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Fulgent Genetics Makes $19M Investment in Chinese JV, Takes Controlling Interest

NEW YORK — Fulgent Genetics said on Monday that it has made a roughly $19 million investment in FF Gene Biotech, giving it controlling ownership of the Chinese genetic testing joint venture.

Fulgent formed FF Gene Biotech in 2017 with Xilong Scientific and Fuzhou Jinqiang Investment Partnership in order to establish a presence in China for its sequencing-based genetic testing services, with a focus on the cancer, reproductive health, and pediatric markets.

In a recent filing with the US Securities and Exchange Commission, Fulgent said that it has, to date, contributed $4.5 million in equipment to FF Gene Biotech but determined that the joint venture lacks the capital necessary to operate independently.

Following its latest investment in FF Gene Biotech, Fulgent said it intends to increase testing capacity at the joint venture's Fujian-based facility and expand its sales organization. Fulgent noted that since it was formed, FF Gene Biotech has generated revenues of more than $10 million on test volume of more than 50,000.

Fulgent also said that it will now recognize the financial impact of FF Gene Biotech within its consolidated financial results. The transition is expected to close in the second quarter.

"Our incremental investment in FF Gene Biotech is an important strategic milestone for Fulgent Genetics as we look to expand our presence on the ground in China," said Ming Hsieh, Fulgent's chairman and CEO, in a statement. "We see a significant market opportunity for NGS testing in China, and we believe that our differentiated approach to testing with our scalable technology platform, efficient lab operations, expansive test menu, and superior customer service will make us well positioned to capitalize on this opportunity."

Earlier this month, Temple City, California-based Fulgent reported strong first quarter revenue growth on demand for its SARS-CoV-2 testing services.