Fulgent Genetics, Inc.

Greetings and welcome to the Folger Genetics Q4 2024 conference call and webcast. At this time, all participants are in a 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. You may be placed into question queue at any time by pressing star one on your telephone keypad. 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.

Thanks, Kevin. Good morning and welcome to the Fulgent fourth quarter and full year 2024 financial results conference call. On the call today 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, ir.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, expectations, 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' 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 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 the 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, 2023, and subsequently filed reports which are available on the company's investor relations website. Management's 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 presented 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 fourth quarter and full year 2024 for more information, including the description of how the company calculates non-GAAP income or loss, earnings or loss per share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating profit or loss and margin, and adjusted EBITDA, and a reconciliation of these financial measures to income or loss, earnings or loss per share, and operating margin, the most directly comparable GAAP financial measures. With that, I would now like to 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 fiscal year 2024 and our two business lines. Then Brandon will review our product and go-to-market updates for our laboratory service business in the fourth quarter and 2024. And Paul will conclude with the financials and outlook before taking questions. We are pleased with our results for the fourth quarter and the year. We have shown growth in laboratory service business for the year and have good momentum in 2025 as we continue to invest in business. In our therapeutic development business, we now have a clinical pipeline. In 2024, we begin phase two clinical trial of FID-07 in combination with cetuximab in patients with recurrent bone metastatic head and neck sequimus cell carcinoma. So far, we have dosed 17 patients in this trial and are very encouraged by the preliminary results, which we anticipate to publish at an upcoming ASCO meeting in June. We expect to complete enrollment up to 46 patients by late 2025. We'll continue to estimate the total clinical trial costs for the Phase II trial to be approximately $10 million. Our second clinical candidate is FID022, a nanoencapsulated SN38 for the treatment of solid tumors, including potentially colon, pancreatic, ovarian, and bile duct cancers. We submit an investigational new drug application to US FDA in December 2024, and it was cleared in January 2025. We expect to enroll the first patient in a Phase I trial in the second quarter of 2025. We expect the trial cost for the Phase I and 1B trial is approximately $8 million. As a reminder, Our drug candidates were founded with our novel nano-encapsulation technology, which includes many issued active patterns and active pattern applications. And the target therapeutic platform designed to improve therapeutic windows and the pharmacokinetics profile of both new and existing cancer drugs. I'm excited about the progress we're making in our clinical pipeline and the potential for both FID-07 and FID-022. We are targeting heavily pre-treated patients with a few options left, and I hope we will be able to provide additional treatment options to further their lives. Our anticipated cost for this program is very reasonable, and we believe our investment will be rewarded. Finally, we have made a significant advance in the development of antibody drug conjugate using our novel pattern linker and payload platform technology. In preclinical study, we observed our ADC have better efficacy over various tumors with a broad range of targeting antigens expression level when compared with some of the upper ADC benchmarks on the market. At the same time, ADC honing a novel target using our novel platform technology are also being prepared for the goal of generating candidates for the clinical trials. Overall, I'm pleased with the growth we have seen year over year in our core laboratory services business and the progress we have made with our therapeutic development business. will continue to be in a strong financial position to execute our strategy. I would like to thank our employees, partners, and the stakeholders for your hard work and loyalty in a great year for our business. We look forward to further progress in 2025. I will now turn the call over to Brandon Perthes, our Chief Commercial Officer, to talk more about our laboratory service expenses. Brandon.