Just as its record testing run for Covid-19 appears to be tapering off, Temple City-based Fulgent Genetics Inc. has added testing for another virus currently making headlines: monkeypox.
On Aug. 4, Fulgent announced that as of the following week, it would begin accepting specimens for testing for the monkeypox virus. The announcement said Fulgent’s test is based on the U.S. Centers for Disease Control and Prevention’s (CDC) orthopoxvirus test, which detects non-smallpox orthopoxviruses, including monkeypox.
“We are pleased to be able to offer PCR-based testing for monkeypox to help increase testing capacity for the virus, making it more convenient and accessible for patients and health care providers in the United States,” Brandon Perthuis, Fulgent’s chief commercial officer, said in the announcement.
Perthuis acknowledged that “demand for the test will be hard to predict.” That’s largely because future testing recommendations for the monkeypox virus remain uncertain.
But the monkeypox virus has spread faster than expected and it’s possible those testing recommendations will expand if that trend continues.
In an earnings teleconference call with analysts later on Aug. 4, Perthuis gave more insight on why Fulgent decided to begin offering monkeypox testing.
“Certainly, the revenue would be there,” Perthuis said in the call. “But we also want to help. We realize that testing for monkeypox has been restricted; (there are) not a lot of options.
There have been a few labs that have launched tests. With our technology and platform,we were able to get this going pretty quickly … and did a good thorough validation. And we can leverage the Covid-19 platform we built from ordering and reporting, our barcode system, and our drive thru (sites).”
Investors were not moved by this new monkeypox testing offering. They were more focused on revenue and test volume numbers in the second-quarter earnings report also released on Aug. 4.
That report showed second-quarter revenue down 18% to $125 million and test volume down 18% to 1.3 million from the same quarter last year.
Company founder and Chief Executive Ming Hsieh stated that the Covid testing surge that took Fulgent from a $32 million revenue company three years ago to just under $1 billion last year is winding down.
Furthermore, the company issued refined revenue guidance for the full year of $665 million, down roughly one-third from last year’s $993 million.
Investors sent Fulgent shares down 20% over the next three trading sessions to a low of $50.10 on Aug. 9. The share price has rebounded slightly since then, closing at $53.26 on Aug. 15.
With Covid testing revenue now tailing off as the pandemic wanes, attention is focused on Fulgent’s other offerings, which it terms its “core revenue.”
That portion of Fulgent’s revenue base doubled to $45 million in the second quarter, compared to the same quarter last year.
These non-Covid test offerings include home-based genetic screening kits, services for pharmaceutical companies and lab analyses for clinician offices.
In April, Fulgent agreed to buy Irving, Texas-based Inform Diagnostics Inc. from New York private equity firm Avista Capital Partners for $170 million in cash. That deal closed toward the end of the second quarter.
With Inform Diagnostics now fully integrated into Fulgent, the company this month launched an oncology division that will offer a suite of specialized testing products under the brand name Lumera.
The “flagship test,” Perthuis said, will apply a profile of more than 500 separate genes to a patient’s genetic specimen to look for certain gene signatures that are flagged for specific types of cancers, such as HER2 breast cancer.
