Dive Brief:
- Cue Health will lay off the remainder of its staff this week, according to a filing with California’s Employment Development Department.
- The layoffs, first reported by the The San Diego Union-Tribune, include all of Cue’s U.S. employees and company leadership.
- Cue has undergone multiple rounds of layoffs in the past two years, announcing plans to cut nearly half of its staff earlier this month. The San Diego-based test maker had one product cleared by the Food and Drug Administration, a COVID-19 test, but the agency recently warned people to stop using it because of changes made to the test.
Dive Insight:
Cue, which built its business around a portable, molecular testing platform, grew quickly during the COVID-19 pandemic. The company struck agreements with Google and the NBA to provide COVID tests for both organizations and raised $200 million in an initial public offering in 2021. It also raised hundreds of millions of dollars through contracts with the Departments of Defense and Health and Human Services to provide COVID tests.
Cue’s fortunes changed when federal funding dried up and demand for COVID tests plummeted. Cue received de novo clearance for its COVID test in 2023, but it remained the company’s only FDA-cleared product.
By the end of 2023, Cue brought in just $70.9 million in revenue, down from $483.5 million the prior year. The company also began shedding employees through several rounds of cuts, including a 230-person layoff announced earlier this month and more than 200 people across two layoffs in January.
Cue’s sole product came under fire this month when the FDA sent a warning letter to the company regarding unauthorized changes to its COVID test and instructed people to not use the diagnostic.
Cue had initially planned a layoff of 190 U.S. employees effective July 1 and one additional employee on July 10, according to a California Worker Adjustment and Retraining Notification filing reviewed by MedTech Dive. The company sent an update on Monday to the state saying those people’s employment will end on May 24, along with all remaining U.S. employees, including company leadership. The decision was made by the company’s board “due to the fluid nature of this situation.”
CEO Ayub Khattak and CFO Aasim Javed resigned earlier this year.