In 2016, in an effort to better focus business priorities, Fulgent Therapeutics separated into pure-play diagnostics and therapeutics companies Fulgent Genetics and Fulgent Pharma. Yesterday, after six years of honing their business models, publicly traded Fulgent Genetics announced it was acquiring Fulgent Pharma for $100 million to create a vertically integrated precision medicine company aimed at bolstering both diagnostic and therapeutic development operations.
“This acquisition advances our mission to build a holistic platform to provide comprehensive solutions and services across the cancer care continuum, including early detection, diagnostics, and monitoring, as well as drug discovery and development,” said Ming Hsieh, chairman and CEO of Fulgent Genetics and a co-founder in 2011 of Fulgent Therapeutics. “With my commitment and our teams already in place, the combination of these two businesses diversifies our assets and will, we believe, provide sustainable future revenue and margin opportunity through a potentially lucrative target oncology market.”
Fulgent Genetics has been an active acquirer as it has built out its menu of cancer testing options, while also expanding geographically. In late 2021 it acquired Alpharetta, GA-based CLIA/CAP reference lab CSI Laboratories and its menu of more than 400 tests leveraging an array of technologies including flow cytometry, cytogenetic analysis, fluorescence in-situ hybridization (FISH), immunohistochemistry, molecular genetics and next-generation sequencing (NGS). Earlier this year it spent $170 million to acquire Inform diagnostics, further expanding its test menu and adding labs in New York, Arizona, Massachusetts, and Texas.
Now, with the acquisition of Fulgent Pharma, the company is spreading its wings into the therapeutic arena as it looks to further the commercialization of Fulgent Pharma’s novel nanoencapsulation and targeted therapy platform, which the company says improves the therapeutic window and pharmacokinetic profile of new and existing cancer drugs.
The combined company foresees a $2.2 billion market opportunity for its lead candidate, FID-007, which is currently being developed for second and third line treatment of Head & Neck (H&N) cancer, as well as additional opportunities for the drug candidate in non-small cell lung cancer (NSCLC), pancreatic, breast, and ovarian cancers.
Management at Fulgent is keen to develop a comprehensive precision oncology company that can combine both therapeutic and diagnostic expertise to inform both in-house and partnered therapeutics programs leveraging its broad line of testing assays to deliver genetic insights of the drivers of cancer.
Further, the company noted that its strong balance sheet and operational cash flows can be used to help drive further development of Fulgent Pharma’s other development programs.
“In addition to FID-007, our proprietary nano-drug delivery platform has generated a deep pipeline of wholly owned drug candidates, focused on additional target cancer indications, including one for colon cancer and one NCE (new chemical entity) targeting the STING pathway. Both have been tested extensively in preclinical studies,” said Ray Yin, PhD, president and CSO of Fulgent Pharma and another co-founder of Fulgent Therapeutics. “Through this acquisition, Fulgent Pharma will have access to commercial relationships across the oncology market as well as capital to fund research, development and, assuming the requisite regulatory approvals, commercialization as part of Fulgent Genetics.”