Fulgent Genetics, Inc. (NASDAQ:FLGT) ("Fulgent Genetics" or the "Company"), a technology company providing comprehensive testing solutions through its scalable technology platform, today announced that the Company has made an incremental strategic investment in FF Gene Biotech, the Chinese entity formed in 2017 through a Joint Venture ("JV") between Fulgent Genetics, Xilong Scientific and Fuzhou Jinqiang Investment Partnership (FJIP). Fulgent has made a cash investment of approximately $19.0 million in the Chinese entity, which gives Fulgent a majority stake and controlling ownership of FF Gene Biotech.
FF Gene Biotech was founded in 2017 to bring Fulgent Genetics' Next Generation Sequencing (NGS) capabilities to the Chinese genetic testing market. The JV has enabled Fulgent to have an operational presence on the ground in China to capitalize on the large and growing genetic testing opportunity in the country. The size of China's NGS-based cancer genotyping market is projected to grow at a 30% CAGR from 2019 to 2030, to $4.5 billion, per the China Insight Consultancy (CIC). Fulgent believes it is uniquely well positioned to capture share in this market given the Company's physical presence on the ground in China, which it believes is a distinct advantage relative to other genetic testing providers who have been unable to establish a similar presence.
Fulgent will increase its testing capacity at the JV's facility in Fuzhou, in the province of Fujian, China and expand the sales organization supporting Fulgent's growth initiatives. Since its launch, the Joint Venture has generated revenue of more than US$10 million driven by test volume of over 50,000. The JV has focused primarily on testing for cancer, reproductive health and pediatrics and will expand its foothold in these areas with Fulgent's investment. With a controlling interest in FF Gene Biotech, Fulgent will recognize the financial impact of the operations of the JV within its consolidated financial results. The transition is expected to close in Fulgent's second fiscal quarter.
"Our incremental investment in FF Gene Biotech is an important strategic milestone for Fulgent Genetics as we look to expand our presence on the ground in China," said Ming Hsieh, Chairman and CEO of Fulgent Genetics. "We see a significant market opportunity for NGS testing in China, and we believe that our differentiated approach to testing with our scalable technology platform, efficient lab operations, expansive test menu, and superior customer service will make us well positioned to capitalize on this opportunity. We believe we have the right pieces in place, including a distinct advantage with feet on the ground in China, to become a leading provider of NGS testing solutions in the country."