Fulgent Genetics, Inc.

Greetings and welcome to the Fulgent Genetics first quarter 2024 conference call and webcast. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Melanie Solomon, Investor Relations for Fulgent Genetics. Thank you. You may begin.

Good morning and welcome to the Fulgent First Quarter 2024 Financial Results Conference Call. On the call are Ming Hsieh, Chief Executive Officer, Paul Kim, Chief Financial Officer, and Brandon Perthews, Chief Commercial Officer. The company's press release discussing the financial results is available on the Investor Relations section of the company's website, www.FulgentGenetics.com. 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 statements. 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 not rely on any forward-looking statements as predictions of future events and should listen to management's remarks today with the understanding that actual events, including the company's actual future results, may be materially different in what is described and 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 the forward-looking statements, contains and accompanies filings with the Securities and Exchange Commission, including the previously filed 10-K for the year ended December 31, 2023, and subsequently filed reports which are available on the company's Investor Relations website. Management prepared remarks, including discussions of earnings and earnings per share, contain financial measures not prepared in accordance with accounting principles generally accepted in the United States or GAAP. Management has prepared these non-GAAP financial measures because it believes they may be useful to investors for various reasons, but these measures 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 discussing its financial results for the first quarter, 2024, for more information, including the description of how the company calculates non-GAAP income or loss, earnings or loss per share, non-GAAP operating margin, and adjusted EBITDA, and a reconciliation of these financial measures to income or loss, earnings or loss per share, and operating margins, the most directly comparable GAAP financial measures. With that, I'd now like to turn the call over to Ming.

Thank you, Melanie. Good morning, and thank you for joining our call today. I will start with some comments on the first quarter and our therapeutic development business. Then Brandon will review our product go-to-market updates for our laboratory service business in the first quarter. Paul will conclude with the financials and outlook before we take your questions. We are pleased with our results in the first quarter. With $64.5 million in total revenue, we recognize $1.3 million of revenue on previously billed COVID-19 tests. Excluding COVID-19 revenue, First quarter core revenue of $63.2 million was driven by momentum in precision diagnostics, particularly reproductive health and oncology. All fusion revenue at this time originated from our laboratory services business, previously referred as our clinical diagnosis business. Brandon will discuss this business further. Turning to our therapeutic development business, we continue to make good progress with the Fulgine Pharma. Our novel nano-encapsulation technology includes over 30 issued or active patents and active patent applications and the target therapy platform designed to improve therapeutic windows and the pharmacokinetics profile of both new and existing cancer drugs. We are excited about this platform because of its potential to yield several drug candidates. We believe that our lead drug candidate, FID07, has shown promising results in clinical trials today for treatment of numerous cancers, including head and neck, ampullary, and pancreatic. An abstract of a preliminary HNSCC clinical results from our Phase I-1B study has been accepted for presentation at the 2024 ESCO Annual Meeting, which will be held May 31 through June 4 in Chicago. Our Phase II clinical protocol for second-line treatment of HNSCC was accepted by the FDA, and we expect to enroll the first patient this quarter. We look to bring FID-07 to more patients in the clinical trial setting and keeping you updated on the progress of the trial. We are advancing second drug candidate, FID-02, a nanoencapsulated SN38 toward an IND or investigational new drug application by end of this year. We believe our nano drug delivery platform has the potential to address the challenges of currently available treatment for the colon, bile duct, and other cancers using SN38 instead of pro-drug of SN38. Building up our nanoparticle technology, we are also developing next-generation antibody drug conjugate ADC technology platform that could potentially provide even broader killing toward heterogeneous cancer cells than those ADCs with a bystander killing effect. Our ADC platform is not target-driven and may be potentially being applied more targeted ADCs, particularly new targets with low antigen expression where existing ADC platforms have failed to show the effectiveness. Overall, we have a strong strategy with both laboratory service business and the therapeutic development business. We continue maintain a strong balance sheet with which we'll execute this strategy. I'd like to thank our employees, partners, stakeholders for your hard work and loyalty. We'll look forward to continued progress in 2024. I'll now turn over the call to Brandon Perthew our Chief Commercial Officer to talk about our laboratory services business results during the first quarter. Brandon.