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Cue Well being, which makes at-home Covid-19 testing kidds, made its public market debut Friday.
Cue Well being
In April, Google began sending at-home Covid-19 exams to its U.S. staff from a little-known start-up in San Diego referred to as Cue Well being.
Most of Cue Well being’s enterprise as much as that time had come from a cope with the U.S. Division of Protection to supply speedy exams to the federal authorities. Google immediately turned the health-tech firm’s largest non-public sector buyer.
Cue Well being has used that relationship to assist construct a narrative compelling sufficient for public market buyers. On Friday, the corporate debuted on the Nasdaq underneath ticker image “HLTH,” and the inventory climbed 25% to $20 on the shut. That values Cue Well being at $2.9 billion.
Based in 2010, Cue Well being had solely a tiny quantity of income previous to the Covid-19 pandemic. It spent the higher a part of a decade as a diagnostic testing firm in analysis mode.
All the pieces modified in 2020, when the worst pandemic in a century all of a sudden made entry to immediate testing important. In June 2020, the corporate acquired its first emergency use authorization from the Meals and Drug Administration for Covid-19 exams.
Cue Well being’s check package features a wand, cartridge and reader. Customers take a nasal swab with the wand and insert it within the small field, the place a reader feeds outcomes to a smartphone app inside about 20 minutes. There isn’t any want for processing at a lab.
In July 2020, a month after the emergency authorization, the Nationwide Basketball Affiliation started utilizing Cue Well being exams for its “NBA bubble” in Orlando, the place video games had been restarting with out followers. Three months after that, the corporate signed a $480.9 million deal with the DoD, to “meet the unprecedented demand for speedy and correct molecular diagnostic testing,” in accordance with the prospectus.
Cue Well being Covid-19 check
Cue Well being
The corporate continues to be working underneath emergency use authorization because the merchandise haven’t been absolutely FDA cleared or authorised.
“We have been actually working arduous by the pandemic,” Cue Well being CEO Ayub Khattak mentioned in an interview with CNBC on Friday after the IPO. The workforce “confirmed nice willpower to scale within the midst of the pandemic, which was fairly a problem.”
Khattak based the corporate with product chief Clint Sever initially underneath the title Ruubix. Earlier than final 12 months, they had been principally centered on analysis and improvement.
The newest boon to the enterprise got here from Google, a deal that wasn’t introduced publicly and was first disclosed in a single sentence in Cue Well being’s IPO prospectus earlier this month.
“In April 2021, the Firm and Google LLC entered into an settlement to supply Cue Well being Readers and Cue COVID-19 Take a look at Kits to Google’s U.S.-based staff by 12 months finish,” the submitting mentioned.
Cue mentioned that income within the first half of the 12 months, reached $201.9 million, up from $5 million in the identical interval a 12 months earlier. Some 84% of its income got here from gross sales to the general public sector. Of the remaining $34.8 million in income, $28.9 million was from a “single enterprise buyer,” Cue Well being mentioned.
Khattak declined to call that buyer, however folks aware of the matter confirmed to CNBC that it is Google. The folks requested to not be recognized as a result of the data is confidential.
A Google spokesperson declined to remark.
Scaling up manufacturing
As of August, Cue had bought 5 million testing kits and mentioned that it is manufacturing cartridges at a price that exceeds 15 million a 12 months.
“We anticipate rising our manufacturing capability to a price equal to tens of thousands and thousands of Cue Cartridges per 12 months by the top of 2021,” the submitting mentioned.
Cue Well being has needed to rent to fulfill scaling calls for. The corporate had fewer than 100 staff in 2020 and now has greater than 1,250. In April, Glenn Wada, a senior vice chairman at Salesforce, was named chief industrial officer. Khattak mentioned that regardless of the competitiveness for tech expertise, Cue Well being has been capable of recruit as a result of it is addressing such a tangible world drawback.
Past Covid-19, Cue Well being says it is engaged on a lot of exams that may be accomplished utilizing saliva, urine and blood samples and nasal swabs. These diagnostic exams will cowl issues like respiratory well being, sexual well being and figuring out threat of continual sicknesses reminiscent of coronary heart illness.
Khattak mentioned the corporate hopes to supply direct-to-consumer digital care and testing for frequent sicknesses like strep throat.
For Google, the settlement with Cue Well being has allowed staff to order extra check strips by the corporate’s inner assets portal. With out the supply of in-office perks like free meals or different facilities, the corporate has tried different methods to enchantment to staff, providing assets for psychological and bodily well being.
Google had deliberate for workers to return to the workplace in September, however that date received pushed to Jan. 10, 2022.
Khattak mentioned the Google partnership started as a result of his firm was utilizing the Google Cloud Platform, which competes with Amazon Internet Providers and Microsoft Azure. Google approached Cue Well being when it realized that its workforce wanted the type of testing product Khattak’s workforce was creating.
“It type of converged at that time,” Khattak mentioned. “We had been doing every thing we may to scale up and meet calls for of our clients so we weren’t essentially in outreach mode. However given the connection we had, we selected them they usually selected us.”
Their work collectively goes deeper.
In August of this 12 months, Cue and Google Cloud entered right into a partnership to develop real-time variant monitoring and sequencing of Covid-19, the prospectus says.
They intention to create an “superior respiratory biothreat detection system spanning from the Firm’s at-home diagnostic testing to full real-time viral sequencing in addition to analytical and predictive functionality utilizing Google Cloud powered options,” in accordance with the submitting.
One other testing firm on trial
Cue’s public debut comes as Elizabeth Holmes, the founding father of defunct blood-testing firm Theranos, is on criminal trial for wire fraud and conspiracy to commit wire fraud. She has pleaded not responsible.
Khattak mentioned Theranos naturally comes up in dialog, given the timing of the 2 occasions.
“As an organization rising and having that kind of in your yard, mainly, it is one thing that basically creates a a lot larger hurdle,” Khattak mentioned. “However, we’re within the lucky place that we’ve a product that is broadly used, There isn’t any black field that you would be able to’t perceive what is going on on.”
Cue Well being additionally has unbiased medical research from the Mayo Clinic and has been completely vetted by well being validations.
“We’re excited to be by quite a lot of these hurdles,” Khattak mentioned.
WATCH: Cue Health CEO on FDA emergency authorization for Covid at-home tests
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