Another significant contract win by Fulgent Genetics (FLGT), this time with the CDC…
https://www.globenewswire.com/news-release/2021/03/15/219315…
Some key points…
TEMPLE CITY, Calif., March 15, 2021 (GLOBE NEWSWIRE) – Fulgent Genetics, Inc. (NASDAQ: FLGT) (“Fulgent Genetics” or the “Company”), a technology company providing comprehensive testing solutions through its scalable platform, today announced that the U.S. Centers for Disease Control and Prevention (“CDC”) has awarded the Company a contract to provide genomic sequencing of samples of SARS-CoV-2 on an ongoing basis, leveraging the Company’s Next Generation Sequencing (“NGS”) capabilities.
Fulgent will leverage its NGS platform and provide sequencing data to the CDC as part of their initiative to conduct a large-scale genomic survey of the virus using random samples from across the United States. Ultimately, the CDC believes this large-scale genomic survey of the virus can provide important baseline information for national and state-level virus surveillance, help define important changes in transmission, help to identify unusual or emerging variants, and ultimately improve the public health response to the virus.
Fulgent believes its position as a leading provider of COVID-19 testing solutions, combined with the Company’s ability to handle large volumes of samples on its NGS platform, make the Company uniquely suited to aid the CDC in this initiative. Fulgent was selected as a partner due to its access to samples, laboratory capabilities for processing and sequencing of these samples, ability to manage the significant amount of data collected, and ability to deliver data to the CDC under the strict specifications they require.
(Bolding was mine.)
For anyone who doesn’t know what Fulgent is/does, here was my brief writeup on Fulgent’s 4th quarter and year end results (nothing short of phenomenal). In there you’ll also find a link to a previous writeup with more details on their recent numbers.
https://discussion.fool.com/fulgent-genetics-blowout-34769526.as…
So even after a 4th quarter that showed over 3400% YOY revenue growth, and a 2020 full year that showed 1200% YOY revenue growth, they still guided to 2021 full year adding another 90% growth on top of that. And of that, their NGS testing (which this contract would be a part of) was guided to a 92% growth estimate for 2021. And that was before this new CDC contract news, and did not include the last large contract announcement, either. It’s here if you missed it…
https://www.prweb.com/releases/federal_resources_awarded_2b_…
Fulgent partnered with Federal Resources to be one of four contract winners to share in a $2 billion (with a B!) contract over the next 5 years for Covid testing (1 base year, with 4 additional 1-year options). And this contract was also not included in the above mentioned 90% guidance.
And so while the fear is that their revenue will drastically reduce to near pre-Covid levels as vaccinations are deployed, and the economy reopens, I think these recent contract wins belie those fears, as they show that Fulgent is one of the top testing company’s around, and that Covid testing is NOT going to go away anytime soon. Yes, the mass drive-thru vaccination locations will drop over time, but as companies, schools, gov’t agencies, travel, gatherings, etc, start to reopen, they all will need continued testing to keep their students, employees, etc, in a safe environment. Fulgent has fundamentally changed what their business can do to provide that safety and peace of mind, as they’ve also showed they are a top pick for NGS testing to be able to identify unusual or emerging variants.
They’ve earned a mid to large size position in my portfolio.