COVID-19 test maker Cue Health — once worth $2.3B — lays off entire company and shuts down

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Cue Health notified employees that everyone, including its leadership, will be laid off as it closes operations this Friday.

Cue Health, the once high-flying San Diego biotech supplying rapid COVID-19 test kits to the NBA and Google, is laying off all employees and shutting down on Friday.to throw away its COVID-19 test kits because they could give false results. The San Diego firm said on Thursday it stopped selling the COVID-19 tests, its only fully FDA-approved commercial product.

After the last round of layoffs, Cue, which has eight locations across the county in Sorrento Valley and Vista, had about 250 employees left. Now, those remaining 250 workers are also getting laid off this week. Its sleek, high-tech kit delivered results in 15 minutes straight to a smartphone and was one of the first to get fast-track approval from the FDA during the pandemic. Then, the company notched the notable achievement of securing the first, full FDA approval for an at-home COVID-19 test last June.

In recent months, Cue tried to get fast-track approval for other test products, including its tests for flu and RSV. But those clearances didn’t materialize. “You’re very much at risk with a single product,” Lichter said. “It could be that you have a supply chain issue … It could be you have the disease go away and the market is gone. So you have a lot of things that could go wrong.”

Lichter noted that all of the government grants that went to COVID-19-related companies like Cue, appeared as revenue and blew up these businesses. But in fact, “those subsidies go away” then “the market goes away and the whole thing is like a double collapse.”

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