$1.7B to fight Covid variants

Earlier this morning, on the paid MF Fulgent Genetics board, I posted a Seeking Alpha article which discussed the recently won CDC contract for genomic sequencing of Covid variants.


Interestingly enough (to me, at least), just after making that post of the Seeking Alpha article about FLGT and the CDC contract it recently won, the White House just announced a $1.7B investment to fight Covid-19 variants. Here is the White House press release:


That amount will be broken down as follows:

- $1 billion to expand genomic sequencing

- $400 million to support innovation initiatives including the launch of new innovative Centers of Excellence in Genomic Epidemiology

- $300 million to build and support a National Bioinformatics Infrastructure:

From what I have read, it sounds like Fulgent had the largest CDC variant contract to date, so I’m hoping they will also be able to lock up a good portion of these new funds. Here is another interesting line from the release:

“Today’s funding, allocated through the Centers for Disease Control and Prevention (CDC), will help the CDC, states, and other jurisdictions more effectively detect and track variants by scaling genomic sequencing efforts.”

To me at least, this again leans toward FLGT being a potential major beneficiary of these funds as the CDC has already selected them previously to receive the largest of their variant sequencing funds to date.

At this time, this is all speculation on my part that FLGT will be a major recipient of these funds, but it doesn’t take much imagination to see how this could play out in FLGT’s favor.

I will also point out that the largest amount of the initial funds going to states (in early May) is going to California (not surprising as it’s the most populous state), but CA also happens to be FLGT’s stronghold, as they’re based in LA and have many large contracts there.

For me, this is just a huge potential upside, as I already own a fairly large holding of FLGT based on their current (and I think continuing) Covid business numbers, and their underlying core business alone! So I will continue holding them for those reasons, but if my suspicion here turns out to be correct, it could provide a huge boost to FLGT.


What about Illumina (ILMN)?