Creating a New Paradigm in Precision Medicine for The Company
Fulgent Pharma Holdings, Inc., an independent clinical-stage, therapeutics development company focused on the development of cutting-edge cancer treatments, has been acquired by Fulgent Genetics, Inc., a technology-based genetic testing business focused on transforming patient care in oncology, infectious and rare diseases, and reproductive health. According to the terms of the contract, Fulgent Genetics bought Fulgent Pharma for an estimated $100 million, subject to revisions, to be paid for by a combination of cash on hand and shares of Fulgent Genetics common stock.
In order to tackle cancer, the combined company intends to provide a vertically integrated approach that might open up considerable long-term upside for both the therapeutic and diagnostic sectors while successfully managing risk. Prior to 2016, when the companies were split up in preparation for Fulgent Genetics’ Initial Public Offering, Fulgent Pharma and Fulgent Genetics were both owned by Fulgent Therapeutics. Since 2016, the businesses have operated as distinct entities, allowing each to concentrate on and accomplish its primary goals in the areas of genetic testing and the development of therapeutic drugs.
With the recent purchases of CSI Laboratories and Inform Diagnostics and the opening of a cutting-edge oncologic testing facility in southern California, Fulgent Genetics has significantly increased its presence in the sizable market for molecular diagnostics and oncologic testing over the past year. A unique nanoencapsulation and targeted therapy platform created by Fulgent Pharma is intended to enhance the therapeutic window and pharmacokinetic characteristics of both newly developed and current cancer medications. Fulgent Pharma believes that its lead drug candidate, FID-007, has demonstrated proof-of-concept in early human clinical trials for the treatment of various cancer types, including head and neck, ampullary, pancreatic, non-small cell lung cancer (NSCLC), and breast cancer. This belief is based on recent studies and pre-established criteria.
“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”, “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.”
Ming Hsieh, Chairman and CEO of Fulgent Genetics and co-founder of Fulgent Therapeutics
“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”, “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.”
Ray Yin, PhD., President and Chief Scientific Officer of Fulgent Pharma and co-founder of Fulgent Therapeutics
Strategic Focus
Lead therapeutic candidate FID-007, a promising candidate, and nanotechnology:
The primary initiative of Fulgent Pharma, FID-007, is a proprietary nanoencapsulated paclitaxel formulation created to enhance the drug’s overall solubility profile. Data from research carried out to date indicate that paclitaxel nanoencapsulation may enhance the biodistribution and bioavailability to target tissues. These data also show a positive profile and suggest prospective uses in a variety of indications, such as head and neck, ovarian, lung, breast, and pancreatic cancers.
Expanded Market Opportunity:
FID-007 is currently being developed for Head & Neck (H&N) cancer treatment in the second and third lines, with a potential target market opportunity of $2.2+ billion. The business believes there are still prospects in major, multibillion-dollar markets for NSCLC, pancreatic, breast, and ovarian cancers, where current treatments are insufficient.
Strategic and operational synergies:
The combination of therapeutic candidates and diagnostics expertise has the potential to create long-term value and is aimed at providing a comprehensive oncology-focused solution that enables precision medicine through internal or joint therapeutics programmes supported by genetic data insights. Additionally, the combined businesses benefit from the exceptional scientific experience of Fulgent Pharma’s team, which gives it a competitive edge in the cancer sector.
Enhanced Commercial Profile:
After development is finished and regulatory approval has been granted, the combined business will be in a better position to serve as a “one-stop shop” for the entire life sciences supply chain and to reach Fulgent Genetics’ expanded customer base thanks to its expanding sales team.
Attractive Capital Allocation Plan:
It is anticipated that the development of Fulgent Pharma’s R&D pipeline will be supported by Fulgent Genetics’ solid balance sheet and cash flows from operations. The success of Fulgent Genetics’ integration of acquisitions, strategic alliances, and focused execution has been crucial to the company’s expansion. The goal of this transaction is to support Fulgent Genetics’ plan to increase shareholder value over the long run through both organic and inorganic initiatives in the genomics and, under the assumption of necessary regulatory clearances, pharmaceuticals business segments.
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