NeoGenomics keeps powder dry

NeoGenomics has money to spend.

In August last year, the Fort Myers-based cancer-testing lab raised $34 million in a secondary offering of stock. Among the uses for the money: acquisitions.

But so far, the company hasn't scored. In a recent conference call with investors, NeoGenomics Chairman and CEO Douglas VanOort explained it's not for a lack of trying.

“We have submitted formal offers with three companies in the last nine months and either walked away [after] due diligence or walked away because we did not feel like we could responsibly [meet] the seller's price expectations,” VanOort says, according to a transcript of the call posted on SeekingAlpha.com.

But VanOort says he's not worried about missing opportunities. That's because the government and private insurance companies have slashed reimbursements for some cancer tests. That kind of pressure will likely force some companies to consider a sale, perhaps on more reasonable terms.

VanOort counseled patience. “We intend to maintain a disciplined approach to evaluate and execute transactions giving us the best opportunities for long-term success,” VanOort says.
“And we reiterate our belief that scale is important in our industry and our intention to make small acquisitions to maintain low cost capability and otherwise advance our strategies.”