neogenomics company overview presentation 2016 03 14

Building One Growth-Driven Company l 1 Building One Growth-Driven Company l 1

Company Overview Presentation

March 2016

Building One Growth-Driven Company l 2

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.


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

Most Comprehensive Cancer Testing Menu in Industry

Strong Management Team with large cap lab

experience

Acquisition of Clarient Should more than Double Revenue and more than Triple Adj. EBITDA in 2016


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 Growth 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

• Mark Machulz, Vice President, Operations Director of Operations - Clarient Diagnostic Services

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


1,152 4,082 12,838

20,998 32,539

45,675 57,332

76,288

114,606

137,317

177,279

221,033

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

$558 $1,885

$6,476 $11,505

$20,015

$29,469 $34,371

$43,484

$59,866

$66,467

$82,194

$91,048

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

NEO’s Proven Track Record of Consistent Growth

Base NEO* Annual Revenue Base NEO* Tests Performed

($, 000s)

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


3-4% Price Increase Expected in 2016 After 6 Years of AUP Declines!

* For comparison purposes Base NEO excludes the impacts from the Path Logic (completed 7/8/14) and Clarient acquisition (completed 12//3015). (1) Productivity calculated as the average number of lab tests completed per month per laboratory FTE.

45.9%

44.7% 44.8%

47.7% 48.0%

46.5%

-36.2%

54.0%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

35%

40%

45%

50%

55%

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Gross Margin % Cum Change in Avg Rev/Test Since 2009 Cum Change in Productivity Since 2009 (1)

Cum

Cha

nge

in A

vg R

ev/T

est &

Pro

duct

ivity

Gros

s Mar

gin

Historically, Steady Margins Despite Lower Avg Unit Prices – Base NEO*


Customer Targets

Pathologists & Hospital Pathology Groups (about 81% of 2015 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 15% of 2015 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 4% of 2015 Revenue*) • Contract research/clinical trial support work for Pharma clients

* Percentages are for Base NEO only and exclude the impacts from the Path Logic acquisition (completed 7/8/14) and Clarient acquisition (completed 12//3015).


Rapidly Growing Market Opportunity The exploding cost of cancer care offers extraordinary opportunities for those labs that can deliver innovative and value-based solutions to the healthcare system.

Source: National Institutes of Health (NIH)


Accelerating Pace of Innovation • 70 new/revised tests, incl: NeoLABTM Liquid Biopsies • MDS/CMML Profile • AML Profile • FLT3 Mutation Analysis • NPM1 Mutation Analysis • PML-RARA Translocation • RUNX1-RNX1T1Transloc • INV16 Translocation • c-kit Mutation Analysis • IDH1 Mutation Analysis • IDH2 Mutation Analysis • NRAS Mutation Analysis • KRAS Mutation Analysis • BTK Inhibitor Resistance • Solid Tumor Monitoring

Germline MolDx Testing • BRCA1 & BRCA2 • Lynch Syndrome (colon) • 73 Gene Comprehensive

Predisposition Panel

Other • ALK, ROS1, RET Fusion • Sarcoma gene Fusion • NeoSITE Cervical FISH • Expanded IHC Menu • Smart Flow Cytometry

• 10-color Flow Cytometry • Implemented Adv MolDx

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

increasing sensitivity of Sanger sequencing

• 7 NeoTYPE MolDx Panels • 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

2015

2012

2013

• 60 new/revised MolDx 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

processing platform

2014


Accelerating Same Store Sales*

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

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Year-Over-Year Total % of Test Volume Growth

Same Store Year-over-year Growth w/o FCS FCS Year-over-Year Growth Other Year-over-Year Growth


Strategic Rationale of Clarient Acquisition

1. Lab scale allows opportunity to be the low-cost provider in each key laboratory discipline.

2. Better balance of clinical products and payors to reduce concentration risk.

3. Significantly enhanced Clinical Trials capability.

4. Create greater economies of scale in IT, Regulatory, Billing, Compliance, etc.

5. Leverages and optimizes the Sales and Marketing function across a broader revenue base with more diverse geographic coverage.

6. Leverages innovation & product development across broader client base.

7. Greater ability to serve Managed Care and large buyers in a significant way.

8. Better “one-stop-shop” capability and services to existing and new clients.

Building One Growth-Driven Company l 12 Confidential

New NextGen

Digital Companion

Pathology Dx

OncologyTechnologies: FISH Clinical Trials

Flow

Cytogenetics

TraditionalOld Anatomic Path.

Low Market High Growth

12

Consistent with NEO’s Acquisition Strategy

NEO Focus – Upper right hand quadrant

Synergistic Deals

High

High Low Market Growth

Tech

nolo

gies

Clarient Attributes

Technology leader

High growth (clinical trials)

Revenue scale

Nationwide presence

Complementary footprint

Geographic proximity

Ongoing GE affiliation


Key Benefits

• Synergy potential of $20mm - $30mm/year within 3-5 year – Laboratory, Purchasing, Cross-selling, etc.

• East Coast/West Coast labs – Combine Irvine and Aliso Viejo

• Low cost position in every testing discipline

– FISH, Flow, Cytogenetics, IHC, Digital Pathology, Molecular

• Leadership in hematological and solid tumor cancers – One-stop-shop for clients with broad geographical coverage

• Potential to be a leading consolidator going forward

• GE as significant long-term Investor

– Collaboration in Bioinformatics in Precision Oncology

• Significant clinical trials business – Combined business approximates $25mm revenue


Growth – Expanded Geographic Coverage

NEO Field Sales Representation (27) Clarient Field Sales Representation (27)

Does Not Include Sales Management or Managed Care


Organic Growth through Market Demand

Core Growth

5 – 10%

Demographic Changes

Market Share Gains

Innovation Driven Growth

5 – 10%

Constant Test Development

Liquid Biopsies “plasma tests”

“Smart Medicine”

BioPharma Growth

15 -20%

Clinical Trials Companion Dx

We have very real opportunity to grow volumes 10-20% annually in each of our clinical and biopharma businesses for a long time…


Recent Financial Information (Dollars in Millions)

Clarient NeoGenomics Comined

2015 2015 2015Pro Forma Audited Pro Forma

Revenue 116.8$ 99.8$ 216.6$

Estimated Revenue using Neo Policie 125.0 (1) 99.8 224.8

EBITDA* 5.7 (2) 9.7 15.4

Pro Forma Adjusted EBITDA 9.2 (3) 9.7 18.9

(1) 2015 Revenue using NEO's Policies adds back 7% of net revenue for bad debt and moves this charge to G&A.(2) 2015 EBITDA excludes a $47.6 MM impairment charge to reduce the value of intangibles.(3) Pro Forma Adjusted EBITDA includes adjustments to reflect the business being acquired.


Implied Valuation & Revenue Multiple

($ and shares in milllions) Shares Issued Transaction

Consideration

Cash $80.0FMV of Common Stock at Issue 15.0 $102.5 (1) FMV of Preferred Stock at Issue 14.7 $73.2 (2)

Transaction Enterprise Value (3) $255.7

Clarient Revenue2015 ProForma Revenue $116.8

2015 ProForma Revenue - NEO Method (4) $125.0

Transaction Value/ LTM Revenue2015 ProForma Revenue 2.19 x

2015 ProForma Revenue - NEO Method (4) 2.05 x

(1) GAAP fair market value accounting required a 15% illiquidity discount be placed on the shares issued at Close.(2) A Monte Carlo Simulation was utilized to determine the FMV of the Preferreed Stock as of the Closing Date.(3) Transaction contemplated a debt-free & cash free closing with customary post closing adjustments for working capital.(4) Historically Clarient has recorded bad debt in Net Revenue, whereas NeoGenomics has recorded bad debt in G&A. Thus, we have made a pro forma adjustment to put Clarient's revenue on a similar basis to NEO's revenue.


2016 - Combined Pro Forma Revenue Bridge(1)

(1) Preliminary Estimate - Subject to further refinements after close

We estimate combined revenue of approx. $240 – $250 mm in 2016…

CMS Reimbursement estimates includes net positive price adjustments of $4-5 mm for NEO and $3-4 MM for Clarient. We estimate Revenue Distractions of approximately $6 million relating to sales pipeline reductions.

Clarient revenue includes estimated Bad Debt rate for Clarient, previously included in net Revenue

$0

$50

$100

$150

$200

$250

$300

Neo Clarient* CMS Fees Distractions New Neo

$118mm

$125mm ($6mm)

$8mm $245mm

Building One Growth-Driven Company l 19 Confidential 19

2016 Pro Forma Adjusted EBITDA Bridge (1)

NEO expects to realize significant EBITDA growth and cost synergies in 2016 and beyond as a result of efficiencies gained through the combination with Clarient

– The 2016 PF Adjusted EBITDA bridge conservatively estimates a $3mm reduction to Adjusted EBITDA as a result of revenue distractions expected during the integration

(1) Preliminary Estimate – Subject to further refinements

$0

$5

$10

$15

$20

$25

$30

$35

$40

Neo Clarient CMS Fees Synergies Distraction New Neo

$15mm

$9 mm

$8 mm

$6mm

($3mm)

$35mm

We estimate combined Adj. EBITDA of approx. $33 – $38 mm in 2016…


Current 2016 Guidance

• Revenue: $240 - $250 MM

• Adjusted EBITDA 33 - 38 MM

• Adjusted Net Income* 7 - 12 MM

• Adjusted Diluted EPS* $0.07 - $0.12

* Adjusted Net Income in a non-GAAP measure which in defined by NeoGenomics as Net Income Available to Common Stock plus (a) amortization of customer lists and other intangibles, (b) non-cash, stock-based compensation, (c) non-recurring (income) or expense, (d) acquisition related transaction expenses, (e) deemed dividends on preferred stock, and (f) amortization of preferred stock beneficial conversion feature. Adjusted Diluted EPS assumes all preferred stock is converted into common shares. NeoGenomics believes that Adjusted Net Income and Adjusted Diluted EPS provide a more consistent measurement of operating performance and trends across reporting periods by excluding those cash and non-cash items of income and expense not directly related to the ongoing operation from GAAP Income Available to Common Stock.


NeoGenomics Vision and Goals Leadership Goals: • Be the leading oncology-focused testing and information company in the World. • Innovate aggressively to advance precision medicine. • Be the highest quality and lowest cost provider in each product area

Competencies: • Outstanding Scientific, Medical and Informatics expertise. • Partnerships for efficiency/effectiveness across health-care care continuum • Disciplined process management and quality systems. • Entrepreneurial, values-driven culture.

Financial Performance Goals: • Consistent and sustainable double-digit revenue growth. • Clinical Trials > 15% of revenue. • Adjusted EBITDA margin of 20-25% when annual revenue >$300 MM.


Appendix

20


Reimbursement is Finally Expected to Increase in 2016 Implied CY 2016 Physician Fee Schedule Rates Based on Inputs from CMS Final Rule CMS-1631-FC (Issued 10/30/15)

CPT Proc Code Procedure Description

National Unadj Rate

2014

National Unadj Rate

2015

Prelim Rule - Implied

National Unadj Rate

2016 (Issued

July 2015)

% Change

2016 Prelim

Rule vs 2015

Final Rule - Implied National

Unadj Rate 2016 (1)

% Change

2016 Final Rule vs Prelim Rule

% Change

2016 Final Rule vs

2015

88184 FLOW 1ST MARKER 87.77$ 94.51$ 58.50$ -38.1% 76.31$ 30.4% -19.3%88185 FLOW EACH ADDL MARKER 53.73$ 57.49$ 17.69$ -69.2% 46.22$ 161.3% -19.6%88189 FLOW INTERP 16 OR MORE MARKERS 110.69$ 113.91$ 115.19$ 1.1% 114.29$ -0.8% 0.3%

88374 FISH AUTOMATED PER PROBE (Multiplex Probe Stain) 255.77$ 205.54$ 350.62$ 70.6% 346.10$ -1.3% 68.4%88374-TC FISH AUTOMATED PER PROBE TECH (Multiplex Probe Stain) 193.08$ 160.26$ 304.40$ 89.9% 299.88$ -1.5% 87.1%88374-26 FISH AUTOMATED PER PROBE INTERP (Multiplex Probe Stain) 62.69$ 45.28$ 46.22$ 2.1% 46.22$ 0.0% 2.1%

88121 FISH AUTOMATED - UROVYSION 508.30$ 556.97$ 566.92$ 1.8% 558.20$ -1.5% 0.2%88121-TC FISH AUTOMATED - UROVYSION 459.99$ 505.23$ 514.56$ 1.8% 506.25$ -1.6% 0.2%88121-26 FISH AUTOMATED - UROVYSION 48.31$ 51.74$ 52.36$ 1.2% 51.95$ -0.8% 0.4%

Uses G0461 in 201488342 IMMUNOHISTOCHEMISTRY (1st Stain) 88.48$ 90.91$ 108.69$ 19.6% 107.48$ -1.1% 18.2%88342 - TC IMMUNOHISTOCHEMISTRY TECH (1st Stain) 57.67$ 54.26$ 71.14$ 31.1% 70.22$ -1.3% 29.4%88342 - PC IMMUNOHISTOCHEMISTRY INTERP (1st Stain) 30.81$ 36.65$ 37.55$ 2.5% 37.26$ -0.8% 1.7%

Uses G0462 in 201488341 IMMUNOHISTOCHEMISTRY (Add'l Stain) 68.42$ 67.91$ 91.72$ 35.1% 90.64$ -1.2% 33.5%88341 - TC IMMUNOHISTOCHEMISTRY TECH (Add'l Stain) 55.88$ 45.99$ 63.55$ 38.2% 62.70$ -1.3% 36.3%88341 - PC IMMUNOHISTOCHEMISTRY INTERP (Add'l Stain) 12.54$ 21.92$ 28.17$ 28.5% 27.95$ -0.8% 27.5%

Uses G0461 in 201488344 IMMUNOHISTOCHEMISTRY (each Multiplex Stain) 88.48$ 117.50$ 176.58$ 50.3% 173.77$ -1.6% 47.9%88344 - TC IMMUNOHISTOCHEMISTRY TECH (each Multiplex Stain) 57.67$ 77.26$ 135.41$ 75.3% 132.92$ -1.8% 72.0%88344 - PC IMMUNOHISTOCHEMISTRY INTERP (each Multiplex Stain) 30.81$ 40.25$ 41.16$ 2.3% 40.84$ -0.8% 1.5%

88361 MORPHOLOGY, EACH ANTIBODY - AUTOMATED 157.98$ 170.32$ 122.77$ -27.9% 149.40$ 21.7% -12.3%88361-TC MORPHOLOGY TECH, EACH ANTIBODY - AUTOMATED 98.51$ 109.96$ 65.72$ -40.2% 88.49$ 34.6% -19.5%88361-26 MORPHOLOGY INTERP, EA ANTIBODY - AUTOMATED 59.47$ 60.37$ 57.05$ -5.5% 60.91$ 6.8% 0.9%

(1) Assumes no other Physician Fee Schedule (PFS) rule changes or limited coverage determinations are implemented for 2016.


Core business focused on IHC, Flow, FISH, Cytogenetics and Molecular tests

National reach with focus on both independent and hospital pathologists

Consistently strong growth - early development to late stage testing

~ 200 projects in process for >30 customers

Clarient Overview

24

IHC/Digital Pathology: Large and Industry leading capabilities

FISH/ISH: Similar Instrumentation and capabilities

FLOW: Similar instrumentation and capabilities

Molecular: Smaller menu

Cytogenetics: Similiar capabilities

Facilities/Infrastructure Customer Mix

Product Lines (1)

78,000 sq. ft. Lab located in Aliso Viejo, CA

Available Capacity due to efficient workflow and processes.

Uses similar equipment and Instrumentation.

Uses similar IT Labs Systems and database structure

24,000 sq. ft. facility located in Houston, TX

IHC42%

FISH/ISH19%

FLOW14%

Molecular15%

Cyto5%

Other5%

(1) Clinical operations only. Percentage of tests Performed.

CLINICAL CUSTOMERS

BIOPHARMA CUSTOMERS and

Other


Clarient Test Volume and Average Unit Price

Revenue by Customer Type: Tests

2013 2014 2015 PF 2013 2014 2015Clinical $111.9 $106.5 $93.8 Clinical Revenue $111.9 $106.5 $93.8BioPharma 13.8 20.7 23.0 Tests 297.7 284.7 271.3Total Revenue 125.7 127.2 116.8 AUP(1) $376 $374 $346

Bad Debt Acctng Adj(2) 6.6 6.7 8.2 Bad Debt Acctng Adj(2) 19.8 19.7 26.1 Proforma Rev to NEO $132.3 $133.9 $125.0 Proforma AUP to NEO $396 $394 $372

(1) Average Unit Price is based on revenue from clinical testing (excluding BioPharm tests).(2) Historically, Clarient booked Bad Debt as a reduction to revenue, wheras NEO books it in GA.

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

2013 2014 2015 PF

BioPharma

Clinical

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

2013 2014 2015Est

Tests


Clarient Revenue and Payer Mix in 2014

Payor Mix - 2014 Clinical Only

2014 Payor MixClient 39.6%Insurance 34.4%Government 12.4%HMO 5.3%Patient/Other 8.3%Total 100.0%

Client

Insurance

Government

HMO

Patient/Other


Clarient Clinical Trials & BioPharma A rapidly growing part of Clarient’s business and a fantastic opportunity . . .

• $23mm/yr. in current business

• Strong relationships with several leading Pharmaceutical firms

• PDL1 22C3 – FDA Approved companion diagnostic for Keytruda

• Continued push into Companion Dx and personalized medicine

• Approved vendor with top firms

• On several firms advisory boards

• Solid pipeline and future growth opportunities


Clarient Transaction Consideration • $80 MM Cash

– $15 MM – NEO cash from balance sheet – $10 MM – New, 5-year $25mm revolver – $55 MM – New, 5-year Term Loan

• 14.67 MM Shares of Series A Redeemable Preferred Stock

– Issued at $7.50 per share – Redeemable by NEO at any time at the issue price plus accrued PIK dividends – Up to $10 MM discount for early redemption (declining discount over 4 years) – GE Ability to convert to common after 3 years if common stock > $8.00 per share for 30

consecutive trading days. – 4% annual PIK dividend begins 1/1/17 and increases after Year 4 by 1% per year to 10%

in year 10. – Valued at $73.2 MM for GAAP fair market value on closing date

• 15 MM Shares of Common Stock

– Valued at $102.5 MM for GAAP fair market value on closing date

neogenomics company overview presentation 2016 03 14

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