For medical test manufacturer Fulgent Genetics Inc (FLGT) the coronavirus pandemic has become a big growth force. The biotech company was able to adapt its platform rapidly to build COVID-19 tests, leading to triple-digit sales growth.
One of the biggest beneficiaries of the high demand for testing has been Fulgent Genetics. The company’s revenue came increasing 880 percent year-on-year in the third quarter. Management increased its full-year growth outlook to $300 million based on these findings. However as reports of the imminent release of the COVID-19 vaccine became more regular, the investment in Fulgent Genetics was considered less appealing by many investors. After the vaccine success news, company’s shares dropped 16 percent during the final week of the last month but have recovered with a gain of 7.19 in the past 5 session last week.
Most likely, the market for testing will continue for many more quarters, even after the COVID-19 vaccine is available. In a week, the pandemic will not subside, and many businesses and government agencies will continue to test people periodically until the outbreaks finally vanish. It is possible that routine monitoring will continue until 2022. This means that Fulgent Genetics’ new main product is going to sell well while growth is unlikely to be triple-digit.
The key benefit of Fulgent Genetics, however, is not so much a coronavirus test, but a promising platform that allows users, if appropriate, to build a test for other types of diseases relatively quickly. Fulgent Genetics currently provides tests for 5,700 genetic markers and has tools to develop new product lines as well. The pandemic, in general, increased Fulgent Genetics’ exposure and allowed the business to attract a large number of new customers. In reality, Fulgent has built an enterprise software framework that will be extended to support flu vaccination, using large corporations, government departments, and hospital systems to handle testing and vaccination data.
Fulgent Genetics Inc (FLGT) was up 2.09% at the ring of the bell on Friday to $43.55.