July 16, 2024

M- Caorals

Healthy and Fitness

Cue Health cuts 170 jobs amid ‘economic challenges,’ decline in COVID-19 testing

Dive Temporary:

  • Cue Wellness is laying off 170 production staff members citing “economic challenges” and cuts in U.S. federal government funding for COVID-19 tests.
  • The cuts come three months immediately after the Biden administration decided to transfer $10 billion from COVID-19 tests to vaccines and other treatment options. Cue Overall health obtained a $481 million government deal in 2020 to scale up manufacturing of its place-of-treatment COVID-19 test.
  • With the COVID-19 tests sector shrinking, Cue Health and fitness is expanding its test portfolio to protect influenza and other infectious ailments to incorporate post-pandemic development drivers.

Dive Insight:

San Diego-primarily based Cue Health and fitness grew promptly in the course of the pandemic, rising its headcount from 99 at the begin of 2020 to 1,254 by the close of August 2021. Fueled by a $200 million original community providing, the headcount enlargement ongoing above the ultimate handful of months of 2021, with Cue Health ending the 12 months with 1,585 entire-time staffers.

Now, the corporation “has produced the difficult decision to lower its producing workforce by 170 individuals,” a spokesperson claimed.

The spokesperson attributed the cuts to “the financial problems that are impacting lots of industries as well as the U.S. government’s current conclusion to lower funding for COVID-19 screening.” Previous 12 months, Cue Health’s Department of Defense contract accounted for 62% of complete gross sales, top it to alert investors that it has traditionally relied on a compact number of clients and could put up with if they cut their buys of COVID-19 tests.

Cue Wellness is now performing by means of that state of affairs. Public sector contracts brought in 2% of revenues in the very first quarter, just after the DoD agreement finished.

Personal sector development offset the completion of the DoD deal, enabling Cue Overall health to put up revenue just beneath the leading of its $170 million to $180 million goal range, but a wide slowdown is coming. Cue Wellbeing is forecasting next quarter product sales of $50 million to $55 million. 

As the COVID-19 marketplace has shrunk, Cue Wellness has ramped up efforts to set up longer-expression expansion drivers. Conversing to investors on a 1st quarter effects meeting connect with very last month, Cue Well being CEO Ayub Khattak framed the new submission of a De Novo application for a COVID-19 check as paving the way for filings in other indications.

An influenza submission is prepared for the 3rd quarter and a respiratory syncytial virus take a look at and chlamydia-gonorrhea multiplex package are forecast to get started scientific scientific tests this 12 months.

Buyers are skeptical about Cue Health’s potential to pivot from COVID-19. Acquiring long gone public with a $3 billion industry cap, Cue Wellbeing has seen its valuation decrease to all over $550 million. The most up-to-date 11% drop came with yesterday’s disclosure of the cuts and brought the inventory down towards its all-time minimal of $3.70. Faced with challenges, Cue Wellness is sticking to its prolonged-expression plan.

“We stay self-assured in our very long-phrase technique as we carry on to broaden the amount of customers we provide and advance our menu of potential care choices, reinforcing our mission to increase how healthcare is shipped by generating it extra productive and timely, in the end leading to far better outcomes for people’s wellness,” a spokesperson reported.