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Fulgent Genetics Q1 Revenues Soar on SARS-CoV-2 Testing

NEW YORK — Fulgent Genetics on Thursday after the close of the market posted sharply increased revenues for the first quarter of 2021 as it benefited from high demand for its SARS-CoV-2 testing services.

For the three-month period ended March 31, Fulgent's revenues climbed to $359.4 million versus $7.8 million in the year-ago quarter, topping the Wall Street consensus estimate of $321.5 million. Next-generation sequencing revenue, meanwhile, grew 115 percent year over year to $16.7 million.

The Temple City, California-based company said it delivered roughly 3.8 million billable tests in the quarter, 290 times more than in the same period last year.

"We continued to see strong demand for our RT-PCR-based tests for COVID-19, while our NGS test volumes both for COVID and non-COVID testing ramped nicely in the quarter," said Ming Hsieh, Fulgent chairman and CEO, in a statement. "We were particularly pleased in the first quarter to announce a contract win from the [US Centers for Disease Control and Prevention] for our NGS testing for COVID-19."

In March, Fulgent announced that it would sequence random SARS-CoV-2-positive samples on an ongoing basis under a CDC contract worth up to $47 million that is part of a large-scale national surveillance project.

Elaborating on this contract win in a conference call recapping Fulgent's Q1 earnings, Hsieh said that while the company's RT-PCR COVID-19 testing has "continued to drive sustainable testing volume and cash flow," the CDC contract is an example of how the company is focusing on large-scale opportunities for NGS-based COVID-19 testing.

Brandon Perthuis, Fulgent's chief commercial officer, added during the call that the company generated record NGS growth in the quarter. "Our NGS volume grew 185 percent year over year from 13,000 to 38,000 tests, representing sales of $16.7 million compared to $7.8 million in the first quarter of last year, an increase of 115 percent," Perthuis said. "This growth was driven by our clients beginning to return to a more normal run rate, continued traction in our biopharma business, and our new strategic partnerships with commercial organization."

Fulgent's R&D spending in the first quarter almost tripled to $5.4 million from $2.0 million, while SG&A costs climbed almost fourfold to $13.0 million from $3.6 million.

The company reported a Q1 net profit of $200.7 million, or $6.52 per share, compared with a net loss of $2.0 million, or $.09 per share, in the year-ago quarter. Analysts had, on average, expected earnings of $5.86 per share.

Fulgent ended the first quarter with $151.5 million in cash and cash equivalents, plus $545.9 million in marketable securities.

Looking ahead, the firm said it expects approximately $200 million in revenues for Q2. It also raised its 2021 revenue guidance to $830 million from $800 million, which would represent 97 percent growth over 2020. NGS revenues are expected to be $100 million, compared with previous guidance of $70 million, while the firm anticipates the remaining $730 million to come from RT-PCR-based testing. Earnings are expected to be around $12 per share, and non-GAAP income about $12.50 per share.

"We remain focused on driving momentum in our non-COVID business as vaccinations continue to be administered and we begin to see some return to normalcy in our everyday lives," Fulgent CFO Paul Kim said in the statement. "We are raising our full-year guidance to reflect the strength we are seeing in our NGS business and are optimistic about our positioning as a leader in the next-generation sequencing market."

In morning trading on the Nasdaq, Fulgent's shares were up 3 percent $75.35.