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NeoGenomics To Snap Up Trapelo Health; Street Says Buy

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Genetic testing and contract research provider NeoGenomics announced the acquisition of Trapelo Health for $65 million. The latter is focused on precision oncology.

NeoGenomics’ (NEO) Chairman and CEO, Douglas M. VanOort said, “The addition of Trapelo to NeoGenomics significantly enhances our ability to provide customers with information to help them answer difficult and complex questions related to precision oncology biomarker testing and treatment options.”

VanOort further added, “We plan to make the Trapelo solution broadly available to providers, payers and laboratories to enable precision oncology to be available across all healthcare settings.”

The total consideration of $65 million includes $35 million in cash and $30 million in common shares of NeoGenomics. The transaction is expected to close in April.

Trapelo’s precision oncology knowledge system captures clinical research results and informs which biomarkers are suitable and need to be tested for each individual patient. Its decision support platform helps healthcare providers in treatment selection as well as achieving efficient workflow. (See NeoGenomics stock analysis on TipRanks)

Last month, Needham analyst Michael Matson gave the stock a Buy rating with a price target of $65 (33.4% upside potential). Matson said, “We believe that NEO is positioned as the leading ‘one-stop shop’ for cancer testing offering a range of types of oncology tests. We expect Neo’s growth to be driven by healthy underlying volume growth, market share gains, and test menu expansion. Neo’s focus, scale, and scope should enable it to sustainably gain market share in cancer testing.”

Turning to rest of the Street, the stock has a Strong Buy consensus rating alongside an average analyst price target of $63.57 (30.5% upside potential) based on 7 Buys and 1 Hold. Shares have rallied about 101.4% over the past year.

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