Cue Health, Google’s Covid-19 test provider, held an IPO

Cue Health, who makes a Covid-19 test kid at home, made its debut on the open market on Friday.

Queue health

In April, Google began sending Covid-19 tests to US employees at home from a lesser-known startup called Cue Health in San Diego.

Until then, most of CueHealth’s business came from a contract with the US Department of Defense to provide the federal government with quick testing. Google soon became the largest private sector customer of health tech companies.

Cue Health is using that relationship to help build a story that is sufficiently compelling for investors in the public market. On Friday, the company made its debut on the Nasdaq with the ticker symbol “HLTH,” closing its share price by 25% to $ 20. It values ​​Queue Health at $ 2.9 billion.

Founded in 2010, Cue Health had little income before the Covid-19 pandemic. It spent most of the decade as a research mode diagnostic testing company.

Everything changed in 2020, when the worst pandemic of the century suddenly made access to instant testing essential. In June 2020, the company received the first emergency use authorization for the Covid-19 test from the Food and Drug Administration.

The Cue Health test kit includes a wand, cartridge and reader. The user takes a nasal swab with a wand and inserts it into a small box. The reader then feeds the results to the smartphone app within about 20 minutes. No need to process in the lab.

In July 2020, a month after the emergency authorization, the National Basketball Association began using the Queue Health Test for the “NBA Bubble” in Orlando, where the game resumed without fans. Three months later, the company signed a $ 480.9 million contract with DoD to “meet the unprecedented demand for fast and accurate molecular diagnostics,” according to the prospectus.

Cue Health Covid-19 test

Queue health

The company is still operating under an emergency use authorization because the product is not fully FDA approved or approved.

“We’ve been serious about the pandemic,” Ayub Timbe, CEO of Q-Health, said in an interview with CNBC on Friday after the IPO. The team “showed a great determination to scale up in the midst of a pandemic. This was very difficult.”

Khattak originally founded the company under the name Ruubix with product chief Clint Sever. Prior to last year, they focused primarily on research and development.

The latest benefits to this business came from Google. The deal was undisclosed and was first disclosed in one sentence earlier this month in Cue Health’s IPO prospectus.

“In April 2021, we and Google LLC signed an agreement with Cue Health Readers to provide Cue COVID-19 Test Kits to Google’s US-based employees by the end of the year,” Filing said.

Sales in the first half of this year rose from $ 5 million in the year-ago quarter to $ 201.9 million, Kew said. Approximately 84% of revenue comes from sales to the public sector. Of the remaining $ 34.8 million in revenue, $ 28.9 million came from “single enterprise customers,” Queue Health said.

Khattak didn’t reveal the customer’s name, but people familiar with the matter confirmed to CNBC that it was Google. Information is confidential, so people have asked not to reveal their identities.

Google did not respond to requests for comment.

Scale up production

As of August, Cue says it has sold 5 million test kits and is producing more than 15 million cartridges annually.

“By the end of 2021, we expect to grow our production capacity to the speed of tens of millions of cue cartridges a year,” Filing said.

Cue Health had to be hired to meet scaling requirements. The company had less than 100 employees in 2020, but now has more than 1,250. In April, Glenn Wada, Senior Vice President of Salesforce, was appointed Chief Commercial Officer. Khattak said that despite the competitiveness of the technicians, Cue Health was able to hire because it addresses such specific global issues.

Beyond Covid-19, Cue Health states that it is working on a number of tests that can be completed using saliva, urine, blood samples, and nasal swabs. These diagnostic tests are aimed at determining respiratory health, sexual health, and risk of chronic illnesses such as heart disease.

Khattak said the company wants to provide virtual care directly to consumers and test for common illnesses such as streptococcal pharyngitis.

For Google, the Cue Health contract allows employees to order additional test strips from the company’s internal resource portal. Not having access to in-house benefits such as free meals and other amenities, the company is trying other ways to appeal to its employees and providing resources for mental and physical health.

Google had planned employees to return to the office in September, but the date was postponed to January 10, 2022.

Khattak said the Google partnership began because his company used Google Cloud Platform, which competes with Amazon Web Services and Microsoft Azure. Google approached Cue Health when it realized that employees needed the kind of test product that Chattak’s team was developing.

“It was a kind of convergence at that point,” said Chattak. “We weren’t necessarily outreach mode because we were doing everything we could to scale up and meet customer demands, but given the connections we had, we Choosed them and they chose us. “

Their collaboration will be even deeper.

According to the prospectus, in August of this year, Cue and Google Cloud signed a partnership to develop real-time variant tracking and sequencing for Covid-19.

According to Filing, they aim to create “an advanced respiratory biothreat detection system that ranges from company home diagnostic tests to complete real-time virus sequences and analysis and prediction capabilities using Google Cloud-powered solutions.” ..

Another testing company in trial

Queue’s public debut begins with Elizabeth Holmes, the founder of the deceased blood test company Theranos, being put on a criminal trial of wire fraud and a conspiracy to commit wire fraud. She pleaded not guilty.

Khattak said Theranos would naturally appear in the conversation, given the timing of the two events.

“Basically, it creates a much higher hurdle in nature as the company grows and has something like that in the backyard,” said Chattak. “But we are in a lucky position to have a widely used product. There is no black box that doesn’t understand what’s going on.”

Queue Health is also conducting clinical research independent of the Mayo Clinic and has been thoroughly scrutinized through health verification.

“We are excited to overcome many of these hurdles,” said Chattak.

look: Cue Health CEO on FDA Emergency Permit for Covid Home Inspection

Cue Health, Google’s Covid-19 test provider, held an IPO

Source link Cue Health, Google’s Covid-19 test provider, held an IPO

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