Fulgent Genetics, Inc.

Hello, and welcome to the Fulgine Genetics Q3 2022 earnings conference call. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Melanie Solomon, Investor Relations. Please go ahead.

Good afternoon, and welcome to the Fulgen Genetics third quarter 2022 financial results conference call. Today, we will also be discussing the acquisition of Fulgen Pharma, announced after the markets closed in a separate press release. On the call are Ming Hsieh, Chief Executive Officer of Fulgen Genetics, Paul Kim, Chief Financial Officer of Fulgen Genetics, Brandon Perthews, Chief Commercial Officer of Fulgen Genetics, Lawrence Weiss, Chief Medical Officer of Fulgen Genetics, and Dr. Ray Yin, President and Chief Scientific Officer of Bulgin Pharma. The company's press release discussing these two announcements are available on the Investor Relations section of our website, bulgingenetics.com. The webcast portion of this call contains a slide presentation that we will refer to during the call. Those following along on the phone who wish to access the slide portion of this presentation may do so on the Investor Relations section of our website. For those who have access to the streaming portion of the webcast, please be aware that there may be a few seconds of delay and that you will not be able to pose questions via the web. A replay of this call will be available shortly after the call concludes on the investor relations section of the company's website. Management's prepared remarks and answers to your questions on today's call will contain forward-looking statements. These forward-looking statements represent management's estimates based on current views and assumptions, which may prove to be incorrect. As a result, matters discussed in any forward-looking statements are subject to risks, uncertainties, and changes in circumstances. that may cause actual results to differ from those described in the forward-looking statement. The company assumes no obligation to update any of the forward-looking statements it may make today to reflect actual results or changes in expectations. Listeners should rely on any forward-looking statements as predictions of future events and should listen to management's remarks today with the understanding that actual results, including the company's actual future results, may be materially different than what is described in or implied by these forward-looking statements. Please review the more detailed discussions related to these forward-looking statements, including the discussions of some of the risk factors that may cause results to differ from those described in these forward-looking statements contained in the company's filings with the Securities and Exchange Commission, including the previously filed 10-K for the year ended December 31st, 2021, and subsequently filed reports which are available in the company's investor relations website. Management's prepared remarks, including discussions of earnings and earnings per share, certain financial measures not prepared in accordance with accounting principles generally accepted in the United States or GAAP. Management has presented these non-GAAP financial measures because it believes they may be useful to investors for various reasons, but they should not be viewed as a substitute for or superior to the company's financial results prepared in accordance with GAAP. Please see the company's press release today discussing its financial results for the third quarter of 2022 for more information, including the description of how the company calculates non-GAAP income and earnings per share, and a reconciliation of these financial measures to income and earnings per share, the most directly comparable GAAP financial measures. With that, I'd now like to turn the call over to Ming.

Thank you very much, Melanie. Good afternoon, and thank you for joining our call today to discuss our third quarter 2022 results and the acquisition of Fortune Pharma. I will start with some comments on the transaction and my vision for Fulgen before turning the call over to my co-founder, Dr. Rui Yin. Then Brandon will review our product and go to market updates from the third quarter. And Paul will conclude with the financial and outlook before we take your questions. I'm pleased to announce that we have acquired Fulgen Pharma. A company I have been running with my co-founder, Dr. Ray Yin, as a private entity. We believe this acquisition has the potential to rapidly transform from a genetic diagnostic service business into a fully integrated precision medicine company focusing on oncology. joining our team of talented individuals, integrating our companies to drive the continuum of care that we believe begins with diagnosis and ends with patient care. Let me take a step back and provide a brief history of these two companies. Showing on this timeline slide, Fortune Pharma and Fortune GeneXus. were previously both owned by the full-gen therapeutics until 2016, when the businesses were separate ahead of initial public offering of full-gen genetics. The company has operated as a separate entity since 2016, enabling each business to focus on and scale its core business across genetic testing and therapeutics. Over the last year, Fortune Genetics has taken a major step to accept food codes in the large market of oncology testing, most notably with acquisition of the CSI Laboratory in August 2021 and opening the St. Arthur's Oncology Testing Facility in Southern California in May 2022. We believe the platform we have built with informed diagnostics and CSI make us uniquely positioned to deliver a full suite of genomic testing capabilities to our biopharma clients. We have been building this sequencing as a service business over the last few years, and we're seeing a meaningful opportunity to continue expanding these operations in the years ahead. As we build upon our genomic testing capabilities, to offer a more comprehensive suite of services to our customers. We also recognize that both the therapeutics industry and our pharma business may benefit from the learning and expertise in NGS and genomics. Bojan Pharma has developed a novel nano encapsulation and target therapy platform technology designed to improve the therapeutic window and the pharma code kinetics profile of both new and existing cancer drugs. Based on the current study and our pre-designed criteria, we believe our lead drug candidate, FID-07, has achieved a proper concept of treatment of numerous cancers, including head and neck, ampullary, pancreatic, lung, and breast, as presented as ESCO 2021. Both pharma and diagnosis have well validated technology platform and the talented design team have already taken a new and existing challenge in precision medicine and the patient care. We believe bringing these two entities back together will unlock CineScan's long-term upside for both pharma and diagnosis business while efficiently most current and the future risks. Our vision of 4G has always been to build a vertically integrated solution to potentially help patients developing and overcome cancer. The novel nano drug delivery technology platform synergistically underpins the combined business and help create more sustainable and a positive business model in precision medicine for years to come. With a large database from diagnostic business and a deep drug candidate pipeline from a farmer drug delivery platform, we can potentially bring more effective therapy or precision medicines while mitigating development risk. Our near-term opportunity including using FDA's 505 to new drug submission pathway to potentially shorten development timelines. In the long term, we believe we can leverage our insights from the diagnosis basis to enable precision medicine through organic or partner development strategies. With this combination, full-grain pharma will fully integrate with genetics. adding 30 people, 11 of which are PhD scientists, will bolster our already existing base of more than 100 pathologists, geneticists, and PhDs. With this combination, our headcount is well over 1,000 people. Spanning offices in California, Texas, Arizona, Georgia, Florida, Massachusetts, and New York. We believe with this capability alone, with the strong cat's position of full gene genetics, will allow us to continue to invest in this combined business while managing potential risks. This business combination advances our mission to build a vertically integrated platform to provide a comprehensive service and solutions across cancer care continuum, including early detection, diagnostics, monitoring, as well as drug discovery and development. The progress of each business has made today enable each other with technology and insights toward the common goal of improving continuum of care for patients. We believe we are well-capitalized to capture farmer pipeline with no need additional financing or dilution to shareholders. We have an efficient research program in place as well as manufacturing capabilities that may leverage for both sides of the business, overcoming potential future hurdles of drug development. We already have a team in place. The combination of these two businesses diversifies our access and will. Assuming regulatory approval provides significant future revenue opportunities and emerging opportunities through a lucrative target market. Before I turn over to Ray, I want to highlight the target market we have chosen for the farmer business is large and well-established. We believe we have opportunity to capture a portion of this market through indications that we have chosen to focus on. Data from completed ongoing studies of our current drug candidate developed with our novel drug delivery technology have provided early evidence that some of these candidates may be able to achieve the target indications. We believe we have the potential to bring some exciting drug candidates to the market through our platform. Now, I would like to introduce my co-founder and the president and CSO of Folium Pharma, Dr. Ray Yin, to provide more details on platform and the pipeline candidates we have been working on. Ray and I have been working together since 2004. when I served as the CEO of Fulgen Inc. We later founded Fulgen Therapeutics together in 2011. Ray?