Dive Brief:
- Cue Health plans to cut 230 employees, or nearly half of its staff, as it looks to reduce costs amid declining COVID-19 test sales.
- The San Diego-based company grew quickly during the pandemic when it brought in government and private contracts for its point-of-care molecular tests. Now, Cue faces questions about its ability to continue as losses add up and revenue declines.
- The changes are intended to refocus Cue’s business on its Cue Health Monitoring System, including developing and deploying point-of-care tests, spokesperson Rachel Rudo wrote in an email. “In alignment with this strategy, Cue has significantly reduced, or removed altogether, functions that don’t directly support this strategy,” Rudo said.
Dive Insight:
Cue has gone through several rounds of layoffs as the testing company looks to control costs. In January, the company cut more than 200 positions across two rounds of layoffs, and Cue also slashed hundreds of roles in 2022 and 2023.
The main challenge the company faces is declining sales of COVID tests, which account for the majority of Cue’s sales. Cue received de novo clearance last year from the Food and Drug Administration for its at-home COVID test, making it the first company to go through the traditional regulatory review process for such a test outside of emergency use authorization (EUA).
However, Cue’s only FDA authorized tests are the COVID test and an Mpox test that has an EUA, according to Cue’s annual report. A flu test and an RSV test are still under FDA review.
“Our revenue for at least the near term will almost exclusively depend on sales of our COVID-19 test until we can obtain regulatory clearance or other appropriate authorization for, and commercialize, additional tests,” Cue wrote in the annual filing.
Test sales have dwindled. In 2023, Cue brought in $70.9 million in revenue, an 85% decrease year over year. Meanwhile, the company reported a net loss of $373.5 million.
Cue said in its annual report that it may seek additional financing and evaluate financing alternatives to meet its cash requirements for the next year.
Cue is also losing top leaders: CEO Ayub Khattak stepped down in March, and CFO Aasim Javed recently announced plans to resign on May 13.
