IPO Alert: COVID-19 test maker Cue Health is all set to go public

Just eight months into the year, IPO activity has already reached all-time highs, with tech firms and biotechnology startups leading the rally. Cue Health, Inc. is the latest healthcare company to join the IPO bandwagon, after registering strong revenue growth in recent months.   

$100 Mln IPO

The San Diego-headquartered provider of coronavirus test kits is preparing to list its shares on the Nasdaq Global Market under the ticker symbol HLTH. The company is looking to raise up to $100 million through the offering. The lead book-running managers for the offering are Goldman Sachs, Morgan Stanley, and Cowen. Meanwhile, the number of shares being offered and the offer price are not yet known.

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Cue Health’s COVID-19 test, comprising a reader and test kit, is its first commercially available test. According to the company, the portable test provides highly accurate, lab-quality results — detecting even emerging variants of the virus. The mobile app that supports the test, and linked to the Cue Health Monitoring System, is capable of delivering results within 30 minutes. The test is already used by enterprises, schools, clinics, and sports leagues in the U.S.

In a connected healthcare ecosystem, such real-time data offered in portable form could significantly transform the way people manage their health. The diagnostics model, with a digital base, would help the company align well with the ongoing healthcare digital transformation and take its activities beyond diagnostics. Currently, it has more than100 patents in the portfolio, and the number is growing.

Global Reach

Recently, Indian regulators approved Cue health’s molecular point-of-care COVID-19 test for use in that country, on the heels of the company receiving international authorization for global health support in the European Union and securing interim order authorization in Canada.

Cue Health’s molecular diagnostic platform, which facilitates easy access to medical diagnostics, is the first of its kind available without a prescription. However, the company’s operation is not limited to coronavirus tests – currently, it is developing tests for other conditions in areas like respiratory health and women’s health. In order to meet the fund requirements, it raised $235 million in a private financing round in May.

Strong Topline Growth

In fiscal 2020, the company’s revenues more than tripled to about $23 million, aided by strong adoption of its COVID tests. The benefit from the top-line growth was more than offset by a sharp increase in operating expenses. As a result, net loss widened to $47.3 million or $2.90 per share from $20.6 million or $1.31 per share in fiscal 2019.

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Read management/analysts’ comments on quarterly reports

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Cue Health was founded more than a decade ago by Clint Sever and Ayub Khattak, who has served as the chief executive officer since then.