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Fulgent Genetics Revenues More Than Double in Q2, Driven by COVID-19 Testing

NEW YORK – Fulgent Genetics reported after the close of the market on Tuesday that its second quarter revenues more than doubled, driven by multiple types of tests to detect COVID-19.

For the three-month period ended June 30, Fulgent's revenues grew to a record $17.3 million from $8.4 million in Q2 2019, handily beating the average Wall Street analysts' estimate of $10 million. The number of billable tests delivered during the quarter grew over tenfold year over year to 180,513 tests.

"Our second quarter results illustrate how we quickly applied our technology to the needs of today, organically developing and launching multiple tests to detect COVID-19 with Emergency Use Authorization from the [US Food and Drug Administration], including an at-home test offered through Picture Genetics, our patient-initiated product," CEO Ming Hsieh said in a statement. "These offerings have attracted major new customer accounts, resulting in an inflection point in our business and outlook."

On a conference call following the release of the results, Hsieh noted that testing volume from its core genetic testing business was flat compared with Q1 2020. The firm's US business remains its most significant source of revenue, accounting for 93 percent of revenues, CFO Paul Kim added. During the quarter, US revenues grew 141 percent year over year. COVID-19 testing accounted for approximately 60 percent of revenues, the "vast majority" from RT-PCR tests for SARS-CoV-2, Kim said.

The Temple City, California-based genetic testing company posted a Q2 profit of $3.3 million, or $.14 per diluted share, versus a net profit of $331,000, or $.02 per diluted share, a year ago. Its adjusted EPS was $.17.

R&D spending in the quarter grew 13 percent to $1.8 million from $1.6 million, while SG&A costs jumped 72 percent to $5.1 million from $2.9 million. Kim said the firm had already recouped its investment in COVID-19 testing research and development. Company officials noted that the firm has doubled its headcount over the last several months to more than 300.

At the end of June, Fulgent had cash and cash equivalents totaling $2.4 million, and $63.9 million worth of marketable securities.

"Traditional genetic testing orders rebounded in June and July and are on track for growth in the second half of 2020," Kim said in a statement. On the call, he said the firm projected test volumes of more than 1.3 million tests for fiscal year 2020, translating to more than $120 million in total revenues, and adjusted income of approximately $25 million, or about $1 per share.

Company officials noted that they had recently agreed to purchase an additional property in El Monte, California, for $15.4 million in cash. When built out, the facility should be able to handle approximately 50,000 tests per day, compared to their current Temple City location, which can handle approximately 30,000 tests per day.

In Wednesday morning trading on the Nasdaq, shares of Fulgent were trading up 24 percent at $36.82.

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