San Diego’s Cue Well being, which went public final 12 months in an IPO valued at practically $3 billion, is shedding 170 manufacturing staff, attributable to “financial challenges” and cuts to authorities funding for COVID-19 testing, an organization spokesperson mentioned in an announcement Wednesday.
The minimize is roughly 11 % of Cue’s general workforce and comes on the heels of huge progress and demand for Cue’s 20-minute COVID-19 take a look at that delivers outcomes on to the person’s cellphone.
Nearly all of laid-off staff are based mostly out of the testing firm’s Vista location, with the remainder working at its two amenities in Sorrento Valley, based on the Employee Adjustment and Retraining Notification Act (WARN) discover filed with the state.
Cue Well being developed a fast, at-home COVID-19 take a look at by way of emergency use authorization and inked main offers with the NBA, Google and the U.S. Division of Protection early within the pandemic. In 2020, Cue netted a $481 million contract with the Division of Protection to supply 6 million COVID-19 checks and a few 30,000 studying units.
With demand for diagnostic checks surging through the pandemic, the 12-year-old well being know-how firm grew from 99 staff in January 2020 to 1,585 full-time staff on the finish of 2021. Income for the primary three months of this 12 months was $179 million, up 178 % from the 12 months in the past interval, according to SEC filings. (For all of 2020, Cue Well being’s income totaled $23 million.)
On Sept. 24, the upstart agency went public elevating $200 million. It offered 12.5 million shares at $16 — the midpoint of its anticipated value vary. The inventory received off to a sizzling begin, surging 25 % to shut that day at $20 per share on the Nasdaq Trade. Its inventory closed Wednesday at $3.32 per share, down 2.92 %.
However, the panorama and funding for COVID-19 testing have modified.
The Biden administration introduced earlier this month that it could divert funding for testing to COVID-19 vaccines for the fall. The USA additionally not too long ago relaxed its pandemic guidelines for People coming back from worldwide journey and nixed a requirement to point out proof of a damaging COVID-19 take a look at.
In Cue Well being’s annual report for 2021, the corporate famous that it has traditionally relied on the Division of Protection and a small variety of prospects for almost all of its income. Final 12 months, funding from the Division of Protection made up roughly 61 % of Cue Well being’s whole income.
In consequence, the corporate acknowledged that any lack of prospects or decline in demand for his or her COVID-19 checks might have a damaging affect on their enterprise operations and income.
Just lately, Cue Well being was excluded from a contract issued by the Protection Logistics Company for COVID-19, influenza and respiratory syncytial virus (RSV) fast take a look at kits and analyzers, according to the Government Accountability Office. The corporate protested the choice to exclude its proposal as “the results of an unreasonable and unequal analysis” however Cue’s protest was denied in Might.
Regardless of the COVID-19 take a look at package being its solely commercially obtainable product, Cue Well being has been making an attempt to develop and diversify its choices.
“We’re finest recognized proper now for our COVID-19 checks. However we’re far more than only a COVID take a look at firm,” mentioned Clint Sever, co-founder and chief product officer, in a previous interview with the U-T.
“We have now a platform that builds on over a decade of improvement,” he mentioned. “And we’ve got many extra merchandise on the best way, issues like flu and RSV checks, ladies’s well being and sexual well being. So, there’s much more content material coming to the platform.”
The corporate mentioned in an announcement to the U-T on Wednesday it stays “assured in our long-term technique as we proceed to broaden the variety of prospects we serve and advance our menu of future care choices, reinforcing our mission to enhance how healthcare is delivered by making it extra environment friendly and well timed, finally main to raised outcomes for folks’s well being.”
