Ladies and gentlemen, thank you for standing by, welcome to the NeoGenomics Inc. Annual Meeting. I will now like to hand the conference over to your speaker today, Ms. Denise Padula. Ma'am, please go ahead.
Thank you, operator. Will the meeting please come to order? This is the 2020 annual meeting of the stockholders of NeoGenomics Inc., a Nevada corporation. I am Denise Padula, the general counsel and corporate secretary of the company. I have been appointed by the board of directors to serve as Inspector of Elections. My job will be to certify the results of all voting accomplished before the meeting, as well as recording and certifying all votes registered at this meeting. This meeting is being conducted virtually in order to protect our shareholders and employees from potential exposure to COVID-19. The procedure will be different than what we are all used to. You have received a notice with a link to the virtual meeting and a unique control number.
If you are logged in using your control number, you have access to an online portal through which you can communicate with us. You can send in questions either through the text box or by calling in. We will be able to see the written questions as you submit them and will address them during the Q&A session at the end. If you wish to call in with a question, there are instructions in the bottom left corner of the portal above the Ask a Question box. The phone number for the Q&A line is 844-800-3452. The operator will confirm your name and provide wait music. From there, you can dial star one to enter the question queue. We ask that you please wait to dial into the question queue until we begin the Q&A session. We appreciate your patience during this process. It is new to all of us.
We hope to be able to meet in person again next year. The order of business today will be to convene this 2020 annual meeting of stockholders and to consider and vote on the following three proposals. First, to elect nine members of our board, each to hold office for a one-year term ending on the date of the next succeeding annual meeting of stockholders, or until such director's successor shall have been duly elected and qualified. Second, to approve the advisory vote on the compensation paid to our named executive officers, also referred to as a stockholder say on pay vote. Three, to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020. I would like to introduce Douglas M.
VanOort, Chief Executive Officer and Chairman of the Board for NeoGenomics, who will now report as to the call of the meeting.
Well, thank you, Denise. Good morning, everyone. Before proceeding, I would like to introduce you to senior members of the management team that are in attendance with us today. Kathryn B. Mckenzie, Denise Padula, Bill Bonello, Rob Shovlin, George Cardoza, Dr. Larry Weiss, Jennifer Balliet, Stephanie Bywater, Steve Ross, and Doug Brown. Additionally, we have the following board members in attendance: Lynn Tetrault, Kevin Johnson, Ray Hipp, Bruce Crowther, Steve Kanovsky, Steve Jones, and Rachel Stahler. Finally, also with us today is Bruce Rucks and Bree Hillman, representatives of our external auditors, Deloitte & Touche LLP. This annual meeting has been duly called in accordance with the provisions of the bylaws of the company and the relevant laws of the Nevada Revised Statutes.
I have a copy of the notice of the annual meeting dated April 15th, 2020, mailed on April 17th, 2020, to all stockholders of record at the close of business on March 3rd, 2020, the record date. At the respective addresses appearing on the stock records supplied to the company by the company's transfer agent for the purpose of notice. I also have a copy of the certificate of mailing from the company's vendor for such purposes, Broadridge, certifying that these documents were mailed to the stockholders of record of the company on April 17th, 2020. Copies of the notice and certificate of mailing will be filed in the minute book with the minutes of this annual meeting.
A complete list of the stockholders of record entitled to vote at this annual meeting has been open to the examination of any stockholder for any purpose germane to the meeting during ordinary business hours for the 10 days prior to this meeting at the company's headquarters. If you are logged in as a shareholder, the list is also available for inspection during the meeting on the virtual platform by clicking the link labeled Registered Shareholder List. I have in my possession a list of stockholders of record entitled to vote at this meeting. There were an aggregate of 105,089,310 shares of the company's voting common stock outstanding on the record date and eligible to vote at this annual meeting.
The presence in person or by proxy of the holders of a majority of all of the issued and outstanding shares entitled to vote is required for a quorum for the transaction of the business to come before this annual meeting. As a majority of the voting capital stock entitled to vote on the proposals as of the record date is represented by their presence today, a quorum is present. The required notice of the meeting has been given, a quorum is present, and this annual meeting has been regularly and lawfully convened and is now ready to transact business. We will now turn to the proposals that are set out in the notice of this meeting. The first proposal is to elect nine board members for a one-year term ending on the date of the next annual meeting of stockholders, or until their successors are elected and qualified.
The nominees for election to the board are myself, Douglas M. VanOort, Steven C. Jones, Bruce K. Crowther, Kevin C. Johnson, Raymond R. Hipp, Lynn A. Tetrault, Alison L. Hannah, Stephen M. Kanovsky, and Rachel A. Stahler, all of whom currently serve on the board and all of whom have advised the company of their willingness to serve as a member if elected. Is there any stockholder present who wishes to make a motion on this proposal?
I do.
The chair recognizes Kathryn McKenzie, a stockholder of the company.
Mr. Chairman, I hereby move that each of Douglas M. VanOort, Steven C. Jones, Bruce K. Crowther, Kevin C. Johnson, Raymond R. Hipp, Lynn A. Tetrault, Alison L. Hannah, Stephen M. Kanovsky, and Rachel A. Stahler be elected to serve as a member of the board until the first annual meeting of stockholders following his or her election and until his or her successor has been duly elected and qualified.
I hereby second the motion. If you have delivered a proxy to the corporation, your shares will be voted in the manner you have specified on that proxy. Unless you wish to change your vote, it will not be necessary for you to take any further action with respect to the matter being voted on today. If you wish to vote in person on this or any proposal, you may do so through the meeting portal. We will now turn to the second proposal that is set out in the notice of this meeting. The proposal is to approve the compensation paid to our named executive officers. Is there any stockholder present who wishes to make a motion on this proposal?
I do.
The chair recognizes Kathryn McKenzie, a stockholder of the company.
Mr. Chairman, I hereby move that the compensation paid to our named executive officers be approved.
I hereby second the motion. If you have delivered a proxy to the corporation, your shares will be voted in the manner you have specified on that proxy. Unless you wish to change your vote, it will not be necessary for you to take any further action with respect to the matter being voted on today. If you wish to vote in person on this or any proposal, you may do so through the meeting portal. We will now turn to the third proposal that is set out in the notice of this meeting. The proposal is to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31st, 2020. Is there any stockholder present who wishes to make a motion on this proposal?
I do.
The chair recognizes Kathryn McKenzie, a stockholder of the company.
Mr. Chairman, I hereby move to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31st, 2020.
I hereby second the motion. If you have delivered a proxy to the corporation, your shares will be voted in the manner you have specified on that proxy. Unless you wish to change your vote, it will not be necessary for you to take any further action with respect to the matter being voted on today. If you wish to vote in person on this or any proposal, you may do so through the meeting portal. Since all stockholders of record desiring to vote have had the opportunity to do so, the polls are now closed. The secretary is directed to place with the corporate records of the company the list of stockholders of record present in person on the virtual shareholders' meeting and represented by proxy with the number of shares owned by each.
Based upon the preliminary vote totals, the nominees for election to the board of directors have been elected. The compensation paid to our named executive officers has been approved, and the auditors have been ratified. The proposals acted upon by the stockholders and the final voting results of such proposals will be set forth in a Form 8-K to be filed by the company with the U.S. Securities and Exchange Commission. As there are no other matters to be considered, I invite a stockholder to make a motion that the meeting be adjourned. The chair recognizes Kathryn McKenzie, a stockholder of the company.
I move that the meeting be adjourned.
I second the motion. Will those in favor say aye? Aye.
Aye.
Are those opposed? This annual meeting of the stockholders of NeoGenomics Inc. is hereby adjourned. Thank you for attending. Please feel free to remain for a management presentation and a question and answer period. Thank you for that formal part of our stockholders meeting, and I will now present the current state of our business and the future outlook, and after that, we'll have time for questions and answers. I will say, first of all, that we miss seeing familiar faces of many of our long-term shareholders this year as we conduct this meeting on this virtual basis. However, we're delighted that you've joined us, and we hope you feel free to ask us questions. We always enjoy your questions, and we'll look forward to that. Once again, our company has changed a lot since last year's shareholders meeting.
More than ever, I would say that your management team is pleased with our competitive position, we're excited about our growth prospects, perhaps most importantly, we're proud of the work we do every day to save lives of the patients that we serve. There are a number of areas to highlight when we share our story, here are a few of those highlights. NeoGenomics is a leader today in oncology diagnostics, both for the clinical and the pharma markets, both of those markets are growing very nicely. We have significant competitive advantages, not the least of which is our comprehensive test menu, which we believe is the most comprehensive of any company doing work like we are. We have very high levels of customer satisfaction, in fact, that's the reason that we continue to grow very nicely.
You'll see through this presentation, and you've seen over the years, that we're investing in our business and we're investing in our future. We've made considerable investments in our Pharma Services division, in informatics, in our clinical business, and broadening our test menu. I believe today we have a reputation which is very strong for quality and for financial performance. Today, the company is very strong. Most people that know about oncology diagnostic services know about NeoGenomics, and they know about the breadth and depth of our company. You can see some of the stats at the top of this slide. We have 11 locations around the world. We have over 120 MDs and PhDs in our company, and we performed last year approximately one million tests for cancer patients. People also know that today we have two very powerful divisions.
The first is our Clinical Services division, which is the largest part of our company, where we perform testing for oncologists and pathologists and hospitals in the community setting primarily. As I said, we compete primarily on the basis of being a one-stop shop, being able to perform any test, almost any test that can be made available for a cancer patient. On the right-hand side of the page, you can see a description of our Pharma Services division. This is a smaller division, a newer division for our company, and is growing very rapidly. Here we provide support for pharmaceutical companies and biotechnology companies as they develop their drugs, and we perform biomarker discovery for them. We help them with clinical validations, with companion diagnostic testing.
This business is global as opposed to our Clinical Services division, which operates primarily in the U.S. and for the U.S.. Both of these divisions are growing very nicely, and that's partly because our markets are growing. The next slide shows you some of the reasons why our markets are growing. The first reason is that our population is aging, and as we all know, cancer does affect older people more than younger people. Most people recognize that the aging population is going to lead to more testing for companies like NeoGenomics. There are a number of other reasons that our markets are growing. First of all, patients are living longer with cancer. Cancer sometimes is being treated as a chronic disease nowadays, and this requires more testing.
There are also a number of advances, both technologically and medically, which are requiring more advanced testing so that drugs can be better matched to patients for their specific cancer type. Also to support drug development as more drugs are targeted for cancer. The next three charts will demonstrate some of these growth factors I'd like to share with you. The first is really good news for cancer patients, and that's cancer patients are surviving longer. This chart shows the past 45 years, the number of cancer survivors and the projection for cancer survivors for the next 20 years. You can see that it's a lot of really good news. Our therapies, the way we treat cancer is really having an impact.
Suffice to say that as more people are living longer with cancer and surviving cancer, they're requiring more testing and monitoring of their disease as they go through their journey, and this is driving growth in our markets. This next chart is also very interesting. It shows one particular type of cancer, in this case, non-small cell lung cancer, and compares the treatment paradigm in 2006 to the treatment paradigm 10 years later in 2016. You'll notice in 2006, there are very few therapies available for non-small cell lung cancer, and frankly, very few tests available to guide those therapies. In 2016, you can see many therapeutic options, both for first-line treatment and then for advanced cancers, and there are many more biomarkers to guide the most effective application of those therapies.
If we were to construct the same kind of chart for 2020, it would be much, much longer. NeoGenomics has kept pace with this change in therapeutic options and the growth in medical and science and technology applied to cancer by offering nearly every test that can be offered to guide treatment. There are also more good drugs available and becoming more available to treat cancer, and you can see that on this next slide. This is a chart showing spending by drug companies to develop new therapies, and the number is actually quite staggering. In 2020, it's estimated that more than $140 billion will be spent on a worldwide basis to develop new drugs, and our Pharma Services division is helping these drug companies to develop their therapies. These market factors are tailwinds in our business, but we're creating tailwinds of our own.
If you look at some of the things we've done recently, you can see why NeoGenomics has been growing in excess of two times faster than the market growth as a whole. You can see on the left-hand side of this chart, our Pharma Services business is growing very rapidly. I'll show you some detailed charts about this in a minute. We've signed a lot of new contracts recently for our Pharma division, and part of that is driven by a wonderful strategic alliance that we have globally with a contract research organization called PPD. We have a lot of great capabilities in our Pharma division. We're also investing in enhancing our next-generation sequencing capabilities. That's what NGS stands for. We have today very high-quality next-generation sequencing tests for both hematologic and solid tumors.
Just recently, we acquired a division of Human Longevity out in La Jolla, California, to further enhance our next-generation sequencing capabilities. We also are growing because of a phenomenon called companion diagnostic testing. This is an area in which we're partnering with drug companies to make tests available to physicians in combination with a drug. I'll show you and talk a little bit more about this in a few minutes, but we are one of the few companies that can help a pharma company develop a new drug and a companion diagnostic for that drug, and then offer that clinically through our network in our clinical division. We're also continuing to grow because we add managed care contracts and new hospital systems and group purchasing organizations.
Of course, we're continuing to grow as we pursue strategic acquisitions, and that's been a nice source of growth in the past, and we think will be in the future for us. Growth at NeoGenomics has been strong, and we expect it to remain strong. Now, a lot of people ask us, how do we grow in a competitive landscape like we compete in? We have a lot of competitors. This slide attempts to show you how we compete with both the very large clinical reference laboratories, which you'll see portrayed on the left-hand side of this slide. These are very good companies, Labcorp, Quest, Mayo, and others. These companies are very large companies that also perform oncology testing. Then we compete with them, and we compete also with players on the right-hand side of the page.
These are companies that typically have very limited test menus. They'll have tests that are targeted to a particular disease, or they have one type of test platform that they use. We compete with both of these different kinds of players. We compete with the large labs by having the most comprehensive, very focused, one-stop shop for oncology. Since all we do is oncology testing, we think that our focus on that allows us to do that with greater service, and we tend to take market share, or at least have in the past, from the players on the left-hand side of the page because of our focus in oncology. We compete with the players on the right-hand side by being a one-stop shop.
For an oncology practice or for a hospital system, they can use NeoGenomics to do all of their testing, not just next-generation sequencing, but also immunohistochemistry testing, FISH testing, flow cytometry, and everything else. This makes us a very important player for almost all of our customers. You can see in the middle of the page a number of the dynamics which we go to market with, and these have been very powerful and it's allowed us to grow organically quite well, even though the landscape is quite competitive. Now, another way that we compete is we try to provide, frankly, better service than anyone else on this page. You can see that on the next slide 13. We manage our customer satisfaction pretty rigorously at NeoGenomics. We perform two very comprehensive customer satisfaction surveys a year.
This slide shows the results from our last customer survey. I think we had about 1,000 respondents to this survey. You can see that 67% of the respondents rated NeoGenomics a nine or a 10, 26% a seven or eight. I don't know how many of you rate your suppliers, but for me, I get asked this question a lot, whether it's an airline or whatever, how do you rate our service? I tell you, I don't give a lot of nines or tens. This is really important for us. Our customers really like doing business with NeoGenomics, and frankly, this is one of the reasons why we grow. This particular chart is called the Net Promoter Score, and it is descriptive because if one of our customers is rating us a nine or a 10, they are likely promoters of NeoGenomics.
When they go to a pathology show or a meeting with some of their colleagues, it's quite possible that they're saying, "We really like doing business with NeoGenomics." This has been a reason that we've been growing. Now, we're also having good customer satisfaction scores because we have great people at NeoGenomics, and I think we have a strong culture, and we think, frankly, culture is really at the core of who we are and what we do. We are a purpose-driven company. We take our purpose to improve the care of patients very seriously. Our culture is values-based. I think you can tell when you walk through our labs and you meet a NeoGenomics employee that they care. They care about what they do, and I think that's part of the reason that people like doing business with us.
You can see on the right-hand side a timeline, which shows, frankly, our company is still quite young. We're about an 18-year-old company here. We have some significant milestones in our growth and development. I would say, over these 18 years, today, we're stronger than we've ever been before. You'll be able to see that in the next few slides. This slide number 15 is a chart that shows 10 years of growth in our Clinical Services division. I'll orient you to this slide. The blue bars are revenue, and the green line represents the number of tests that we perform. You can see that our Clinical Services division has grown very nicely over this 10-year period. It's been driven by very strong organic growth because partly our customer satisfaction is so high, and we have so many competitive advantages. It's also fueled by two acquisitions.
At the end of 2015, we acquired a company called Clarient, which about doubled the size of this business. In 2018, at the very end of the year, we acquired a company called Genoptix. A fun fact here is that back in 2010, the beginning of this slide here, both Clarient and Genoptix were many times larger than NeoGenomics. Over the course of this time, we acquired both of them. This chart I think is a fun chart for us all to look at. This chart shows growth, but it's not just about growth at NeoGenomics. If you look at the next graph, you can see that we're also focused on profit, and we're also focused on being an efficient producer of the testing that we provide.
This chart shows a track record of our improvement in the unit cost of our tests, average unit cost. You can see that through quality management techniques, through process management, and automation, and other reasons, we've been able to improve the efficiency of our testing process. We've had a lot of success here in reducing our cost per test each and every year. Now, in 2019, you can see an uptick in our cost per test, but this is caused primarily by the acquisition of Genoptix. Genoptix testing came into us with a higher price per test, but also a higher cost per test. I think in the future, we're very focused on driving down continually our cost per test. I would say this is not done, by the way, through layoffs of people.
This is done through good old-fashioned quality improvements, process improvements, volume gains, and automation. Now, the next page is a graph which shows that our Pharma Services division is also growing. In fact, it's growing even faster than the Clinical Services division. I'll orient you to this chart. It shows the last five quarters of activity here, and the tall light blue bars show the backlog. Now, backlog is signed contracts that we have entered into with our customers. You can see at the end of quarter one, we had over $147 million of signed contracts in our backlog. Now, the smaller dark blue bars represent revenue, and the green bars show the number of new signed contracts that we enter into in each quarter.
The key message on this page is that our revenue is going to continue to grow pretty rapidly, we think, because we're signing new contracts at over 2x the pace that we're actually recognizing revenue, and our backlog is very healthy. We believe that there's a lot of growth in the future for our Pharma Services division. Importantly, we're also investing in our business. These are six relatively recent examples of investments that we've made in growth. Our Neo team has coined the phrase "Neo time" because it seems that we do about twice as much as we intend to do in very little time here, and you can see that in this chart. Our Pharma Services division, we've invested in a new lab in Singapore in 2019, and we're now investing in a new lab in China, which should be open in the fall of 2020.
Just in January this year, we acquired the Oncology Division of Human Longevity. It gave us a very nice capability for a whole exome, whole genome sequencing, which is an advanced application of next-generation sequencing. Just four weeks ago, we raised over $300 million in a financing of common stock and debt, which has bolstered our balance sheet very nicely and allows us to pursue some growth opportunities. Just two days ago, we announced that we have invested in and formed a strategic partnership with a company called Inivata for liquid biopsy testing. As we speak, we are bringing up COVID-19 testing, and we're doing this frankly, altruistically to frankly help America return safely back to work. We've begun to do some COVID-19 testing.
We're ramping this up very rapidly, and within just a matter of a few more days, we will have a very large capacity to do COVID-19 testing for our country. We're also investing in capacity through a new headquarters and lab facility that we're constructing as we speak in Fort Myers, and we'll show you some renderings of that in just a minute. Now, there are three specific areas of growth that I'd like to just call your attention to. The first is our investment in growth through next-generation sequencing. We, gosh, late last year, put a considerable amount of time and energy and focus in enhancing our next-generation sequencing capabilities, both for hematologic cancers as well as solid tumors. I think today we have very high-quality tests available here. We have extensive capabilities. We perform more than 30 next-generation sequencing multi-gene tumor-based panels.
We offer these very powerful tests for purposes of making diagnosis, confirming diagnosis, classifying disease, predicting response to therapy, and some of the other things that you see in the middle of this chart. Today, I think by any measure, we're considered to be a leading provider of next-generation sequencing in this country. We're also leaders in something called companion diagnostics. These are tests that accompany drugs and are often required prior to the drugs being prescribed. We do a lot of work in companion diagnostics in our Pharma Services division as we help drug companies in their drug development process. We have the capability to offer companion diagnostic tests through our Clinical Services division. This chart highlights a real success story, but we have a lot of success stories. This success story was a case study in KEYTRUDA.
KEYTRUDA, as you know, is a blockbuster immuno-oncology drug by Merck, and we performed, frankly, a lot of the PD-L1 testing, which is a companion diagnostic test for KEYTRUDA for Merck as they went through their drug development process. Today, I think NeoGenomics performs, we've heard as much as half or more of the PD-L1 testing that's performed in America. We're also investing in informatics as a way to speed companion diagnostic tests and to help drug companies match better patients with clinical trials and patients with exciting therapies that are new and coming into the marketplace. We're also investing quite heavily in our Pharma Services division. This is a very strong and quite unique business in and of itself, although in partnership with our Clinical Services division, it is very powerful indeed. Here we have a lot of breadth and depth of capabilities.
We have very strong scientific leadership in our company. You can see some of the stats at the bottom of the page here. We've grown our backlog very significantly. Our revenue is growing very nicely in this business, and we think that the uniqueness of this business is going to drive growth for NeoGenomics for quite some time. As we end the presentation, I'd like to show you some fun renderings of another investment that we're making. This is a rendering of the new 150,000 square foot lab and admin building that we are constructing as we speak in Fort Myers. I just drove past it on the way to the office this morning. They're putting blocks up and it's very exciting to watch this go up. We're expecting to move into this new lab and headquarters building during the fall of next year, 2021.
This facility is going to allow us to do more testing for East Coast clients in Florida. Right now, we're shipping a lot of that work out to California, so it'll allow us to provide better service for East Coast clients. It creates a lot of capacity for us for future growth. Now, I think some of you know, we're in five separate buildings here in Fort Myers, so it'll allow us to consolidate into one new facility, and we're really looking forward to it. This is another rendering, another perspective of the building. It gives you some sense for the facility. On the right-hand side, you can see our admin headquarters facility, and on the left-hand side of this slide, you can see the lab facility, which will be a two-story facility. We're very excited about this.
I will just summarize by saying, gosh, it's really fun to be at NeoGenomics these days. We're very excited to have grown our company to be really a worldwide leader in oncology testing. As you can tell, we have significant competitive advantages, a lot of strengths. We, I think, have a very good reputation for quality. It's very important to us, and we have a very exciting future here. Thank you for being shareholders, and thank you for listening to this presentation, and we would love to be able to answer any questions that you have.
Thank you. Ladies and gentlemen, if you would like to ask a question at this time, please dial in on phone number 844-800-3452 to get connected by an operator, and then press star one to get into the Q&A queue. The dial-in number on the website is incorrect, so please dial in on phone number 844-800-3452 at this time. You may also type your question in the Ask a Question box located on the website. One moment.
This is one disadvantage, by the way, of a virtual town hall meeting because we always have such great questions from our shareholders. If you can navigate the system, we'd be happy to try to answer whatever questions you have. If there are no questions, I would like to say thank you very much for joining us for this year's meeting of stockholders. We sure hope next year that we can meet in person once again and get to see the familiar faces of investors that have been with us for so long and those also who are new investors in our company. Thank you very much, and please don't hesitate to call us if you have further questions. Goodbye.
Ladies and gentlemen, this concludes today's conference. Thank you for participating, and you may all disconnect. Have a good day.