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Fulgent Genetics Q3 Revenues Increase Almost Tenfold on Coronavirus Testing Demand

NEW YORK – Fulgent Genetics reported after the close of the market on Monday that its third quarter revenues rose almost tenfold year over year, driven by demand for its COVID-19 tests.

For the three-month period ended Sept. 30, the Temple City, California-based company posted revenues of $101.7 million compared to $10.3 million a year ago, more than double the average Wall Street revenue estimate of $48.5 million.

Fulgent said that the number of billable tests delivered in the quarter grew to approximately 1.04 million, up from 20,697 in Q3 2019.

The firm's third quarter results demonstrate the scalability of its technology platform for genetic testing, Fulgent Chairman and CEO Ming Hsieh said in a statement.

"As the COVID-19 pandemic continues to threaten both our health and our way of life, we have been relentless in scaling our testing capabilities to offer fast, accurate, and reliable COVID-19 testing solutions for commercial organizations, municipalities, universities, and individuals across the country," Hsieh added.  

In addition to technology investments, the relationships the firm has built during this pandemic "from both a customer and reimbursement standpoint, along with the expansion of our commercial capabilities which includes our at-home platform, Picture Genetics, will help drive our business in the years ahead," he said.

In a conference call to discuss the company's financial results, Hsieh said that in the past, most of Fulgent's customers paid cash for testing.

"Given our rapid expansion in new customers [and COVID-19] test volume we should now exceed one million tests [per quarter]," he said. "This has accelerated the ease of [obtaining] reimbursement agreements with insurance providers. We believe that having these reimbursement agreements in place will continue to drive business from customers in a way that we haven't seen prior to the pandemic."

Hsieh added that he welcomed "the news of the very promising vaccine development from Pfizer" on Monday.

The drug maker and its partner BioNTech said that in an early analysis of a clinical trial, the coronavirus vaccine was highly protective in participants without prior evidence of SARS-CoV-2 infection.

Hsieh noted that Fulgent invested $2.5 million dollars in Boston Molecules during the third quarter, which could enable it "to develop an enhanced neutralizing antibody test for COVID-19 immunity, especially for people who get the vaccine [and for] patients who have recovered from COVID-19."

Fulgent Chief Commercial Officer Brandon Perthuis said on the call that the firm has a maximum capacity to produce 60,000 COVID-19 PCR tests per day and could quickly scale up to produce 80,000 test per day, or more if needed.

He added that its Picture Genetics COVID-19 test, authorized for at-home sample collection, was "instrumental in its growth" this quarter.

"We are one of a limited number of providers with this approval, and at-home testing is proving to be a differentiator and important testing tool to help in the fight against this pandemic," Perthuis said.

Further, Fulgent has applied for EUA for a next-generation sequencing-based COVID-19 test that is pending approval, he added.

Fulgent posted a net income of $46.6 million, or $1.98 per share, compared to $1.5 million, or $.08 per share, in Q3 2019. On an adjusted basis, the company reported an EPS of $2.08, beating analysts' average estimate of $.55 per share.

R&D spending in the quarter rose 88 percent to $3.2 million from $1.7 million a year ago, while SG&A costs almost tripled to $8.8 million from $3.2 million.

Fulgent finished the third quarter with $53 million in cash and cash equivalents, and $50.9 million in marketable securities.

In the fourth quarter of 2020, the company expects to generate revenues of at least $110 million. For full year 2020, it now expects revenue of $235 million, up from its previous guidance of $135 million.

Fulgent Genetics shares were down more than 22 percent to $31.01 at the end of the trading day on Monday following news about the coronavirus vaccine.

Its shares were up more than 10 percent to $34.11 in Tuesday morning trading on the Nasdaq.