Less than a year after it went public, diagnostics company Cue Health has laid off 170 manufacturing workers.
First reported by STATCue said the layoffs reflected larger economic conditions, as well as the federal government’s recent move to divert funding from COVID-19 testing to secure vaccines and treatments.
The diagnostics company is best known for its at-home molecular COVID-19 test, which uses a $250 reader and single-use test cartridges, sending results to a smartphone. When Cue went public in its $200 million IPO, it detailed other diagnostics in the works that would eventually be compatible with its reader, including tests for flu, RSV (respiratory syncytial virus) and sexual health.
“We remain confident in our long-term strategy as we continue to broaden the number of customers we serve and advance our menu of future care offerings, reinforcing our mission to improve how healthcare is delivered by making it more efficient and timely, ultimately leading to better outcomes for people’s health,” a spokesperson told MobiHealthNews.
THE LARGER TREND
Founded in 2010, Cue rocketed to prominence in the midst of the COVID-19 pandemic. It closed a $100 million Series C round in June 2020 to support the development and validation of its test, and was awarded $481 million from HHS and the Department of Defense to expand production in October that year.
The company wrapped up a $235 million financing round in May 2021 and hit the public markets in September. It posted revenue of $179.4 million in the first quarter of 2022, compared to $64.5 million in the first quarter of 2021. That still amounted to $2.8 million in net income, but it dipped compared with $19.7 million during the prior year quarter.
Cue has also expanded out of diagnostics, launching a virtual health platform late last year.
“The goal is always enabling anyone to access the healthcare system, from home or wherever they are. To make that extremely easy, to bring the healthcare system to you,” the company’s cofounder and chief product officer Clint Sever told MobiHealthNews at the time. “So that digital transformation of the healthcare system remains our mission. And I think this DTC [direct-to-consumer] launch is the first major step in burning that larger vision.”
However, Cue isn’t alone when it comes to digital health layoffs in recent weeks. Virtual care unicorn Ro last week laid off 18% of its workforce, while hybrid provider Carbon Health let go of 250 workers in early June.