Plotting a Fulgent future, diagnostic business inks $100M deal to reunite with drug delivery sibling

Fulgent Genetics is getting into the drug delivery game. Six years after splitting from its pharma arm, the company has reunited with its sibling in a $100 million deal that gives it control of a nano-drug delivery technology platform.

The two businesses collectively made up Fulgent Therapeutics from 2011 to 2016. At the end of that period, the businesses split, enabling Fulgent Genetics to go public and leaving the pharma unit as a standalone private company. Since then, Fulgent Pharma has published clinical data on a candidate that uses its nano-encapsulation technology to overcome the limitations of paclitaxel.

After seeing sales soar, then fall, on the back of COVID-19 testing demand during the pandemic, Fulgent Genetics has decided to reconnect with its sibling. The deal sees the diagnostic company pay $43.4 million in cash, plus $30.7 million in its common stock, to acquire the pharma business.

In return, Fulgent has taken ownership of a drug delivery technology and associated pipeline of drug candidates. Talking to investors on a conference call, Ray Yin, Ph.D., chief scientific officer at the pharma unit, explained the advantages of the approach to the delivery of water-insoluble or poorly soluble drugs.

“Unlike some of the drug delivery materials, such as human serum albumin or HSA, which is only soluble in water, our nano drug delivery of materials used for drug candidate development are soluble not only in water but also in various organic solvents, as well as capable of hot melt mixing with active pharmaceutical ingredients,” Yin said.

According to the Fulgent executive, the advantages will enable the company “to generate a much broader range of drug candidate formulations, particularly amorphous drug candidate formulations, which can be used for both IV and oral formulations.” The goal is to improve the pharmacokinetic profile as well as safety and efficacy.

Fulgent has applied the technology to paclitaxel, encapsulating the ingredient in a polyethyloxazoline polymer excipient to keep the drug in solution until it can enter a cancer cell and preferentially deliver it to the tumor through the leaky hyperpermeable vasculature.