Early in the pandemic, the health-testing firm developed a federally funded, over-the-counter coronavirus test. It made a name for itself after signing high-profile deals to serve as COVID screener to the National Basketball Association and Major League Baseball.
With declining interest in COVID testing, however, the company’s stock value has tanked from a high of $20 a share to $0.14 Tuesday.
The company has decided to refocus, according to Chief of Staff Jessie Wick, by returning to its core technology–the Cue Health Monitoring System–which offers a range of at-home testing for people to manage heart and sexual health, food sensitivities, and other conditions.
“Cue is moving away from [at-home, mail-in test kits and prescription order and delivery] for now,” Ms. Wick told The Epoch Times. “Cue has significantly reduced, or removed altogether, functions that don’t directly support this strategy.”
Cue Health, which has been under pressure from investors to cut costs, implemented a new cost-reduction plan May 1 as it narrows its focus on core technology, according to its Securities and Exchange Commission (SEC) filing.
The reduction will include laying off 230 employees, about 49 percent of its global workforce, according to Cue Health.
Cue Health’s founder Ayub Khattak stepped down as chief executive officer in March as the company began a review of its business and operations.
Starting in 2020, COVID testing boosted the company’s income from zero to about $212 million in less than two years. The company manufactured the COVID tests using federal funds from the U.S. Department of Health and Human Services at its San Diego headquarters, where they built production and assembly lines.
By the end of 2020, Mr. Khattak made $7.5 million in salary, bonus, and other compensation. Mr. Sever received $4.2 million, an SEC report revealed.
Before the pandemic in 2019, the company reported no revenue from products, according to its financial filings. That changed in 2020, when it reported $15.4 million in income and $7.6 million in grant funding. By June 30, 2021, Cue Health brought in $212 million in product revenue.
The cartridge-based test was the first molecular test to get FDA Emergency Use Authorization for at-home and over-the-counter use without a prescription, according to the company.
The test can be taken at home to detect COVID-19 by using a nasal swab that is inserted into the test base cartridge. Results are then delivered to the test-taker’s mobile device. Cue Health lists the price for the tests online at $349 for a three-pack.
During the pandemic, Cue Health’s workforce grew to 1,515 full-time employees by the end of 2022.
The company first began slashing its workforce in 2023, cutting more than 200 positions in two rounds of layoffs in January. It also let go hundreds of employees in 2022 and 2023 amid tech industry layoffs statewide.
Companies are required to notify the state at least 60 days before a mass layoff or plant closure.
The company is developing a new test to detect other viruses.
