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Company Overview Presentation June 2015 “Improving Patient Care through exceptional cancer genetic testing services!” Time Matters. Results Count!

NeoGenomics Company Overview for June 2015

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Page 1: NeoGenomics Company Overview for June 2015

Company Overview Presentation June 2015

“Improving Patient Care through exceptional cancer genetic testing services!”

Time Matters. Results Count!

Page 2: NeoGenomics Company Overview for June 2015

Forward-looking Statements

This presentation contains statements which constitute forward-looking statements within the meaning of Section 27A of the Securities Act, as amended; Section 21E of the Securities Exchange Act of 1934; and the Private Securities Litigation Reform Act of 1995. The words “may”, “would”, “could”, “will”, “expect”, “estimate”, “anticipate”, “believe”, “intend”, “plan”, “goal”, and similar expressions and variations thereof are intended to specifically identify forward-looking statements. All statements that are not statements of historical fact are forward-looking statements.

Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. The risks that might cause such differences are identified in our filings with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise the forward looking statements made in this presentation to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events.

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Page 3: NeoGenomics Company Overview for June 2015

Investment Highlights

Fast growing cancer genetics lab servicing Oncologists, Pathologists and Hospitals

Strategic client partnerships created

by “Tech-Only” model

Dynamic, rapidly- growing and consolidating industry

Industry-leading revenue & test volume

growth

Strong productivity and operating leverage leading to accelerating cash flow and net income

Strong Management Team with large cap

lab experience

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Page 4: NeoGenomics Company Overview for June 2015

Experienced Management Team

• Douglas VanOort, Chairman & CEO Chief Operating Officer, Quest Diagnostics Executive Vice President, Corning Life Sciences, Inc.

• Maher Albitar, M.D., Chief Medical Officer & Director of R&D Med. Dir. for Hematopathology & Oncology and Chief of R&D, Quest Nichols Institute; Director of Leukemia and Molecular Laboratory, MD Anderson Cancer Center

• Robert Shovlin, Chief Operating Officer Chief Development Officer, Bostwick Laboratories President & Chief Executive Officer, Aureon Biosciences

• Steven Jones, Director, EVP – Finance, & Chief Compliance Officer Chairman, Aspen Capital Group; Managing Member, Medical Venture Partners Vice President, Merrill Lynch Investment Banking

• George Cardoza, Chief Financial Officer CFO, Protocol Global Solutions; Controller, Central Region, Quest Diagnostics

• Robert Horel, Vice President & General Manager, PathLogic Regional Mgr., US Labs; Product Specialist, Ventana Medical Systems; Pilot, U.S. Navy

• Steven Ross, Chief Information Officer Vice President Technology, Chico’s FAS, Inc.

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Page 5: NeoGenomics Company Overview for June 2015

Company Overview

• Specialized oncology reference laboratory providing the latest testing technologies, global/tech-only options, and interactive education to the pathology community

• Offer the complete spectrum of diagnostic services through nationwide network of laboratories

• Dedicated to providing superior service, faster turn-around times, and complete attention to the needs of our clients and their patients

• Founded and went public in 2001

• First to launch tech-only FISH services in 2006

• March 2009, Doug VanOort joined as CEO

• December 2012, up-listed to NASDAQ

• Recently completed acquisition of Path Logic based in West Sacramento, California

• 65% CAGR in Revenue and Test Volume over last ten Years.

Description Broad Menu of Genetic & Molecular Tests

History

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• 57 Custom FISH Panels

• 215 IHC Stains and Custom Panels

• 72 Molecular Markers

• 23 Targeted NeoTYPE Molecular/FISH/IHC Panels

• Full Suite of Next Generation Sequencing Panels 315 Gene Solid Tumor Discovery Panel

4,813 Gene Cancer Exome Profile

• Cytogenetics

• Flow Cytometry

Page 6: NeoGenomics Company Overview for June 2015

1,152 4,082 12,838

20,998

32,539

45,675

57,332

76,288

114,606

137,317

177,279

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

$558 $1,885

$6,476

$11,505

$20,015

$29,469

$34,371

$43,484

$59,866

$66,467

$82,194

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Proven Track Record of Consistent Growth

Base NEO* Annual Revenue Base NEO* Tests Performed ($, 000s)

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* Base NEO represents organic revenue and test volume growth from legacy business and excludes the impacts from the PathLogic acquisition.

Page 7: NeoGenomics Company Overview for June 2015

U.S. Cancer Testing Market Size $10-12 Billion

Hematopoietic Cancers Solid Tumor Cancers

Total Testing Market: $3 - 4 Billion $7 - 8 Billion

Est. Genetic Mkt. (TAM) ~$2 - 3 Billion

~$2 - 3 Billion

Patients in Treatment: 850,000 7.0 million

New Diagnoses/Yr.: 150,000 1.45 million

Specimen Types: Bone Marrow (350K/Yr)

Per. Blood (150K/Yr) Lymph Nodes

Tiss. Biopsies (8-10MM) Fine Needle Aspirates

Other Bodily Fluids

Neo Revenue Split: ~80% ~20%

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Page 8: NeoGenomics Company Overview for June 2015

NeoGenomics’ Cancer Testing Services

Key Testing Methodologies

• Cytogenetics: chromosome analysis − “Neighborhood view of 46 houses from 1000 feet”

• Flow Cytometry & IHC: cell surface marker analysis − “Single house view from 500 feet”

• Fluorescence in-situ Hybridization (FISH): gene analysis − “Door and window view of one house”

• Molecular Testing: DNA/RNA analysis − “View of serial number on door lock”

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Page 9: NeoGenomics Company Overview for June 2015

Customer Targets

Pathologists & Hospital Pathology Groups (about 75% of 2014 Revenue ) • Enable community Pathologists to practice using sophisticated tools and tests • Innovative technical component (TC or “tech-only”) services – Flow, FISH, IHC • Outstanding Web-based Lab System & extensive training programs

Oncologists & Clinician Groups (about 22% of 2014 Revenue ) • Includes Hematologists, Oncologists, Dermatologists, Urologists • Disease Panels and comprehensive molecular menus • Increasing Opportunity to service larger practices with Tech-only model

Clinical Trials & Other (about 3% of 2014 Revenue ) • Contract research/clinical trial support work for Pharma clients

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Page 10: NeoGenomics Company Overview for June 2015

Accelerating Pace of Innovation

• 4 molecular tests • 3 FISH • FL – IHC menu

• 10-color Flow Cytometry • Implemented State-of-the-art

MolDx platform in lieu of Kits • 28 new Molecular Assays • Proprietary method for

increasing sensitivity of Sanger sequencing

• 7 NeoTYPE MolDx Panels • New Aperio Digital Image

Analysis • SVM for FISH (Patent App) • Barrett’s Esoph. FISH

(Patent App) • NeoARRAY/SNP

Cytogenetics • Internalized send-outs

• 40 new Molecular tests • Add’l NeoTYPE Panels • Next Generation

Sequencing (48 genes) • ROS1 FISH • NeoSITE Melanoma FISH • Plasma/Urine-based

Prostate Test (Patent App)

• SVM-based Cytogenetics Analysis System

• SVM-based Automated FISH Analysis System v2

• Began development of NeoLAB (Liquid Alternative to Biopsy) Prostate Cx test

2011

2012

2013

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• 60 new/rev’d Molecular tests • 24 new NeoTYPE Next

Generation Sequencing Profiles

• 26 new IHC/ISH tests • Additional NeoLAB Prostate

clinical studies • AML Extended FISH Panel • AML Favorable-Risk FISH

Panel • MDS Extended FISH Panel • Plasma Cell Myeloma Risk

Stratification FISH Panel • RET FISH • MET FISH • ALL Adult & Pediatric FISH

Panels • HER2 Breast Equivocal

FISH Panel • BRAF Translocation FISH • Chromosome 1 POC Ploidy • Launched robotic FISH/Cyto

pre-processing platform

2014

Page 11: NeoGenomics Company Overview for June 2015

Next Generation Sequencing and Liquid Biopsies Next Generation Sequencing

• 21 tumor-specific hematologic and solid tumor profiles

• 4 broad pan-tumor profiles (54 gene Myeloid Disorders Profile, 48 gene Precision Profile for Solid Tumors, 315+ gene Discovery Profile for Solid Tumors, Cancer Exome Profile

• Tech-only FISH/Flow option available for select NeoTYPE Profiles

• Comprehensive and clear reporting of key diagnostic, prognostic, therapeutic and clinical trials information relevant for informed decision making

NeoLAB (Liquid Alternative to Biopsy) Prostate Text

• Blood Plasma & Urine-based (no need for Prostate tissue)

• Designed to inform which patients with elevated PSA should be biopsied

• Pivotal validation study underway (800 - 1,000 patients)

• Commercial launch expected in 2H 2015

• Expected pricing $400 - $600/Test

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Page 12: NeoGenomics Company Overview for June 2015

A Growing Commercial & Facility Footprint

NV

OR

WA

MT

MN

NE

ND

ID

WY

OK

KS CO UT

TX

NM

SC

FL

GA AL MS

LA

AR

MO

IA

VA

NC

IN

KY

IL

MI WI

PA

WV

VT

RI

NH

AZ

OH DE MD

NY

CA

NJ

MI

MA SD

States sending specimens in 2014

ME

CT

Irvine, CA 25k sf

Nashville, TN 7k sf

Ft. Myers, FL 45k sf

Tampa, FL 5k sf

W. Sacramento, CA

17k sf

Fresno, CA 3k sf

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SD

Page 13: NeoGenomics Company Overview for June 2015

Large & Growing Clinical Trials Opportunity

• World class Molecular Oncology menu opening up numerous opportunities to directly service pharmaceutical companies.

− Leverages NEO Pathologist expertise, Lab systems, Tech-only model, comprehensive menus to further diversify into a new segment.

− Ability to expand into world-wide markets

− Potential for developing companion diagnostics

− Access to market with higher AUP

• Exclusive 5 year Agreement with Covance, with a two year renewal option.

− NEO exclusively provides professional interpretations for all AP and Histology testing ordered with new trials worldwide

− NEO exclusively provides all technical component FISH for samples tested in the U.S.

− NEO eligible to provide technical component services for all U.S. based testing that is not otherwise performed by Covance’s Lab-within-a-Lab (LWL) facility at NEO

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Page 14: NeoGenomics Company Overview for June 2015

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• On July 8, 2014, NEO announced and closed the acquisition of Path Labs, LLC dba “Path Logic” for $6 million

2013 Revenue of $9.8 million

Implied Enterprise Value/Revenue of 0.6x

Includes $150,000 in capital lease obligations

$5.85 million at closing paid with cash on hand and borrowings from its revolving credit facility with and $.60 million held in escrow

• Path Logic will operate as a wholly-owned subsidiary of NeoGenomics

Acquisition of Path Logic

Strategic Rationale Path Logic Overview

Transaction Summary

• A specialized AP laboratory serving California and the western United States

• Sub-specialties in renal pathology, dermatopathology, women’s health and gastrointestinal and genitourinary pathology

• Approximately 65 employees as of July 2014, including 9 in-house pathologists and 12 consulting pathologists

• Founded in 1999 and headquartered in West Sacramento, California

• NEO expects $3 – 4 million of revenue synergies by offering NEO tests to Path Logic customers and Path Logic tests to NEO customers

• Additional cost synergies with increased run rate and NeoGenomics experience

• Doubles pathology staff

• Expansion of geographic footprint in Northern California with West Sacramento, California laboratory

- Location to be added to NeoGenomics - Locations to be discontinued

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Page 15: NeoGenomics Company Overview for June 2015

2015 Strategic Priorities

• Next Gen Sequencing

• Develop Prostate Cancer Test

• Launch New Products

• Grow Clinical Trials

• Optimize Covance partnership

• Higher Productivity

• Lower Costs

• Become a “Digital Lab”

• Expand Sales Team

• Add new clients

• Improve Informatics

Growth Get LEAN

Innovate Diversify

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Page 16: NeoGenomics Company Overview for June 2015

Revenue, Test Volume & Avg Rev/Test – Base NEO*

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* For comparison purposes Base NEO exclude the impacts from the Path Logic Acquisition, which was completed on 7/8/14.

9.1% 8.7%

12.2%

4.9%

-7.0%

-5.0%

-8.4% -7.3%

-4.1%

215%

64%

55%

40%

26%

33%

50%

20%

29%

243%

78% 74%

47%

17% 27%

38%

11% 24%

-20%

0%

20%

0%

50%

100%

150%

200%

250%20

06

2007

2008

2009

2010

2011

2012

2013

2014

Change in Avg Rev/Test Test Volume Growth Revenue Growth

Test

Vol

ume

and

Rev

enue

Gro

wth

Cha

nge

in A

vg R

ev/T

est

Page 17: NeoGenomics Company Overview for June 2015

35% Reduction in Operating Costs per Test Over the Last 5 years!

Cost Management & Operating Leverage – Base NEO*

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* For comparison purposes Base NEO exclude the impacts from the Path Logic Acquisition, which was completed on 7/8/14.

$683 $651

$575

$512

$461 $446

0% -2%

5%

10%

13% 12%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

$0

$100

$200

$300

$400

$500

$600

$700

$800

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Cogs Cost/Test G&A Net of R&D Cost/TestS&M Cost/Test R&D Cost/Test

Page 18: NeoGenomics Company Overview for June 2015

Accelerating Cash Flow & Earnings

($, 000's) 2012 2013 2014 Total Consolidated Revenue $ 59,867 $ 66,467 $ 87,069 % Growth 37.7% 11.0% 31.0%

Total Gross Profit 26,836 31,737 40,714 Gross Margin % 44.8% 47.7% 46.8%

SG&A Expenses 25,624 28,563 38,496 Total SG&A as a % of Rev 42.8% 43.0% 44.2%

Net Income/(Loss) $ 65 $ 2,033 $ 1,132 Diluted EPS $0.00 $0.04 $0.02

Adjusted EBITDA $ 5,997 $ 8,515 $ 9,176 % Growth 181.0% 42.0% 7.8%

Base NEO* Summary Operating Metrics % Growth in Tests Performed 50.2% 19.8% 29.1%

Avg. Revenue/Test $ 522 $ 484 $ 463 % Change -8.4% -7.3% -4.2%

Avg. Cost of Goods Sold/Test $ 288 $ 253 $ 241 % Change -8.6% -12.2% -4.7%

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Page 19: NeoGenomics Company Overview for June 2015

Consolidated Balance Sheet ($, 000's) 12/31/13 12/31/14 (1)(2) 3/31/15

ASSETS:

Cash & Cash Equivalents $ 4,834 $ 33,689 $ 31,248

Other Current Assets 22,657 25,053 26,083

Prop and Equip, Net 9,694 15,082 16,640

Other LT Assets 2,731 7,281 7,187

Total Assets $ 39,916 $ 81,106 $ 81,158

LIABILITIES & STOCK HOLDERS’ EQUITY:

Current Liabilities $ 14,323 $ 14,623 $ 13,855

Long-Term Liabilities 3,882 6,078 7,148

Total Liabilities 18,204 20,701 21,003

Stockholders’ Equity 21,711 60,405 60,155

Total Liabilities and Stockholders’ Equity $ 39,916 $ 81,106 $ 81,158

(1) On July 8, 2014, NeoGenomics acquired the equity interests of Path Logic for $6.0 MM in an all cash transaction. (2) On August 20, 2014, NeoGenomics completed the sale of 8.05 million shares of common stock at $4.60/share, which resulted in net

proceeds of $34.4 million after deducting the underwriters’ commissions and offering expenses.

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Page 20: NeoGenomics Company Overview for June 2015

Recent Share Price (5/29/15): $ 5.33

Common Shares Outstanding: 60.4 M

Fully Diluted Shares: 66.7 M

Avg. Daily Trading Volume (3 Mos.): 187,082

Current Market Cap: $321.8 M

Less Net Debt: (20.3)M

Enterprise Valuation: $301.5 M

Key Financial Information

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Page 21: NeoGenomics Company Overview for June 2015

NeoGenomics Summary

• Emerging leader in fastest-growing segment of lab testing industry

• Robust competitive advantages and product portfolio

• Strong Management Team with outstanding industry experience

• Accelerating profitability driven by growth and operating leverage

• Fragmented industry undergoing consolidation likely to present additional strategic opportunities

• Recent Guidance(1): FY 2015

Revenue ($, MMs) $103 - 108

(1) Guidance incorporates an estimated $6-8 million reduction in revenue from the pricing of the new FISH CPT Codes by all Payers.

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