Dive Brief:
- The Food and Drug Administration categorized Cue Health’s COVID-19 test recall as a Class II event.
- Cue began the recall in May, shortly after the FDA advised healthcare professionals not to use the COVID-19 tests because of an increased risk of false results. The recall affects nearly 250,000 test kits, according to the agency’s Tuesday database entry.
- The company also laid off remaining employees and filed for Chapter 7 bankruptcy in May. The bankruptcy court recently published the results of an auction of Cue’s “non-turn-key assets” that generated gross proceeds of $2.9 million.
Dive Insight:
Cue, a diagnostic company that rose to prominence during the pandemic, faced challenges as demand for COVID-19 tests waned. The company wanted to use the install base established during the pandemic as a launchpad for a broader diagnostic portfolio. However, with COVID-19 sales falling rapidly, Cue made multiple rounds of layoffs and never managed to add new growth drivers.
The situation came to a head in May, when the FDA sent a warning letter and advised against the use of Cue’s COVID-19 tests. Cue filed for bankruptcy, laid off more people and began a voluntary recall later that month.
The FDA recently shared two updates on the regulatory actions against Cue. The agency categorized the recall of Cue’s prescription and over-the-counter COVID-19 tests as a Class II event. Class II recalls cover products that may cause a temporary or medically reversible adverse health consequence, or where the probability of serious adverse health consequences is remote.
The FDA classified the recall one week after revoking emergency use authorizations of Cue’s two tests. Agency officials took the action after Cue told them it had stopped making, shipping and distributing the tests. Cue added that any cartridges already in distribution cannot be used because it disabled the mobile app needed to run the tests.