CGIX Pitch Deck Teardown: Scaling Oncology Diagnostics

CGIX Investor Presentation: A Deep Dive into Oncology Diagnostics

The November 2015 investor presentation for Cancer Genetics Incorporated (NASDAQ: CGIX) represents a company in a high-growth, high-burn phase. The deck is structured to convince institutional investors that CGIX is the essential link between laboratory research and clinical application in the oncology sector. By focusing on its relationships with 'Big Pharma' and its proprietary diagnostic panels, the company attempts to build a narrative of inevitable market dominance in precision medicine.

Slide 1: Title and Positioning

The cover slide establishes the core brand identity: "The Oncology Diagnostics Partner from Bench to Bedside." It clearly identifies the company as a NASDAQ-listed entity (CGIX) and dates the presentation to November 2015. The imagery of genetic sequencing data reinforces the technical nature of the business.

Slide 7: Strategic Positioning

This slide outlines five pillars of the company's strategy: Global Footprint, Proven Disease Specific Capabilities, Comprehensive & Platform Agnostic technology, Rx/Dx/CDx Expertise, and a Highly Skilled Sales Force. The central message is that CGIX is "uniquely positioned to address macro-trends in oncology," specifically the shift toward biomarker-driven clinical trials and genomic testing adoption.

Slide 11: Biopharma Relationships and Revenue Growth

This is one of the most critical slides in the deck for establishing commercial traction. It states that CGIX has contracts with 7 of the top 10 biopharma companies and is supporting 70+ clinical trials . The revenue chart shows an aggressive upward trajectory:

2012: $0.6M · 2013: $2.7M · 2014: $5.6M · 9 months 2015: $8.6M

Crucially, the slide notes >$30M+ in anticipated future revenues from signed contracts, providing a forward-looking metric to justify the current valuation.

Slide 15: Multiple Myeloma NGS Panel

CGIX focuses on Multiple Myeloma as a key market opportunity. The slide notes there are ~230,000 cases worldwide and that lifetime therapy costs range from $120,000 to $240,000. The solution presented is a "highly targeted 88 gene panel design" developed to reduce the complexity of diagnosis and identify new druggable targets. The slide mentions that the panel will license to Mayo and CGI for clinical offering, indicating a partnership-led distribution model.

Slide 19: FHACT Cervical Screening Workflow

This slide addresses the diagnostic gap in cervical cancer screening. It highlights that out of 55M Pap smears, 3.5M are unclear/abnormal, leading to 2M procedures. The FHACT test is positioned as a triage tool to reduce unnecessary colposcopies. The company claims a 94% Sensitivity & Specificity based on a 199-patient study presented at HPV 2015. This slide is effective because it quantifies the "Problem" (unnecessary procedures) and the "Solution" (non-invasive triage).

Slide 23: Revenue Mix and Diversification

This slide visualizes the shift in the company's business model. In 2014, Biopharma was 55% of the revenue; by the first nine months of 2015, it grew to 69% . The Clinical segment dropped from 43% to 26%, while Discovery remained a small fraction (5%). This indicates that the company's growth engine is firmly rooted in corporate partnerships rather than direct-to-clinic sales. It also mentions the acquisition of Response Genetics, which expanded their testing capabilities to 8 of the top 10 cancers.

Slide 27: Summary Statement of Operations

The financial slide provides a transparent look at the company's P&L. Revenue for the 9 months of 2015 was $12.556M , compared to $6.164M in the prior year. However, the operating loss also increased to $14.201M . The balance sheet shows $19.918M in cash , which, given the net loss of $11.6M (excluding non-cash items), suggests a runway of approximately 12-15 months without further financing or significant revenue acceleration.

Slide 31: Future Milestones

The company sets expectations for the coming quarters across four categories: Biopharma Partnerships, Additional Studies, Payer Contracts, and NGS Panel Launches. Specific goals include launching panels for renal and hereditary cancers and securing agreements for FHACT and TOO panels. This slide serves as a checklist for investors to monitor management's execution in the near term.

Slide 34: Global Infrastructure

The final slide lists the company's physical locations, emphasizing its global reach. With headquarters in Rutherford, NJ, and additional sites in Raleigh, Los Angeles, Hyderabad (India), and Shanghai (China), CGIX presents itself as a multinational operation capable of supporting global clinical trials for pharmaceutical clients.

What Works in This Deck

1. Strong Traction Metrics: The inclusion of the "7 of the top 10 biopharma companies" metric is a powerful validator. It tells investors that the largest players in the industry trust CGIX's technology.

2. Clear Market Segmentation: By breaking down the revenue into Biopharma, Clinical, and Discovery, the company makes its business model easy to understand. The shift toward Biopharma (Slide 23) shows a clear strategic direction.

3. Scientific Validation: Mentioning specific studies (HPV 2015) and sensitivity/specificity percentages (94%) provides the technical evidence required for a biotech investment.

What is Missing

1. Unit Economics: While the deck shows gross margins (26% in 2015, up from 13% in 2014), it does not detail the cost per test or the specific pricing strategy for its NGS panels. This makes it difficult to assess the long-term path to profitability.

2. Competitive Landscape: The deck lacks a dedicated competitor slide. In 2015, the oncology diagnostics space was becoming crowded with players like Foundation Medicine and Guardant Health. CGIX does not explicitly state how its 88-gene panel differs from competitors' offerings.

3. Management Team: The 9 slides provided do not include a team slide. For a public company, the experience of the C-suite and the scientific advisory board is a major factor in investor confidence.

Founder Takeaways

Focus on the 'Backlog': If you are a B2B startup, highlighting "anticipated future revenues from signed contracts" (Slide 11) is a great way to show momentum that hasn't hit the P&L yet. It de-risks the investment by showing a guaranteed floor for future growth.

Solve a Workflow Problem: Slide 19 (FHACT) is a masterclass in showing where a product fits into an existing medical workflow. Don't just say your test is better; show how it prevents unnecessary steps (colposcopies) in the current system.

Transparency in Losses: CGIX didn't hide its $14M loss. By putting it right next to the 100%+ revenue growth, they framed the loss as an investment in scaling a high-growth engine. If you are burning cash to grow, own the numbers and explain the ROI of that spend.