Fulgent Genetics announced that it will acquire the selected assets of Bako Diagnostics, a national anatomic pathology laboratory, and the dermatopathology laboratory StrataDx for a total consideration of $55.5 million in cash. The deal is expected to close in the first half of 2026 after customary regulatory approvals and other closing conditions are satisfied.
The acquisition adds Bako’s full‑service anatomic pathology platform and StrataDx’s dermatopathology expertise to Fulgent’s existing precision‑diagnostics portfolio. Management says the new capabilities will broaden the company’s test menu, increase its national client base, and deepen its sales and service network. The integration will also allow Fulgent to deploy its proprietary AI‑assisted workflow and automated lab operations across the newly acquired sites, improving turnaround times and diagnostic yield.
Fulgent’s Q3 2025 results provide context for the transaction. Revenue rose to $84.1 million, up 17% year‑over‑year, while non‑GAAP earnings per share reached $0.14, a $0.36 beat on the consensus estimate of –$0.22. The company also raised its full‑year 2025 revenue guidance to $325 million and its non‑GAAP EPS guidance to $0.30, reflecting confidence in continued demand and margin expansion. With $787.7 million in cash, cash equivalents, and investments, the company can fund the acquisition without taking on debt.
Segment data show that the precision‑diagnostics segment grew to $187 million in Q3 2025, while anatomic pathology and biopharma services contributed $106 million and $17 million, respectively. Gross margin for the precision‑diagnostics segment expanded to 44.2% from 42% in the prior year, driven by higher mix of high‑margin tests and operational leverage. The margin lift offsets modest cost increases from technology investments and workforce expansion, supporting the company’s guidance for continued margin improvement.
CEO Ming Hsieh highlighted the strategic fit, saying the addition of Bako and StrataDx “will broaden our capabilities in the pathology testing market and further leverage our investments in AI to improve efficiency and quality.” Analysts noted that the earnings beat and the acquisition announcement together spurred a positive market reaction, with investors viewing the deal as a step toward a fully integrated precision‑medicine platform that can capture higher‑margin services and accelerate growth.
The transaction positions Fulgent to capture a larger share of the growing precision‑diagnostics market, while the cash‑based payment preserves financial flexibility. By combining Bako’s and StrataDx’s pathology expertise with its existing AI platform, Fulgent aims to deliver faster, more accurate diagnostics and to strengthen its competitive advantage in a market that increasingly rewards integrated, technology‑driven solutions.
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