Fulgent Genetics, Inc. Q4 FY2024 earnings call

Ming Hsieh noted growth in the laboratory services business in 2024 and progress in the therapeutic development business, including a phase two clinical trial of FID-007 in head and neck cancer with 17 patients dosed and plans to publish at ASCO 2025, and FID-022's investigational new drug application cleared by the FDA in January 2025. Brandon Perthuis highlighted laboratory services performance: anatomic pathology had 9% sequential growth due to revised go-to-market plan, precision diagnostics had 23% year-over-year growth with new products like Exome and GenomeRise, and biopharma services had 56% quarter-over-quarter growth. Operational efficiencies were achieved through lab relocations. Paul Kim discussed financials, share repurchases, balance sheet strength, and provided 2025 guidance.

In 2024, full-year core revenue (excluding COVID-19 revenue) totaled $281.2 million. Precision Diagnostics contributed $168 million (approximately 59.78% of core revenue), anatomic pathology $97 million (approximately 34.51%), and biopharma services $16 million (approximately 5.71%). For the fourth quarter of 2024, revenue was $76.2 million, with core business revenue at $76 million. GAAP gross margin was 41.8% and non-GAAP was 44.2%. For 2025, the company guides to core revenue of approximately $310 million, representing 10% year-over-year growth. Precision Diagnostics is expected to be $187 million, anatomic pathology $106 million, and biopharma services $17 million.

The company guides to core revenue of approximately $310 million for 2025, representing 10% year-over-year core growth. Expect growth in all core business areas. Therapeutic development business is expected to have a cash burn of approximately $25 million in 2025. Anticipated revenues for 2025 from Precision Diagnostics, anatomic pathology, and biopharma services are $187 million, $106 million, and $17 million respectively. Non-GAAP gross margins expected to slightly exceed 40% in 2025, while non-GAAP operating margin is expected to be around minus 15%.

Business performance may be affected by seasonality as anatomic pathology services depend on healthcare providers. Biopharma services are variable due to dependence on pharmaceutical partners. Uncertainties in new business partnerships like with Foundation Medicine and VA hospitals not being fully baked into the 2025 guidance. Adverse weather events can impact operations.

Q: David Westenberg asked about key milestones for FID-007, trial cost, and ASCO expectations, and head and neck opportunity.

A: Ming Hsieh responded that the trial cost is around $10 million to enroll 46 patients, preliminary results with FID-007 in combination with cetuximab are promising, and head and neck is a key opportunity.

Q: David Westenberg inquired about Q4 14% year-over-year growth and slowdown in 2025.

A: Brandon Perthuis stated no one-time events in Q4, but Q1 2025 may be down due to healthcare benefit resets and adverse weather, with seasonality affecting anatomic pathology.

Q: Liu Li asked about guide upside from VA and Foundation partnerships.

A: Brandon Perthuis replied that new wins like Foundation Medicine are not in the 2025 guide yet as they are not fully baked, but there could be potential upside.

Q: Andrew Cooper asked about precision diagnostics growth levers and AP business turnaround.

A: Brandon Perthuis and Ming Hsieh responded that new partnerships and operational efficiencies are growth levers, and the AP business has turned around with technology investments and sales team efforts.