and work on their pipeline of new potential accounts. I must say that our management team is quite excited about that environment and we are actively preparing for it. I'll share some of our 2021 initiatives that will position NeoGenomics not only for volume recovery but also for strategic leadership in the oncology market. Our leadership team has been planning and positioning the company to take full advantage of our opportunities in a post-pandemic environment. These first several weeks of 2021 have been as busy as I can recall. In early January, we executed a public financing in the equity and convertible debt markets. Both transactions were oversubscribed and the outcome was quite successful as we raised over $500 million in net proceeds. This capital raise allows us to be more competitive in terms of our position as we assess M&A opportunities in the oncology market that we'll be able to advance our strategic priorities. In addition, we announced a strategic collaboration in precision medicine with Parexel and our Informatics Division and we believe there are many other future opportunities like this one out there. As many of you are aware, the M&A market is very active. In the first two months of 2021 alone there have been several transactions. Other opportunities may also be available. We have a long history of M&A success with Clarient, Genoptix and recently with the La Jolla Oncology business of Human Longevity. We want to build on that success in 2021. Many of you are aware that we have an option to purchase Inivata, a company with novel technology that is developing a minimal residual disease or MRD test that is shown to be highly sensitive. While no decisions have been made, that partnership is progressing very nicely and we are very encouraged by our diligence on the radar assay for minimal residual disease. We're also investing in areas that we’ll build on our foundation and support sustainable organic growth rates as well as inorganic strategic growth. We have established our goals and objectives for 2021 and aligned our processes and incentive plans, as we've done now for over a decade. This year, in addition to a focus on world class culture, we'll be working hard on further differentiating the NeoGenomics based on strong service levels. Our net promoter score is high and our customer retention rates are very strong but we want to make them even better. Turnaround time is important for patients and clients. NeoGenomics has traditionally had industry-leading turnaround times. Whether its liquid circulating tumor DNA or tissue based testing, we want to make sure that we are the best in the industry. We're also moving faster on innovation. We recently introduced a world class RNA Fusion assay, and are working on a number of very advanced NGS panels and rapid tests. We believe these offerings will have the capability to save lives by informing precision therapy selection and monitoring residual disease so that it can be treated earlier. 2021 will be an exciting year for NeoGenomics. And that leads me to the next topic

[Charlie Eidson:]

At this point, we would like to open up the call for questions. Incidentally, if you are listening to this conference call via webcast only, if you'd like to submit a question, please feel free to email us at [e-mail] during the Q&A session and we will address your questions at the end if the subject matter hasn't already been addressed by our calling list. As mentioned at the beginning of the call, we would like to ask each person to limit their number of questions to two, so that we may hear from everyone and still keep within the one hour allotted for this call. Operator, you may now open up the call for question.

[Operator:]

Thank you. And the first question is coming from David Westenberg. David, your line is live. Please note your affiliation and pose your question.

[David Westenberg:]

Hi, thank you for taking the question. I want to start-off with radar you kind of mentioned. I'm not sure exactly what you can say on that but the space is getting pretty attractive with some CRC products. So, I was just wondering if you can give us some timelines in terms of launch and what you think about in terms of reimbursement. And then if you know maybe you can't talk about product specific if you could talk about maybe some of the market dynamics. Do you see this quickly transitioning from CRC to other kinds of cancers? Thank you. And I have a couple of follow-ups?

[Doug VanOort:]

Well thank you, David. Thanks for the question. As you know, radar is a assay in development by our strategic partner Inivata and they are in charge of and doing a great job developing that assay. We also believe that minimal residual disease which radar is intended for is a very attractive space for us and very encouraging for patients really around the world. I think Inivata is currently planning to continue development of the product as we go through this year. And what they would like to do is to apply for MolDX reimbursement at some point in the near future probably later this year. But as I said, they're in-charge of the development process. In terms of the market dynamics, we believe this is a terrific market. We believe that the radar assay is the most sensitive assay that we are aware of that's being developed. And there are a number of tumor types that a minimal residual disease product like Inivata's would target including potentially breast, lung, colon and a variety of other solid tumors. So, this is very encouraging for us. We're optimistic about our relationship with Inivata and about the radar assay.

[David Westenberg:]

Great. Thank you very much. I'm going to go back to that commentary you gave in terms of regional dynamics. I think you said X Northeast and X West Coast and I think you said 10% dynamics. Could you give a little bit of more indication on terms of what that 10% might represent, if it maybe did represent some pent-up demand? I'm just trying to get a feel for as the economy reopens in the other parts of the region's if it might look like that and if there wasn't in fact pent-up demand there and you have a lot of analysts? So I'll hop back in the queue after that.

[Doug VanOort:]

Okay. Thank you, David. Well, the observation that we made about 10% of volume growth in the month of January in regions that were less restrictive in terms of COVID restrictions was actually a little bit surprising to us. And there's a big difference between the areas of the country that are more-or-less restrictive and the correlation to our volume growth. It's hard for us to pinpoint exactly how much of that might be pent-up demand and how much might be just a freeing up of the markets. But that was our experience. And we're hopeful that that bodes well for our Clinical Division volume growth as we continue to see COVID cases decline as the year unfolds.

[David Westenberg:]

Thank you very much, and congrats on retirement.

[Doug VanOort:]

Thank you, David.

[Operator:]

Thank you. And the next question is coming from Alex Nowak. Alex your line is live. Please mention affiliation and pose your question.

[Alex Nowak:]

Great. Good morning, everyone. This is Alex from Craig-Hallum. Congrats on the transitions everyone. Enjoyed working with you Doug, welcome to the Neo team, Mark. Maybe actually on the transition to start, Doug you and your team you've built up obviously a very impressive lab in the space. Perhaps walk through just how you and the Board were looking about bringing someone in with prior Pharma experience versus pulled straight from another diagnostic lab. What sort of new expertise does this bring to Neo? And I guess, how does it signal or what does it signal about the future path for the company?

[Doug VanOort:]

Well, thank you for the question, Alex. There were a number of different variables that we looked at in our selection of our next CEO. I mentioned some in the script, obviously culture is very important to us, history of operational experience and strategic experience, healthcare experience. But in terms of Mark's special skills and experiences, we're very encouraged that he has a lot of deep experience with AstraZeneca. AstraZeneca, as you know is one not only of the leading Pharma companies but also a leading oncology company. And so he has a lot of experience in oncology. And what -- we've talked about in the past, our Pharma Division, our Informatics Division things like next generation sequencing minimal residual disease. These are the kinds of products that are going to drive outsized growth for us in the future. And I think, Mark with his experience and strategic abilities is very nicely positioned to help us undertake those opportunities. Now, Alex, we also have Lynn Tetrault is here who as I mentioned is our Lead Independent Director. And Lynn joined me on the Search Committee and she may have some other comments about Mark.

[Lynn Tetrault:]

Thanks, Doug. And Alex thanks for the question. I think what I'd start-off saying is, I have had the privilege of knowing Mark for 22 years and work with him for 15 years at AstraZeneca. So, I have no real experience of what he's capable of delivering. And I think the Board's intention is continuing to follow the strategy that we've been on to drive strategic growth and innovation, ensure excellent operational delivery and financial performance and continue to build the unique culture that makes the company that it is. And I am really confident and I know the entire Board is confident in what Mark will bring to that. I've seen firsthand what a tremendous leader he is. He is an incredibly bright, strategically strong individual with a great track record and he'll be a terrific fit to the culture. I think his experience in Pharma will bring a broad perspective to Neo that will be helpful and his global leadership experience. I think will also be a tremendous advantage for the company. But, I think the Board is excited about the opportunities and continuing to follow the strategy that we have done so to-date.

[Alex Nowak:]

That's great, I appreciate that. And maybe to build on the Informatics piece, there's obviously a large lab out there using Informatics as its primary pitch in diagnostics. But can you expand more and give some specifics about the capabilities you want to build out in the Informatics unit that could be unique to Neo? And should we think about the Informatics unit as being a standalone business unit generating its own revenue and generating its own gross profit dollars or is it going to be more of a loss later? And I don't mean that a negative term but a loss later to bring in more oncologists to Neo; help out with your market share; help out with tests; or just help out with the Pharma business?

[Doug VanOort:]

Well, I'm going to turn that over to Bill in a second. But I want to say that we're so excited about Informatics for a couple reasons. It is an independent revenue grower for us and I think might be profitable for us as we go forward. But it also is benefiting our Pharma Division and our Clinical Division. So, it very much is synergistic with the rest of NeoGenomics. But we're excited about the products that we're building here. And Bill do you want to give a little color there?

[Bill Bonello:]

Sure, absolutely. So at the core, Alex, we're building out tools for precision medicine, tools that will help ensure that patients get the right therapies and they get access to clinical trials. The primary customer for most of those services at least as today is the Pharma Services industry. And we're working with them on a number of different projects involving some of them are involving clinical trials anywhere from the trial design to the site selection to the actual screening of patients to follow up with patients or their providers. Some of them involve commercial launches and understanding the market dynamics and trends and diagnostic testing that might impact access to a particular therapy. Some of them are at a broader sort of investigational level where they're using data to sort of formulate future plans either commercially or from a drug development standpoint. A lot of the work that we're doing with them today is basically being done sort of the tough way but in the background we're building automated tools that will allow Pharma to build cohorts and place information more broadly throughout the oncology ecosystem. So, that's basically what we're developing. We're absolutely generating revenue. And I for one will be extremely disappointed if we're not generating good profit down the road.

[Alex Nowak:]

Okay, very helpful. Thank you.

[Operator:]

Thank you. And the next question is coming from Mark Massaro. Mark your line is live. Please note your affiliation and pose your question.

[Mark Massaro:]

Hey guys, thanks for taking the questions. I guess Doug, congrats on a really strong tenure at NeoGenomics as CEO. I guess can you share why you think now is sort of the right time for you to step down in the CEO role and moved to Executive Chair?

[Doug VanOort:]

Well, good morning Mark. I think it is the right time. The company is stronger than it's ever been before. We have a very good strategy. I think the company is very well-positioned for the future. And it's a really a great time to bring in a new experienced leader to take the company to the next higher level of performance. We have it's a really tremendous opportunities ahead. And I think it's a great time for a new person to come in and pursue those. In my case, I think it's I decided that it's better to retire when things are in a good shape so that we can be thoughtful about transitioning a new CEO. And I think that's the best thing for the company.

[Mark Massaro:]

Yes, understood. So, I have another question and it's related to your commentary around how COVID testing is certainly shifting to the point-of-care. I guess how long do you expect to offer COVID testing and then related to that your gross margins were down year-over-year. I guess at least qualitatively, do you expect gross margins to go up in 2021 and to what extent would maybe shifting away from COVID help?

[Doug VanOort:]

Well, our strategy Mark for COVID testing was always to be an overflow lab. We never wanted to make this our primary business. We were doing this relatively altruistically it did happen to buffer some of the decline that we had in our core oncology business. But at this point, we did have a fair amount of volume and COVID testing in Quarter three that declined by about half in Quarter four. Our COVID testing in Quarter four actually occurred sort of as the resurgence occurred. And so now as the resurgence has declined, as COVID cases have declined, you can imagine what has happened to our COVID testing business. And I think if we don't see a future for us in COVID testing as the next month or so unfolds, then we probably will not be in that business. In terms of gross margins, so Kathryn may want to weigh in here. I would just say that COVID testing helped our EBITDA margins not necessarily our gross margins. But as COVID testing for us declines, we would expect that our -- there would be an EBITDA impact for us going forward.

[Kathryn McKenzie:]

Yes. And from a gross margin perspective, Mark. Just thinking about qualitatively, we're continuing to assess areas for improvement in gross margin on our core business. But keeping in mind the investments and the additional capacity we do have in Pharma and the pressure we have and are experiencing continued on the pandemic volumes in Q1. As we get through the rest of the year, absolutely there's room for continued improvement over prior year.

[Mark Massaro:]

Okay, thank you.

[Operator:]

Thank you. And the next question is coming from Tejas Savant. Tejas, your line is live. Please note your affiliation and pose your question.

[Tejas Savant:]

Hey, guys, thanks for the time this morning. Doug, first of all, congratulations on the next stage your as Executive Chairman. It was a pleasure working with you. In terms of just the 1Q guide here, are you essentially assuming sort of a low-single digit million contribution from COVID testing? And is it fair to think that that goes to zero starting in 2Q just given your comments here around excess capacity in the field?

[Doug Brown:]

Hi, it’s Doug Brown here. I think it's fair to say that, as Doug said, the pandemic subsiding has had an impact on the PCR testing. As the quarter evolves, you can envision that continue to go down and as Doug mentioned that when we think about the rest of the year we're hopeful that we're not in that business. So, I think you may get some reasonable assumptions that pay off.

[Tejas Savant:]

Okay, good. That's helpful. And then on the liquid biopsy launch, I mean anything you can share in terms of color, it's relatively recent year but I know you launched a mobile phlebotomy offering back in November, has that helped in terms of just getting the word out and getting volumes to ramp here as you launch the other two assays there?

[Doug VanOort:]

Yes Tejas, and then just so everyone knows, we have two liquid biopsy products. The Inivata, InVisionFirst-Lung test, and our own enhanced cancer test. We have had uptake and we have had a very good feedback from our clients about both of those tests. And we have -- it's been a little difficult due to that the market then since our sales folks are unable to readily get into oncology offices. So, that clearly has impacted things. But we have had some uptake and we have improved our service offering. We've offered now and just launched mobile phlebotomy, we've made some significant changes to our reporting for liquid biopsy. And we've done a number of other things which we think are going to improve the offering. And as our folks get out there in the field, we have very high hopes for further penetration. The market where we play in the community is really under penetrated in terms of liquid biopsy and as you know in the community setting probably 80% or more of cancer care occurs. So, we think we've got a lot of room for growth.

[Tejas Savant:]

Got it? And then one final one for me on capital deployment. Doug, I thought the comments you made on sort of more opportunities here on the M&A front and your plans to kind of like pursue those year-end '21. Can you highlight what would be sort of the beyond Inivata what would be the two or three adjacencies where you think it would make a lot more sense to buy rather than build and whether it's sort of very interesting assets out there.

[Doug Brown:]

Hey, Tejas. It’s Doug Brown again. I would say, as the narrative we've had for the last year is we're really focused on Pharma, Informatics and NGS, whether it's tissue or liquid. If you look back in the last thing we did strategically the purchase put us in a whole exome sequencing business on the Pharma side. We continue to think about both scene areas in Pharma and Informatics and high growth areas. So, that's the focus.

[Tejas Savant:]

Got it. Super helpful, thanks guys.

[Doug VanOort:]

Thank you.

[Operator:]

Thank you. And the next question is coming from a Puneet Souda. Puneet your line is live.

[Unidentified Analyst:]

Hey, guys, this is actually Westley Dupray for Puneet this morning. I want to extend our team's congratulations to Doug as well. It's been a fun few years for me. I was hoping to just dig in a bit more onto the NGS side of the business in the quarter. 23%, that's a really strong quarter. I am wondering if you could just talk about the impact of the liquid biopsy launch there, what your expectations are moving forward. I mean, obviously we have some easier comps I think coming up over the next few quarters and then what impact we can expect us to have on the revenue and cost per test.

[Doug VanOort:]

Well Hi Westley, thank you for the comments and for the question. Yes, our next generation sequencing product line is continuing to grow nicely. We've made a lot of changes to it, we're continuing to make changes to it. We're investing a fair amount in next generation sequencing. And by the way, our new Fort Myers laboratory is going to have a brand new next generation sequencing lab which we think will improve service. As we have, we will have then East Coast and West Coast capabilities. So, we're really investing in next generation sequencing. And the RNA fusion that Dr. Weiss in the R&D team just recently launched is I think a testament that our continued investment in assay development as well as in facilities and infrastructure. The liquid biopsy launch as I just mentioned, I think is going well. And we think it's going to gain traction sequentially as the year unfolds. So, next generation sequencing has been a high growth area for us. We think it will continue to be a high growth area for us. And it also Doug Brown just mentioned our whole exome sequencing line in Pharma. We think that that will continue to gain traction for us as well. So, we're pretty bullish on our NGS portfolio.

[Lynn Tetrault:]

And in Pharma and AUP and our cost per test perspective, NGS thus carry a higher revenue per test but your various treatment in that also carries a higher cost per test. Then we're looking at the overall margin contribution; those will offset a bit as well even though NGS is growing faster than our other modalities. They are all growing. So just as a reminder, the impact on overall AUP increase that that revenue per test increase, it will take some time to be realized and a significantly higher AUP because all of our modalities are growing.

[Unidentified Analyst:]

Great, thank you. And then just on Pharma. Really, seem to weather the storm throughout the year really strong growth in the second half of the year? I guess just how can we think about it moving forward. I mean, backlog is continuing to grow really nicely here. I think you mentioned about 16% of the core business. And that's probably accelerating. But just trying to get there -- trying to think about backlog conversion. I mean -- I know you mentioned more than 20% growth in the first quarter. But I mean, if you comparing the first quarter of last year to the fourth quarter, we're at a much higher run rate. So, just looking for any color on how we can expect Pharma to perform moving forward. Thank you.

[Doug VanOort:]

Yes, we're very excited about the Pharma business with a long-term growth opportunities there. I will say Wes that the pandemic has impacted our Pharma business and really continues to impact the Pharma business somewhat. And there is some seasonality to the Pharma business also. Quarter one traditionally has been a little bit lower but our backlog I think we ended the year at $209 million of combined backlog for Informatics and for Pharma. And that is converting. I mean, George Cardoza is on the line and may want might -- want to make a couple of comments about the backlog conversion. But our sales team in Pharma is doing a great job. We added a lot of new contracts, the demand is very strong. And as I said, I think our revenue growth in the next year or two should exceed our previous long-term revenue growth targets of 20%. George, do you want to make a comment about the backlog conversion?

[George Cardoza:]

Yes Doug, no absolutely. I mean, I hope you see in the 43% year-on-year growth, that obviously it is starting to convert certainly. So, and I think if you look at the back half of the year, you see 30% growth. So, that's back more in line and we have 38% growth in 2019. So, I think is sort of the pandemic lifts we're hopeful certainly that we can get back to high growth rates. But certainly and the pandemic is still having an impact on enrollees and clinical trials. We're seeing the research side be pretty strong. And certainly Informatics has been very strong but there is still a little bit of a drag out there on the enrollee side and in some of these trials. The trials are active but we are still hearing some frustration that they're not quite getting the enrollee counts that people would like or people anticipated so. So, still a little bit of a COVID headwind but I think when that lifts we're very optimistic about the especially the second half of 2021.

[Unidentified Analyst:]

Great, thank you.

[George Cardoza:]

Thank you.

[Operator:]

Thank you. And the next question is coming from a Jacob Johnson. Jacob your line is live. Please announce your affiliation and pose your question.

[Unidentified Analyst:]

Hey, guys, this is Mason on for Jacob. Just a few quick ones from me. First on Inivata, a lot of excitement around liquid biopsy. I think investors are interested in better understanding the timeline here. So, how should we think about the timing of you potentially buying the company and what are the key things you need to see to make a decision?

[Doug VanOort:]

Well, we have a great relationship with Inivata. We have a seat on Inivata Board of Directors and we have a terrific relationship between our commercial folks and our operating folks in the Clinical Division and the Pharma Division and Inivata. So right now, the InVisionFirst assay is being commercialized by us. And we have a pretty good insight as to that uptake and how that is progressing. We would like to work with Inivata on the MRD assay development and understand better how that is progressing. We believe that it's progressing very nicely. But the MRD assay is frankly more interesting to us than the InVisionFirst-Lung assay. So, our decision in terms of acquiring that company and exercising our option will be largely dependent on the progress with the assay development for minimal residual disease.

[Unidentified Analyst:]

Got it. And then maybe one just big picture question. As we look at a couple years, how should we think about your mix of revenues? How large could Pharma Services and Informatics be compared to your legacy Clinical Services business and how much of Clinical Services could we expect to come from liquid biopsy?

[Doug VanOort:]

Well, I would say that we've tried to give some hint as to how we think about that. And I will maybe answer that question in two different ways. So, one is organically and then the other is inorganically. So organically, we would expect the combination of Pharma and Informatics to grow at at least twice the rate of our Clinical Division. And I think we have good evidence for that. It's actually occurred in the last year and you could see that in the numbers. And we've invested very heavily in both areas which is why you see some pressure on gross margins and other margins as we put infrastructure in place. In addition to that though, when you can do the math I think Mason we would also want to think a lot about strategic investments mergers and acquisitions to fuel the growth in Pharma and Informatics. And I think that we're working on those as we speak and I think it's possible that we could sort of rocket boost the growth rates there. And we would like to have a combination of Pharma and Informatics be at least a third of the revenue in a few years.

[Unidentified Analyst:]

Got it. Thanks for taking the questions.

[Operator:]

Thank you. And the next question is coming from Brian Weinstein. Brian, your line is live. Please announce your affiliation and pose your question.

[Brian Weinstein:]

Hi guys, good morning. Doug congrats on the transition. I'm not sure where people in Florida retired to because people in Chicago go down there. So for a few months a year where it's actually nice to come visit us and in June, July or something like that. So, a question on Pharma Services here. I'm curious, a series of questions here on this. I'm curious how competitive these mandates have become a lot of investments being made by you guys and others there. So, can you talk about how competitive this is becoming really what are the dynamics that determine winning or losing with these things and how that's changing? And then I'm also curious about the deals that you've been signing more recently. Can you talk about these in terms of the depth of relationship here? Are you going deeper with kind of existing partners or you bring new partners into the mix? Thanks.

[Doug VanOort:]

Thank you, Brian. And I will miss your sense of humor. In terms of Pharma Services, I'll maybe take a crack at this and George I think can weigh in. We have a fairly broad list of the major pharmaceutical companies in oncology who are working on oncology drug development. It's a very broad list. And we are both broadening the list of clients and deepening it. So, one of the aspects of the business that we have developed is a comprehensive menu not only for Clinical but also for Pharma. So, we offer a lot of different test modalities for Pharma. And that allows us once we've established a reputation, they understand our service levels and our commitments to have an opportunity to participate in other kinds of test modalities and other trials and research that pharma companies are engaged in. So, I would say it's both. We're broadening the client list and deepening the client list. And I think there's a lot of room for both going forward. George, do you want to make any other comments about that?

[George Cardoza:]

Yes, no absolutely. I do think and in 2020 what you heard earlier, our sales team did have some challenges. Certainly typically they go to trade shows, they meet people. So, they're doing everything via zoom and WebEx. But they have been able to certainly be successful deepening a lot of our relationships. And I think that's the nice part is we have a very broad list of customers. So, there are a lot of opportunities for them to get greater share in these accounts. And I think we did a really good job of that in 2020 and we have brought in some new customers as well. I mean, our team has been working extremely hard. But hopefully, if things get back to normal, we can travel a bit more. You'll see maybe a little bit more push to the sort of new logos coming into the portfolio. But I do think in 2020, we were able to deepen some relationships and I do you think that's what enabled our growth especially in the second half.

[Brian Weinstein:]

Great. And then you talked Doug about differentiation on service with some investments that we want to make their focus specifically on turnaround time. Is that simply just having labs on both sides of the country or are there other investments that you're making there. And then you also mentioned some supply chain issues impacting this in the short-term? Is that all COVID related and is that all now behind you? Thanks, guys.

[Doug VanOort:]

What's interesting, Brian, the supply chain disruptions and how they have occurred in our business? Originally, there were things like gloves and thigh pads and extraction kits and a whole number of other things and the downstream disruption it's been challenging frankly, I mean even in terms of logistics with some of our logistics carriers. So, there has been disruption and we're looking to operate in a much more stable kind of environment going forward. Now, I think I mentioned in a number of times our net promoter score and customer survey activity, we are pretty rigorous about surveying customers a couple of times a year. And we don't just get one survey score. I mean we get a lot of rich data. And Rob Shovlin and our whole Clinical team and our Pharma team also pour through these data. And we try to analyze what we can do better along a variety of different kinds of attributes. And so, turnaround time has always been an important attribute and probably perhaps the most important but there are a lot of others too. So, we're continuing to work on fundamental changes in some of our laboratories to reduce turnaround time but we're working on a number of other service differentiators. And that's a continual process for us, it’s part of our really quality system of continuous improvement.

[Brian Weinstein:]

Great. Thank you.

[Operator:]

Thank you. And the next question is coming from Ivy Ma. Ivy your line is live. Please announce your affiliation and pose your question.

[Ivy Ma:]

Hi, this is Ivy from BoA. Thank you, for taking the question. Congrats on your retirement, Doug. I just wanted to follow-up on capital deployment and appreciate all the details so far with the likely strategic focus on Pharma and Informatics. Can you expand on how does the succession plan change your M&A plans if any and if there's any change to the strategy in either in terms of financial metrics or geographic region? Thank you.

[Doug VanOort:]

Well thank you Ivy, and thanks -- congratulations. I'll make a couple of comments and then maybe turn it over to Doug Brown. First of all, we've talked a lot with Mark Mallon about our strategy. We have a pretty rigorous process to define our goals and objectives for each coming year. And we have that as well for 2021. And Mark embraces the goals and objectives that we currently have in place and both operationally and strategically and I think that Mark is going to add a lot to the execution of our goals and our strategies. But at this point we don't think our goals and strategies are changing at all. I mean, obviously our goals and strategies we put them down on paper and we have a lot of dialogue about them and then we change them as circumstances change. And so, that will continue. But right now our goals and our strategies are in place and Mark embraces those.

[Doug Brown:]

Hi, Ivy its Doug Brown. So, I would echo what Doug says and also when you think about his comments about leaving the company in a position of strength. So, you think about operationally and culturally and also strategically. Now, certainly Mark Mallon is going to put his fingerprints on the company and he brings a new dimension. But when I think about what he brings, I get most excited about Pharma and a product mentality. So, you're seeing this convergent of service and product in our sector. And he's bringing something global. He's launched products, you think about the MRD assay and where this company can go and also Pharma Services. So, inorganically we're trying to drive that mix but Mark can really help organically as well. So, I think it's more of the same but he's also going to act in that strategy.

[Operator:]

Thank you. And we will now hand the call back to Doug for any closing remarks.

[Doug VanOort:]

Okay. Thank you very much, Paul. And as we end this call, I would like to recognize the approximately 1,714 NeoGenomics team members around the world for their dedication and commitment to building a world class oncology diagnostics company. And on behalf of our NeoGenomics team, I want to thank you for your time joining us this morning. Those of you listening that are investors or are considering an investment in our company, we thank you for your interest in NeoGenomics. Thank you.

[Operator:]

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you, for your participation.