NEW YORK – Cue Health has confirmed it will be laying off 170 people in light of economic hardships and reduced funding for COVID-19 testing.
The layoffs were first reported by Stat News and confirmed by a Cue spokesperson.
In an email, the spokesperson said that the layoffs to its manufacturing employees are "due to the economic challenges that are impacting many industries" and the lack of funding for COVID-19 testing from the US government.
"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," the spokesperson added.
The Stat News report found that Cue had difficulties ramping up manufacturing and delivering tests on time for its government contracts. In March 2020, Cue received $13 million from the US Department of Health and Human Services Biomedical Advanced Research and Development Authority to develop and validate a rapid SARS-CoV-2 test. The Cue COVID-19 Test received Emergency Use Authorization from the US Food and Drug Administration in June of that year.
Cue then nabbed a $481 million contract from the US Department of Defense in October 2020 to expand its production capacity for its COVID-19 tests and provide 6 million SARS-CoV-2 tests by March 2021.
In September 2021, Cue went public in a $200 million initial public offering that opened at $16.76 per share. As of Monday afternoon, Cue's stock price on the Nasdaq was $3.82, down 10 percent.
In March, on a conference call to discuss its 2021 fourth quarter financial results, company officials discussed its plans to expand its test menu and grow its footprint in the US and abroad. Last month, the San Diego-based company said it had submitted to the FDA for full clearance of its molecular test for COVID-19 for at-home and point-of-care use.
Late last year, Cue launched a direct-to-consumer subscription model that company officials said provides convenience to its users. At least one expert, though, questioned whom the model would benefit.