NEW YORK — Fulgent Genetics on Tuesday after the close of the market reported that its revenues for the first quarter of 2022 were down 11 percent due to lower demand for its SARS-CoV-2 testing services.
For the three-month period ended March 31, Fulgent's revenues fell to $320.3 million versus $359.4 million in the year-ago quarter, beating the Wall Street consensus estimate of $270.9 million as well as the firm's preliminary revenue estimate of approximately $300 million.
Separately, Fulgent announced the opening of a new cancer diagnostics lab in El Monte, California. The 25,000-square-foot facility supplements the firm's next-generation sequencing capabilities with immunohistochemistry, flow cytometry, cytogenetic analysis, fluorescence in situ hybridization, and molecular genetics testing and will complement Fulgent's existing pathology lab operations in Alpharetta, Georgia.
Core revenues excluding COVID-19 next-generation sequencing, grew 59 percent year over year in Q1 to $25.1 million.
The Temple City, California-based company said it delivered roughly 3.2 million billable tests in the quarter, down 16 percent from 3.8 million in the same period last year.
On a call with investors to discuss the earnings, Fulgent CFO Paul Kim said that as demand for COVID testing continues to remain volatile and unpredictable, the firm is taking a conservative approach to its expectations from this part of its business.
"We expect to see ongoing declines in our revenue from COVID testing," Kim said. Specifically, Fulgent expects at least $480 million in COVID revenues for the year, he said, which includes $295 million from the first quarter, $85 million in Q2, and $50 million each in Q3 and Q4.
Regarding its recently launched Helio Liver liquid biopsy test for liver cancer, the firm has gained 50 new accounts, which Chief Commercial Officer Brandon Perthuis said "shows enthusiasm for the test and represents execution by our new sales leaders and their team." He also noted that Inform Dx has more than 600 active clients in the gastrointestinal space, which will now be a focal call point for selling Helio Liver.
R&D spending in the first quarter rose 11 percent to $6.0 million from $5.4 million, while SG&A costs more than doubled to $33.7 million from $13.0 million.
The firm has expanded its sales team, in part through the acquisitions of Inform Dx and CSI, Perthuis said. The team now includes 50 people in five subspecialties: pediatric and reproductive health, anatomical pathology, oncology, hepatology, and biopharma. "These teams are currently functioning independently to ramp our recent investments in Inform Diagnostics and CSI, but there are clear synergies across the organization, and we are beginning to take steps to cross-train and integrate the teams across common platforms to maximize efficiency," he said.
The company reported a Q1 net profit of $154.0 million, or $4.93 per share, compared with a net profit of $200.7 million, or $6.52 per share, in the year-ago quarter. Adjusted EPS was $5.08 per share, beating analysts' average estimate of $3.86 per share.
Fulgent ended the first quarter with $353.1 million in cash and cash equivalents, and $725.2 million in marketable securities.
The firm said it expects approximately $125 million in revenues for Q2, including $40 million in core revenues, representing year-over-year growth of 78 percent. It also raised its 2022 revenue guidance to $660 million from $600 million. Core revenues are expected to be $180 million, compared with previous guidance of $175 million.
In Wednesday morning trading on the Nasdaq, Fulgent Genetics shares were down approximately 3 percent at $54.83.