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Fulgent Genetics Q2 Revenues Fall 18 Percent on Declining COVID Business

NEW YORK – Fulgent Genetics reported after the close of the market on Thursday that its second quarter revenues decreased nearly 18 percent year over year despite a doubling in its core non-COVID business revenues amidst challenging macroeconomic conditions.

Separately, Fulgent also announced on Thursday that it has launched an assay to detect monkeypox which leverages a US Centers for Disease Control and Prevention PCR test for orthopox viruses. Monkeypox was declared a public health emergency by the US Department of Health and Human Services on Thursday afternoon. Fulgent will begin accepting specimens for testing from clinicians next week.

For the three-month period ended June 30, Fulgent's revenues fell to $125.3 million from $153.6 million in Q2 2021. The firm delivered 1.3 million billable tests in the quarter, down 18 percent year over year from 1.6 million tests in the year-ago period.

Ming Hsieh, Fulgent's CEO and chairman, said in a statement that the firm saw strong growth in its core business in the second quarter, "while revenue from COVID-19 testing has returned to a more normalized level, as expected." Specifically, the firm's core business revenues doubled to $45.3 million.

Fulgent is in the early stages of integrating its Inform Diagnostics acquisition, Hsieh said, but is seeing "early positive momentum" with the combined business. The firm also continued to gain traction in its oncology testing business with the official opening of its West Coast lab, Hsieh said, while also expanding its sequencing as a service business for biopharma clients.

"With our focus shifted squarely on our long-term core strategy, we are continuing to evaluate ways to capitalize on strategic opportunities and expand our footprint across the genomic testing and therapeutics landscape," Hsieh also said.

The Temple City, California-based genetic testing company posted a Q2 profit of $11.5 million, or $.37 per share, versus a profit of $79.8 million, or $2.59 per diluted share, a year ago. Its adjusted EPS was $.78.

Its R&D spending in the quarter climbed 30 percent to $6.9 million from $5.3 million, while its SG&A costs tripled to $41.1 million from $13.5 million.

Fulgent ended the quarter with cash and cash equivalents of $138.8 million and investments in marketable securities totaling $792.2 million.

Fulgent guided for third quarter revenue of approximately $105 million, with core revenue of approximately $54 million, which would represent growth of more than 100 percent year over year. For the full year 2022, Fulgent Genetics expects total revenue of approximately $665 million, core revenue of approximately $185 million, and non-GAAP income of approximately $6.00 per share.