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    Fulgent Genetics Inc. (FLGT) Rebounds on Agreement to Acquire Inform Diagnostics & Preliminary Q1 Revenue

    By Gule Rukhsar

    Apr 19,2022

    11:57 PM UTC

    On April 18, genetic testing company, Fulgent Genetics Inc. (FLGT) came out with a couple of good news. The company has signed an agreement to acquire pathology laboratory Inform Diagnostics. On top of this, FLGT also said that it now expected Q1 2022 revenue to exceed previous guidance while raising 2022 guidance as well.

    Consequently, the stock rebounded after a loss of 1.55%, to register an increase of 7.58% in the after-hours. Thus, FLGT was trading at a value of $59.45 a share in late trading on Monday.

    Source: Medium

    FLGT’s Acquisition of Inform

    The company through the latest definitive agreement now plans to acquire Inform Diagnostics which is a portfolio company of Avista Capital Partners. Expected to close in the second quarter of 2022, the deal will result in the acquisition of the lab for $170 million in cash.

    Founded in 1996, Inform Diagnostics is now one of the largest national pathology laboratories in the U.S.

    Some of the major plus points of the rationale behind this acquisition include the expansion plan of FLGT, increased geographic reach, and attractive financial position on top of commercial synergies. Moreover, Inform’s philosophy of being a reliable and high-quality provider of pathology services aligns perfectly with Fulgent’s core purpose.

    Q1 2022 Preliminary Results

    The company also provided its preliminary results for the quarter that ended on March 31, 2022. FLGT now anticipates total revenue for the quarter to be roughly $300 million against its previous guidance of $245 million. Moreover, analysts’ estimates revolve around $244.65 million for the quarter. Hence, the new figures not only surpassed the company’s own guidance but also consensus estimates for the quarter.

    The complete financial results for the first quarter of 2022 are expected to be declared on May 3, 2022, along with an earnings conference call.

    FLGT’s Outlook

    Additionally, the company also revised its full-year 2022 revenue and is now looking forward to core revenue of $175 million approx. Earlier the company expected core revenue to be roughly $120 million. This outlook represents the successful acquisition of Inform as per schedule with anticipated revenue contribution from the lab.

    Core revenue excludes revenue from Covid-19 NGS testing.

    Conclusion

    Quick-to-action genetic testing solutions provider after bringing its Covid-19 testing to the market has had a great performance so far. Expanding its business further, the company is now in process of acquiring Inform Diagnostics. This acquisition will lead to a further increase in its revenue. Therefore, the company now looks ahead to another bright year while investors were questioning its growth in the future as Covid-19 began slowing down.

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