NeoGenomics, Inc.

Our recent acquisition of Pathline, a New York State-approved lab based in New Jersey, gives us a meaningful presence in the Northeast, which is the number three cancer care market in the U.S. We believe the addition of Pathline allows us to offer significantly faster turnaround times, a larger and relevant New York State-approved test menu, and an enhanced physician experience in the Northeast region, where we have historically been underpenetrated. The integration continues to proceed according to the plan that we communicated when we announced the transaction in March, including the validation of critical turnaround time-sensitive assays, which was completed during the third quarter. We remain positive about the impact that the acquisition will have in accelerating our growth in the Northeast, and we're on track to capture operational efficiencies and synergies that we anticipate will be accretive to profitability beginning in 2026. Together with our world-class commercial team, we have deep relationships with hospitals, cancer centers, and oncologists across the country. We're winning the customer experience by enabling precision oncology in the community setting, where adoption of next-generation testing has historically lagged behind NCI-designated cancer centers. Our customers increasingly view us as the partner of choice for all of their testing needs as their patients advance along their cancer care journeys. We offer one of the broadest menus in the industry, with more than 500 tests focused solely on oncology. Our menu spans everything from diagnostics to next-generation sequencing for therapy selection to MRD for cancer recurrence and monitoring. This makes NEO an ideal partner for institutions and practices who are looking to consolidate send-down testing to simplify operational workflows and improve patient experience. The therapy selection in MRD markets represent more than $40 billion of addressable market opportunity, both of which are growing rapidly and are relatively underpenetrated. Needless to say, the ongoing investments that we make in R&D, as well as the potential BD partnerships, are focused on these areas. This is particularly true of MRD, where we think we can create significant value while introducing innovation to the cancer testing market where it's needed most, in the community setting. We also remain committed to our next-gen MRD research program, focused on generating IP that is entirely separate and distinct from our radar portfolio. Given our broad menu and strong brand recognition in the community setting, coupled with a competitive MRD test, we believe we will capture market share over time as we add additional indications to this modality. While Jeff will provide a detailed review of our financials in a moment, I'd like to hit a few highlights from our third quarter. Our clinical business continued to perform well, driven by volume and share gains in key segments. As expected, non-clinical revenue declined in the quarter due to lower revenue from pharma and biotech customers. Total revenue for Q3 was $188 million, representing double-digit growth of 12% year-over-year. Our clinical business continued its robust growth, generating revenue growth of 15%, excluding the pathline acquisitions. The clinical performance was driven by effective execution of our commercial strategy, protect, expand, and acquire. In the third quarter, we again saw a sequential improvement in AUP, a record quarter for test volumes and NGS revenue growth of 24%, well ahead of the low to mid-teens NGS market growth rate. The five NGS products launched in 2023 contributed 24% of clinical revenue in the quarter. We continue to see demand for our non-NGS modalities as well, with all modalities growing above market, which resulted in record volumes, up 10.4% versus prior year on a same-store basis. The non-clinical portion of our business accounted for less than 9% of our total revenue in the third quarter and was down from the prior year, consistent with our expectations. Turning now to our radar ST test. In August, the District Court for the Middle District of North Carolina granted our motion for summary judgment that all of Natera's asserted patent claims are invalid for claiming ineligible subject matter. The court dismissed Natera's claims against neogenomics with prejudice and entered a declaratory judgment of invalidity of both of Natera's asserted patents. The ruling paves the way for us to broadly commercialize RadarST, formerly Radar 1.1. We launched RadarST for biopharma customers in Q3, and while some of these efforts could result in bookings in Q4 of 25, the lead times necessary to obtain samples make it more likely that we'll begin recognizing revenue from biopharma customers in 2026. We have received Mold DX approval for RadarST in subsets of head and neck and breast cancer. We're preparing for a robust launch of this important assay in the clinical oncology setting in Q1 of 2026. We estimate that MRD cancer surveillance and monitoring represents a $30 billion addressable market, growing at a 30% CAGR. And with the market penetration of less than 10%, we believe we are well positioned as the cancer testing partner of choice in the community setting. to capitalize on this lucrative market and deliver a differentiated and integrated MRD solution to our oncology customers. In parallel with our Radar ST launch preparedness activities, we continue to focus our R&D investments in next-generation MRD, demonstrating our long-term commitment to the MRD space, as well as complementary targeted partnerships that allow us to fill in MRD product gaps that we don't currently address in an effort to deliver a unique, industry-leading, MRD portfolio to the market. Now turning to Pantrazor LBX, our liquid biopsy genomic profiling test that delivers comprehensive, clinically actionable insights from a simple blood draw. Pantrazor LBX is a non-invasive blood-based test that analyzes circulating tumor DNA to identify key genomic alterations that inform treatment decisions in patients with advanced stage solid tumors. Pantracer LBX, together with our Pantracer tissue test, form a comprehensive portfolio capable of delivering a holistic genomic picture of the patient in support of therapy selection. With an average turnaround time of just seven days, Pantracer LBX empowers real-time decision-making. Recall that last quarter we elected to delay the commercial launch of Pantracer LBX so that we could incorporate learnings from our evaluation assessment program to improve the product profile. In preparation for a full clinical launch, we allowed select physicians to use the assay on a limited basis ahead of commercial availability. The EAP, which was very well subscribed and helped us further enhance the assay clinically and optimize the launch by testing and identifying the opportunities to streamline logistics, reporting, and customer support. With the benefit of valuable lessons we garnered from our EAP, we launched the product in late July, three months later than expected. Based on the interest we're seeing, I believe the delay allowed us to introduce a better product, which will further support the strong NGS volumes we are capturing this year and position us well for continued growth in 2026. We continue to work with MoldDx on our Pantracer LBX submission and will provide additional updates as they become available. As it pertains to our full year 2025 guidance, based on the strength in our clinical business and expected performance in our non-clinical business that I just reviewed, We are reiterating the revised guidance for consolidated revenue, adjusted EBITDA, and net loss that we provided last quarter. I'm incredibly optimistic about our future, particularly as we continue to innovate in the large and rapidly growing NGS and MRD markets, and further leverage our leading presence in the community setting, where as much as 80% of cancer care is delivered to patients. And with that, I'll hand it over to Jeff to further discuss our results from the quarter.

Thanks, Tony, and good morning. Third quarter total revenue grew sequentially by 4% from Q2 and increased by 12% over prior year to $188 million. Total clinical revenue continued with strong double-digit growth and increased by 18% from prior year. This strong clinical growth was partially offset by non-clinical revenue climbing by 27% versus prior year, driven by weakness in the pharma revenue Tony spoke about. Adjusted gross profit improved by $5.2 million, or 7% over prior year. Adjusted EBITDA was $12.2 million, the ninth consecutive quarter of positive earnings. Clinical volumes and revenues continued with robust growth in the quarter. Total test volumes increased by 15% in the third quarter, with AUP growth of 3%. Same-store revenue without contribution from Pathline was $167 million, representing growth of 15%, driven by a 10% increase in test volumes and a 4% increase in AUP. We are continuing to see strength across our portfolio with above-market growth rates across the modalities we offer. NGS revenues grew by 24% over a prior year and a quarter and accounted for 33% of total clinical revenue. Year-to-date NGS revenues grew by 22% over a prior year. Average revenue for clinical tests increased sequentially from Q2 by $15, or 3%, and was up by 3% from prior year. Excluding Pathline, AUP increased by $17, or 4% from Q2, and was also up 4% over prior year. A larger percentage of higher value tests, including NGS, as well as recent managed care pricing increases, are helping to drive higher AUP. Total operating expenses in the quarter were $107 million, an increase of $11 million or 12%. We recorded an additional $7 million in impairment charges related to the planned sale of Trapello, with the balance of the cost increased due to higher compensation costs driven by the expansion of the commercial sales team. Cash flow from operations was a positive $9 million in the quarter, and we ended the quarter with total cash of $164 million, up slightly from Q2. Our balance sheet and expected cash flow will enable us to continue to invest in our business to drive organic growth, increase operating efficiencies, and fund future business development opportunities, including licensing and partnerships. We continue to see traction from the investments we have made to expand and enhance our commercial organization with our strong test volume growth. The LIMS project remains on track, and we expect to deliver operating efficiencies in 2026 and 2027 through the consolidation of multiple LIMS systems and reduction in redundant operating costs, as well as streamlining our lab operations. We remain committed to driving long-term shareholder value through targeted investments in the business and improved operational execution. As Tony noted, we are reiterating our full-year guidance that we updated in the second quarter We expect full-year consolidated revenue will be in the range of $720 to $726 million, representing growth of 9 to 10% over full-year 2024. We anticipate adjusted EBITDA to be in the range of $41 to $44 million, representing growth of 3 to 10%. And we expect full-year net loss to be in the range of $116 to $108 million, representing an increase of 37% to 47% as compared to our full-year 2024 net loss of $79 million. We will release our 2026 guidance when we report our full 2025 full-year earnings in February of 2026. With that, I'll turn the call back to Tom. Thanks, Jeff.

To recap, during the third quarter, we again delivered strong clinical volumes in revenue, while advancing NGS and MRD initiatives that we believe will contribute to accelerating growth in 2026 and beyond. We believe our unwavering focus on delivering a superior customer experience in the community setting is resonating in the marketplace. And as we continue to expand our menu of tests, community oncologists and pathologists will continue to view us as a partner of choice for their cancer testing and send out consolidation needs. We remain committed to innovation and operational excellence, which we believe will drive sustainable and profitable growth for our company and improve outcomes for patients. Thank you for your continued interest in neogenomics. Operator, this concludes our prepared remarks, so please open the line for questions.

Thank you very much. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your phone keypad now. The confirmation tone will indicate that your line is in the queue. You may press star 2 if you would like to remove your question from the queue. For any participants using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please wait a moment whilst we poll for questions. Thank you very much. Your first question is coming from David Wessenberg of Piper Sandler. David, your line is live.

Thank you very much, and congrats on a strong quarter, particularly with that clinical revenue growth. So how do you feel, I'm going to start with Jeff, how comfortable you feel with the guidance? And can you remind us what's the latest on Pantracer Liquid? Is there any chance you could see some revenue from it this year? And just want to confirm that that was removed from the guidance, so if we did get revenue from it this year, it would be upside to your estimates.

Yeah, thanks, Dave. So, you know, we gave thoughtful guidance for the year in Q2. You know, we believe we had a good third quarter and believe we're in a good position to meet Q4 expectations. In terms of liquid, Tony was pretty clear last quarter that we did not need approval for liquid biopsy from MolyX to hit our guide, and that is still the case as we look at our performance now in the fourth quarter.

Gotcha. And now, I know you're not giving 26, but you gave a lot of good commentary on MRD, and you hinted that you will be a contributor to revenue in 26. Can you give us a sense for when you expect certain reimbursements? I mean, I know there's some competitive stuff you want to be a little bit careful with, but Just in the sense of the magnitude and timing of some of those, what you're going to get in MRD, and then can you give us a sense on how much commercial muscle you'll put behind these launches? Just as a reminder, I think with Breast, you have a lot of expansion indications. Could you get expansion in that indication this year? next year. So thank you very much. And again, congrats and I'll hop off after this. Thank you.

Thanks, David. It's Tony. I'll take a crack at a couple of these and then certainly I can look to Warren to add a little bit more color as well. First on 26, as you appropriately say, we'll talk 26 in 2026, but I will give you a sense of what we see as some of the growth drivers that we anticipate for 2026. And then I will pull that back to your conversation around liquid biopsy, and radar ST. So, at the highest level, you should expect the growth drivers for 26 to be, in large part, quite similar to what we had in 2025. We expect our ongoing strong clinical performance relative to volumes to continue, and so that will certainly be a growth driver for us. We expect ongoing NGS growth rate. As Jeff commented in his remarks, we had 24% growth in revenue at NGS, and that was without the full ability of Pantracer LBX included within that mix, and so we have every expectation that NGS will continue to be a growth driver for us. As you rightfully mentioned, LBX combined with the Pantracer family, we believe, will be drivers moving forward. We can't really speculate as to the timing of LBX reimbursement, but Nonetheless, we see early signs of a positive uptake for the product, and we believe once reimbursement is secured, that would be a growth driver for us. We'll see revenue build through the course of the year, with obviously more of that becoming evident in the second half. The sales force that you mentioned, we are beginning to see the full benefit of now, the sales force expansion efforts that we have put in place, and we expect that to be a continued driver for us. And then on the radar ST front, we've already launched radar ST in the pharma sector. We're having good early conversations with that. As you might expect, the lead times on that book of business takes considerably longer. So we would expect kind of a slow revenue build in 2026 and most of that revenue becoming evident in the back half of 2026. And with multi-X approval, with the current indications, we expect a full launch of RadarST in the clinical setting in Q1. That will also be a build for us through the course of the year. And, of course, there's still Pathline and our RCM initiatives. And so we still see a healthy list of growth drivers for us in 26. And relative to Salesforce, I think Warren and Beth Eastland, their teams have done a phenomenal job at onboarding the existing representatives that we have. You know, I will tell you that we still believe that that is the right size for the indication mix that we have. But as we continue to invest, and we will invest in new indication flow, you should probably believe that we will be looking at options to upsize that sales force as it is under index, especially in the oncology side. of our sales force. But we don't anticipate that coming on too early. That will be, again, a build probably more in the latter half indicative of the new indications that we will be submitting and when they might come online, which will be more than likely second half. So that's kind of a high level of the drivers. And, again, we'll get more detail on these things in 26 when we talk around February's time. Okay, Dave?

Yeah, thank you. That was a ton of detail, so thanks.

Thank you very much. Our next question is coming from Andrew Backman of William Blair. Andrew, your line is live.

Great. Hi, guys. Good morning. Thanks for taking the question. Maybe on the NGS side of things, so the growth rates here imply that you're obviously taking share or growing market or some combination of both. Can you maybe just sort of talk to us about where you're seeing the most wins on the customer side of things, what types of accounts where you're winning? And then also on the product side, what products are you leading with where you're able to sort of capture share and begin to capture some share there. Thanks.

Yeah, thanks. Thanks, Andrew. Certainly, as you said, the growth rate at 24% implies a pretty meaningful share capture. Most of their business in quarter three was coming out of the community setting and largely from the oncology practice. Certainly, we still see opportunity within the community hospital setting, but as we onboard new practices, bring on new oncology ordering positions, and we see repeat order rates, we're seeing a compounding effect. So, largely coming from that community oncology setting. In terms of focus areas, certainly the Pantracer family has been a core focus for us. You know, we launched liquid as We've mentioned, but at the same time, we've introduced the Pantracer family, which includes Pantracer tissue, Pantracer tissue plus HRD, and obviously Pantracer liquid, which is our solution for therapy selection on the solid tumor side. And we're seeing really strong growth within that category as we make that a priority. But we're certainly not losing sight of sort of what got us here, which is our heme NGS portfolio. And that continues to grow very effectively as well. But there's a subset of five to seven products, which are ultimately our key focus area from a therapy selection perspective, and all of them are seeing attractive growth.

And then just from an expand-acquire perspective, you know, from an acquire new oncologist coming on board, we're seeing a good lift from recently brought on oncologists in 2025. We tracked that closely, and we're seeing reorder rates and growth. higher penetration amongst that. So we are seeing success in the acquire aspect of our strategy as well.

I guess, Andrew, the last cap-off point, I think Warren was just hitting on it towards the end. You know, NGS, just strategically for us, is extremely important that we continue that penetration into the therapy selection markets. You know, as Warren highlighted, the top five products now represent almost a quarter of our clinical revenue, and NGS in totality is almost a third of of our total clinical revenue. And so it aids us in AUP and a whole lot of other areas. And so it's going to be a continued point of emphasis for us moving forward. So thanks for the call.

Great, thanks. And then if I could follow up, just as one other question here, on the LIMS rollout, and I also think that you're integrating with Epic in some accounts. Obviously, those are multi-year processes to roll out here, but Anything you can maybe share with respect to benefits that we should start to see from these initiatives into 2026, just in practical terms, what does this do for your business? Thanks.

Yeah, well, Warren and I will tag team on that one, Andrew. I would say first from an organizational perspective, you're going to hear me speak quite a bit about ongoing need for simplification across the organization. I think that the model that we have today with multiple locations and, unfortunately, multiple LIMS systems it works against us in that regard. And so moving towards a common LIMS program, it aids certainly within the organization, not just the lab team, where they'll be able to, you know, be able to see where a particular test is at any given time along the continuum. Organizationally, as you say, we can retire, you know, eight LIMS systems that were in place prior to that. So there's certainly a cost benefit. And then across other parts of the organization as well, because in order to kind of offset the complication of multiple limb systems. We do a lot of things in other organizations that require a bit of a heavy lift that I think the limb system provide some efficiencies for as well. And so I think the early view is we should start to see some of these efficiencies coming through in the latter part of 26 and the later, the better benefit being more evident in 27 and 28 and beyond. It is just one step of many relative to simplification that we think could help us from our contribution perspective. And I'll warrant to give a little added color.

Yeah, so let me start with the Epic. Andrew, so first of all, I would start by saying we have over 340 interfaces in place already today. Some of them with Epic already, but we're establishing the Epic Aura solution. And that will go live towards the end of this year, and we'll see fairly rapid customer onboarding in early parts of 2026 and beyond. So excited about the acceleration nature that the Epic Aura solution will bring to us. And we've seen very strong sort of revenue growth and ongoing adoption when we put in space in place in general, and we believe it will be the same with Epic Aura. So certainly that's a key strategy for us moving forward and enables growth and sticking Coming back to the LIMS side of things, as Tony said, I think a strategy here to simplify, we have sort of five key priorities operations for simplification and margin expansion, one of which is being LIMS. I'll touch on two of the benefits that I anticipate are seeing gathering in 2026. The first one is our ability to be able to proactively equip physicians, ordering physicians and practices to understand sort of test status and more particularly the ability to do add-ons, et cetera, that they can do themselves versus having to come through customer service. So just ultimately creating a more seamless experience for the ordering position or the practice, so to speak. That's one area. The second one is the LIMS system you're putting in place has sort of AI integrated into it, and it'll allow us to identify areas of, I'm going to call it leakage, you know, productivity leakage within our workflows. And we can identify this and obviously look to streamline the workflow to iron out those areas that sort of lack or have opportunity for productivity. So it really is going to deliver insights to our workflow that we don't have today that allow for further productivity.

Great. That's all good, Keller. Thank you.

Thank you very much. Our next question is coming from Mason Carrico of Stevens. Mason, your line is live.

Hey, guys. Thanks for taking the questions here. On your NGS business, you've called out share gains. You guys often quote NGS revenue growth, but I was curious if you'd be willing to give us a bit of insight into how NGS volume growth has trended, just to give us a better view on gains. So when we look at NGS revenue growth, 24% this quarter, I think 23% last quarter. How much has been driven by volume versus ASP? Because I assume you guys are benefiting from ASP to some degree as coverage expands for those assays.

Yeah, we haven't disclosed the volume per se, but I would say it is more volume-driven. There is some AUP growth, but it's more volume-driven than AUP growth. And I think as we're continuing to see penetration there and getting you know, the ability to access our strong commercial channel, I think that's where we're seeing, you know, that volume uptick. I think bringing on the liquid, you know, we're actually seeing good uptick between the two of them as well, liquid and solid. And so I think we're well positioned to continue to get those gains.

Got it. Thanks. That's helpful. And when you think about revitalizing growth within your pharma business, could you just talk about how much of that is in your control versus how much relies on a snapback and spend across the broader sector? I guess, what do you view as kind of the key internal initiatives that you'll need to execute on to re-accelerate growth in that segment?

Yeah, Mason, I'll take a crack and then, you know, Warren again could add additional detail. I would say that, you know, for us, a big part of the opportunity lies in the portfolio. and bringing that for Colio forward. You know, and so we have now the opportunity to represent products like Pelletra. We have Radar ST now available to us within the pharma segment. And of course, you know, the liquid biopsy and Pantrix for family. It affords us opportunities to have conversations and get a little bit more relevant in those conversations as well. As I said to you before, I think a lot of those conversations are generating interest, but because of the lag times, I would still expect that some of the challenges that we see in our business in 2025 will continue into 2026, and we see a return to growth opportunity in 2027, and anything that would lead that to happen a bit faster would represent upsides. As far as things in our control, there are things still in our control, and that's a heavy focus on execution excellence. And we have onboarded a leadership team that is taking the bull by the horns, and I think that part is very much in our control, to drive the right conversations with the right customers. And that, I think, is something that we acknowledge that we had to improve upon, and I'm pleased to see that that action is taking root across the organization. And with that, I'll turn to Warren to add any other comments.

I think Tony's hit most of the high points. I'd say that certainly we're preparing our execution so that we can often attract the value proposition to our target customers in the biopharma space. Certainly the inclusion of radar has made us a significantly more attractive partner, which is enabling access for us to focus on both radar, but other sort of high value products, NGS, Elettra, et cetera. we're certainly gearing our commercial organization around that focus, coupled with underpinning that with a sound customer experience, which is, again, a key buying driver for farmer sponsors. From a market perspective, certainly, we're going to continue to work to execute effectively. As the market rebounds, we feel that there'll be a compounding effect to the recovery of the business.

But this is a long sales cycle, you know, product area. And so just to reiterate what Tony said last quarter, we expect, you know, pharma to be soft in Q4 as well as throughout 2026 as well. Got it. That makes sense.

Thank you.

Thank you very much. Our next question is coming from Don Brennan of TD Cowan. Don, your line is live.

Hey, this is Tom for Dan. Thanks for taking the question here and congrats on the quarter. Just a question now on, you know, what is driving the acceleration in your base clinical business? It looks like it's picked up on a volume basis this year versus prior years. The non-NGS business. You know, what is driving that? Is that better bundling? Is that better turnaround times to a point? You know, this is a business that, you know, everyone thought would be kind of cannibalized quite aggressively by NGS. So I just want to understand, you know, how you're driving that growth and how sustainable that acceleration is. kind of could be going forward. Thank you.

Tom, thanks. Thanks for the question. I think a couple of facets I'll highlight here. First of all, I would, again, come back to effective execution of our protect, expand, acquire strategy. We continue to do a great job of protecting existing customers. And that's sort of driven through just continuous focus on customer experience, whether that be from an operational perspective or just end-to-end as we look at it from requisition to results. So protect has really been a key factor. But we're seeing accelerated wins on the expand side and the acquire side of things. And I attribute that to two aspects. First and foremost, it's new products that we bring into the portfolio. And we speak significantly, obviously, about the NGS side of things. But don't forget about products like Cordon 18 and C-MAT, which have been critical sort of fillers to actually round out our offerings. So new products is certainly a key driver. And I think lastly, and very importantly, we communicated in Q4 of last year around the Salesforce expansion and sort of said that this was going to be a six to nine month sort of ramp to productivity. And what you're seeing right now is just follow through on exactly what we had said. We started to see increased productivity from those added sales resources, which are focused on the protect, expand, acquire strategy and the new products we bring to market. And these things are operating in concert with one another, delivering the type of numbers that you reflected on.

Yeah, the only thing I would add to that is, you know, even with record volumes, our operational execution and turnaround times continue to improve. So that remains kind of a vital component of our, you know, go-to-market strategy for retaining and growing and expanding business.

Great. And then just one follow-up on kind of the launch of Pantracer into next year and just trying to scope out the potential for acceleration there. So, you know, should we be treating this as kind of 2023 all over again? Or is the sales force now, you know, appreciably larger? You know, should we expect, you know, a larger acceleration given this is quite a hot area in general in oncology diagnostics? Anything to help frame your expectations versus your kind of solid tissue launch? in 2023 would be really helpful. Thank you.

Yeah, certainly. As an organization, we've matured since 2023. We've also expanded commercially as well. And so I think using 2023 as sort of a proxy would probably be a good starting point at this junction and probably layering on some additional factors like the Salesforce expansion would be a way to look at it.

And the majority of the Salesforce expansion was in the community segment. So that really positions us well to have the coverage we need for these new products.

Okay, great. Thank you very much.

Thank you very much. Our next question is coming from Subbu Nambi of Guggenheim Securities. Subbu, your line is live.

Hi, guys. This is Thomas on for Subbu. Thanks for taking our questions. Maybe I can ask both up front. So first, are you still expecting stronger performance in the data business on the non-clinical side in fourth quarter? And maybe just in color on why that should show strength based on what you've seen so far this year, what you're seeing in the funnel to be comfortable with that. And then second, can you just talk specifically for clinicians in the community setting on how radar has been received following the favorable summary judgment? What's the chatter like there? Thank you.

Yeah, on the data business, Q4 is historically, you know, the strongest quarter in that business. That business actually did grow in the third quarter, you know, double-digit growth in the third quarter. And so we are expecting that business, you know, to see sequential growth over Q3 in the fourth quarter.

Yep. Again, I just want to reiterate that we have not clinically launched RADAR as yet in the clinical setting. However, obviously, the news with regards to the outcome of the summary judgment has certainly circulated through the community oncology setting. And I'd say the vibe is increasingly positive about the fact that we can reenter the market. Again, it comes back to the fact that we believe we have one of the most sensitive assays in the market, but also the portfolio effect. the ability to consolidate all of your needs within the community oncology setting within a single vendor. So this helps round out that sort of value proposition for us.

Yeah, I think that's an important point just to reinforce. You know, we've always said this preferred partner of choice in the community setting, and that speaks to a balance of breadth of portfolio and innovation as well. And we look at that breadth of portfolio beyond just heme, solid tumor, and MRD. We look at breadth of portfolio at MRD as well. And so for us to be in a position to be able to offer FlowMRD, to have an outstanding NGS partner, MRD with Adaptive, and now RadarST, and don't forget we're going to continue to invest in our next-gen MRD program. So as a suite of products, it also fits well into our overall strategy. So I believe as that becomes more evident to our customers, the chatter will increase. But thanks for the question.

Great. Thank you guys very much.

Thank you. Our next question is coming from Yuku Oku of Morgan Stanley. Yuku, your line is live.

Hello. Thank you for taking my question. Given that Invigor 011 trial demonstrated how incorporating MRD testing can enhance probability of trial success, are you seeing an uptick in interest from pharma partners in integrating MRD into their clinical trial designs? And then a separate follow-up. Could you provide an update on Adaptive Partnership and what are some of the key learnings and feedback from the pilot so far?

So coming back to sort of farmer interest, I would say that farmer interest has been robust ever since we launched the product back in August of this year. Certainly, our first targets were prior users of the assay because of their familiarity, etc. But we've rapidly expanded that. We were recently at the ESMO conference, which was in Germany late last month or early this month. And again, very, very strong interest with regards to the assay for multiple purposes, but also from an endpoint perspective, as you articulated. So we're encouraged by the early signs. in terms of the farmer sponsor interest with regards to MRD. Sorry, what was your second? Adaptive. Adaptive, yeah. So we continue to progress very favorably with Adaptive. We started a pilot initiative in the third quarter, and really this was just to sort of understand the operational workflows, et cetera, because both organizations are very focused on delivering a sound customer experience. And we continue to expand that pilot in three distinct phases. We're rolling out the first phase of the three-phase initiative now, holistically, in the fourth quarter. And phase two and phase three will happen quickly in 2026. Great.

Thank you.

Thank you very much. Our next question is coming from Tycho Peterson of Jefferies. Tycho, your line is live.

Hey, team. This is Lauren. I'm for Tycho. Thanks for taking our question. Just going back a little bit to the rebounding growth in the pharma and non-clinical setting, likely more of a 27 event. For 26, how are you seeing radar adoption evolving in pharma partnerships versus the clinical setting? And then in terms of kind of the phrasing of partner of choice you've been using for community oncologists, what are some of the specific investments or initiatives that are kind of reinforcing that position? Thanks.

So I think we are certainly expecting to see revenue on the MRD side of things in the pharma space for 2026, and certainly that would sort of go a long way to address some of the other sort of headwinds we've been experiencing. We'll obviously look to quantify that as part of the guide when we speak about that next year, but certainly expecting pharma revenue for MRD In terms of your second question, it's multiple factors. I think first and foremost, it is around the portfolio and making sure that as we look to be the partner of choice to the community setting, it's having the most relevant portfolio, which a big focus of ours has been on ensuring we've got the right therapy selection portfolio. We believe that the Pantracer family brings that to the table now. along with key sort of add-ons, sort of testing, CMAT, CLAUDIN-18, that sort of rounds out our larger portfolio across diagnosis and therapy selection. Now we have MRD as well. And as Tony mentioned, it's not just RAID-RST, it's the partnership with ADAPTIVE, it's the fact we have FLOW MRD on the heme side as well. But in addition to that, It's the work that we're doing from a bidirectional interface perspective. It's the work we're doing around client and customer experience because those are the two areas which are sort of critical flying drivers. We hear over and over again that these community oncology practices are looking to remove friction from their practices so they can focus on sort of top of license type activities and they look for vendors that offer this frictionless experience and we believe the combination of consolidating oncology send-out requirements to a single lab along with best-in-class customer experience makes for a very, very attractive value proposition.

Yeah, I just think overall from, you know, if you go back historically, when we were on the market for a few years with Radar Pharma, you know, we hit $6 million, $7 million a year, you know, after a couple of years. So there will be a ramp for Pharma in Radar as we're kind of reengaging in the market.

Perfect. Thanks so much.

Thank you very much. And our next question is coming from Puneet Sudha from Lyric. Puneet, your line is live.

Yeah, hi, guys. How are you thinking about the AUP as you bring this MRD on board and then maybe just elaborate to us sort of as you think about looking at the competitive landscape CCP has continued to grow for a number of companies that are serving products in the marketplace. So are you seeing anything different and competitively in the NGS side of the business?

So I'll start with AUP and then let Warren, you know, talk about the competitive dynamics. So I think, you know, obviously getting Moldy X approval was a good, you know, first step. For radar, we're also working to get commercial approval as well. And as is the challenge with some larger panel tests, that will take time to get commercial coverage for radar as well. Others being in the space and having more overall acceptance, I think, is a positive. So I think it will be, you know, it will be a driver for AUP over time, but probably more starting in the back half of next year and into 27.

I think in terms of, are we seeing anything different in sort of therapy selection in GSP? I mean, certainly the competitors that we've continuously come up against in the community oncology setting remain very present. It's certainly a hotly contested environment, but we feel that certainly the round out of our portfolio, which was sort of requested by many of these oncologists in the community, has been very well received. And it's not just volume increases that we've seen across the liquid biopsy test that we launched, we're seeing across the category. And actually, for interesting information, Some of our what we call neotypes, which are cancer-specific panels for breast or for lung or for brain, we're seeing actually renewed growth in those panels as well. So, again, it comes back to this comprehensive offering that we have both across solid tumor and heme that creates the differentiation for us in the marketplace.

Got it. And then just on the COG side, can you talk a bit about the levers you have to reduce the COGS. As you bring on these new assays, you know, there's obviously a push and pull there. So, just wondering, how are you thinking about the overall cost per test?

Yeah, thanks, Puneet. You know, I think, you know, even in Q3, we've got some LBX volume and limited reimbursement. So, we're actually, you know, recovering the COGS, you know, in Q3 for LBX. As our volume increases from some of these larger panel tests, we will see operating cost efficiencies just by the number of tests we can do at one time. I think a few of the other things we've talked about today will also be drivers of COGS. The lens consolidation, you know, consolidating multiple lens systems, you know, streamlining the lab. We have a dedicated, you know, process on lab automation. So the ability to automate processes and use technology and newer lab equipment to drive efficiency is well underway, and we see good uptake there. Being able to digitize more lab processes, you know, to improve the customer experience as well. And then digital pathology, we see efficiencies and revenue opportunities with digital pathology. And finally, look, we still have a fair amount of capacity in our lab footprint. So, you know, we've got the lab in Fort Myers. You know, we've got a new lab we expanded in North Carolina, RTP. We have a new lab in the Northeast. So just incremental volume coming in, we can get operating efficiencies, you know, on a relatively large scale. you know, fixed cost footprint. So we have a multi-year opportunity to drive margins there.

I'd add maybe two points to this, may substantiate what Jeff was saying about larger volume and the leverage there. So, I mean, we've always focused on turnaround time because that's a differentiator for us. And as a result, we hadn't moved to largest flow panels and we hadn't moved to the NovaSeqX. Those are both initiatives that we have in focus for us in 2026. So they're two real tangible examples in terms of how incremental volume can help to drive down costs.

And the last piece I would say is, you know, from a cost per test perspective, Pathline has a higher overall cost per test than Legacy Neo because of that lack of incremental volume. So the ability to streamline Pathline and actually pump into incremental volume in there will bring down that cost per test as well, so early.

Got it. Okay. Thank you.

Thank you very much. Our next question is coming from Mark Massaro of BTIG. Mark, your line is live.

Thanks for the time. I'll just keep it to one on radar. Could you just remind us what indications you're pursuing here in addition to head and neck and breast cancer and any cadence of reimbursement that you're expecting there, any further milestones we should be looking for out to 26? Thanks.

Well, as you mentioned, you know, the two indications that we have secured have been subsets of head and neck, which is HPV-negative adjuvant surveillance. In breast, it's HR positive and HER2 negative surveillance five years out. So those are the two that we go to market. Relative to new indication areas, I will tell you we have every intention. We have been doing ongoing work in R&D, and so we will be making additional submissions for indications expansion for RadarST. I won't go into the specifics about those for absolutely obvious reasons but we plan to be moving forward with those um and as well we are continuing our next gen mrd program as well and we we see the necessity of having both radar st and next gen because you know having an ultra sensitive option for low shedding uh cancers is going to be an important aspect as well and and so we see the the indication flow a little bit different for ng for our next gen program that we would with radar st so we're We're trying to avoid redundancy and overlap in spend relative to those indications. So you should expect us to add indication submissions in the short term, which we believe could be manifest in the second half of 2026. Perfect.

Thanks for the color.

Thank you very much. And our next question is coming from Mike Mattson of Neaton. Mike, your line is live.

Hi, everyone. This is Joseph on for Mike. I guess just two from me. Just looking at pricing, AUP, obviously you guys have seen many consecutive quarters of improvement there. You know, while small path line is a headwind there, and I did hear what you guys said concerning, you know, just volume coming through at a higher rate will improve COGS, but I know NGS, bringing NGS into there, you know, is the plan and what's the plan. I'm just kind of curious if you could remind us on the timeline for that. Is that a 2026, you know, plan or is that already in the works to bring NGS or more NGS into the Pathline Lab?

Yeah, so just to be clear on the Pathline lab, so the NGS is going to be done at our other sites. So the fast turnaround tests enable us to capture more NGS work. The timelines for doing that NGS work enable us to send those out to our other labs in Florida and California and still meet our timeframe. So we're actually going to gain, you know, operating leverage by pumping more volume into our existing sites as a pull-through through the Pathline sites.

Yeah, and just as a follow-up, you know, on that path line, as we said, the strategy there was always to give us opportunity to deal with the underpenetration of the Northeast. And we have made really good progress there. So all the legal integration and the assay validations have been completed. And so now we can offer, you know, a more complete complement of the NEO portfolio and take advantage of the path line site for the more rapid turnaround process. testing needs that are up there, but as Jeff said, taking advantage of our footprint and the efficiencies we gain in our other lab sites. And so we're confident, and I know our selling team is excited about the prospects that they are generating. We see a healthy new customer list beginning to emerge, and that's why we are of the belief that it will be a growth drive, of course, in 26 and beyond.

Okay. Okay, great. That's very clear. I guess maybe just one quick one. NGS growth specifically, I know the target there is 25% or more. You know, very near that target. Obviously, you know, above market growth right now. But we have seen acceleration there in NGS growth the last two quarters. I'm just curious how you're thinking of the next quarter for Q25 and 2026. Is it, you know, back on that target of over 25%? Is the target more just above 20% at this point? I'm just kind of curious your guys' thoughts there.

Yeah, so we gave a guide for the back half of the year. We didn't give a Q4 specific guide. You know, we expect to see continued good growth in NGS, but we haven't broken out the specifics on that.

Okay, fair enough. Yeah, congrats on the great quarter.

Thank you.

Thank you very much.

Thank you very much. Well, that does conclude our question and answer session. I would now like to turn the floor back to Tony Zouk for closing comments.

Well, again, I'd just like to thank everybody for joining us on the call. As we said, it was a good quarter. We have focused on operational excellence, and I'm pleased to say that the teams in both our commercial organization and our lab have performed extremely well, and we're very proud of all the work that people at NEO are doing. to advance cancer care for all the patients in the community. Once again, thank you for your time, everyone, and we'll look forward to some one-on-one follow-ups.

Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation.