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  1. Deals Analysis
June 12, 2020

Cue Health raises $100m and receives EUA for portable Covid-19 test

San Diego-based portable testing firm Cue Health has received Emergency Use Authorisation (EUA) from the US Food and Drug Administration (FDA) for its portable molecular Covid-19 test, two days after announcing the closure of a $100m Series C round for its development.

By Chloe Kent

San Diego-based portable testing firm Cue Health has received Emergency Use Authorisation (EUA) from the US Food and Drug Administration (FDA) for its portable molecular Covid-19 test, two days after announcing the closure of a $100m Series C round for its development.

The $100m will be used to more than double the size of Cue’s development and manufacturing operation, from 55,000ft² to 110,000ft². Investors included Johnson & Johnson Innovation, Decheng Capital, Foresite Capital, Madrone Capital Partners and ACME Capital.

The new test runs on the Cue Health Monitoring System and is designed to be used in a point-of-care setting. A nasal swab from the lower part of the nose is used to detect the SARS-CoV-2 virus, with results provided within 25 minutes. As well as the $100m investment, Cue also received $13m from the US Biomedical Advanced Research and Development Authority (BARDA) in late March to support the test’s development.

Cue initially plans to launch its Covid-19 test with select leading healthcare institutions and their satellite centres, followed by US-wide deployment across a variety of healthcare settings.

Pivoting between pandemics

Cue’s rapid testing technology was already established pre-pandemic – the firm has been developing a connected, portable lab designed to provide on-site care for a decade.

Alongside its Covid-19 solution, it is also completing the validation needed to submit its portable at-home test for influenza A and B to the FDA. If approved, this would be the first rapid at-home molecular flu test that enables connectivity via telemedicine networks to a healthcare provider of the patient’s choice.

The start-up raised $45m in series B funding in 2018, and secured another $14m from the US government to develop over-the-counter home-use influenza diagnostics. The government grant was given as part of efforts to prepare for an influenza pandemic, but the technology has been neatly repurposed for the Covid-19 pathogen instead.

Cue maintains that the speed and ease-of-use associated with its test will boost efforts to monitor and control the spread of the virus.

Just how accurate is Cue’s Covid-19 test?

Cue co-founder and CEO Ayub Khattak said: “The Covid-19 pandemic has highlighted the need for a rapid, easy-to-use platform for diagnostics in decentralised settings to respond to existing and emerging threats. Healthcare settings such as nursing homes, emergency departments, and community health clinics need tools to allow them to access molecular test information immediately rather than waiting hours or days for lab results. Cue is grateful that our team’s years of hard work and preparation have put us in a position to assist with the current emergency and future threats.”

The company has yet to share details of the sensitivity and specificity of the test, so it’s hard to say at this stage exactly how useful it will be as a tool in combatting the spread of Covid-19. However, raising $100m from a collective of high-profile investors during a global pandemic is a fairly impressive feat, and the test is said to have been validated via bench and clinical trials, including at third-party clinical facilities.

A spokesperson for the company says: “The test performs at or above anything out there – and at the point of care – making it unique in its ability to be a “back-to-work” tool for businesses, clinics, assisted living facilities and, in the not-too-distant future, home use.

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Verdict deals analysis methodology

This analysis considers only announced and completed deals from the GlobalData financial deals database and excludes all terminated and rumoured deals. Country and industry are defined according to the headquarters and dominant industry of the target firm. The term ‘acquisition’ refers to both completed deals and those in the bidding stage.

GlobalData tracks real-time data concerning all merger and acquisition, private equity/venture capital and asset transaction activity around the world from thousands of company websites and other reliable sources.

More in-depth reports and analysis on all reported deals are available for subscribers to GlobalData’s deals database.

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