Cue Health (NASDAQ: HLTH) shares bounced back in the pre-market trading today after an 18% intraday dip on Friday due to an FDA warning about its at-home COVID-19 tests.
The US Food and Drug Administration (FDA) recently issued a stern warning advising consumers against Cue Health’s at-home Covid-19 tests use. This announcement comes just one week after the FDA issued a warning letter to Cue Health, highlighting the company’s failure to comply with the conditions outlined in the emergency use authorizations (EUAs) for its tests.
The FDA reports that the company has made changes to generate, receive, and interpret the electrochemical signals within the test device. These alterations, not sanctioned by the FDA, have the potential to compromise the tests’ stability and lead to inaccurate results, raising significant concerns for public health and safety.
Cue Health, headquartered in San Diego, has faced challenges since the onset of the pandemic, including a reduced demand for Covid-19 tests. This downturn resulted in substantial layoffs, with the company letting go of 714 employees in January and April 2023, 245 in January 2024, and another 230 this month. The company went public in 2021 with a value of nearly $2.3 billion and reported losses of $194.1 million in 2022 and $373.5 million in 2023.
The Cue Health COVID-19 test received FDA authorization for point-of-care testing in June 2020 and emergency use authorization for at-home use in March 2021. In October 2020, Cue secured a $481 million deal with the US Government to increase test production, which the NBA notably used for player screenings.
The nucleic acid amplification test (NAAT) diagnoses COVID-19 by analyzing a lower nasal swab sample. This sample is processed with the single-use Cue Sample Wand and the reusable Cue Cartridge Reader with results delivered to a smartphone app.
FDA Warning Letter to Cue Health
In its 9 May warning letter, the FDA has given Cue Health (NASDAQ: HLTH) 15 days to detail the specific actions taken to address the violations and to explain how they plan to prevent future issues. The FDA also recommended that users retest with a different FDA-approved Covid-19 test.
Meanwhile, iHealth Lab’s Covid-19/Flu A&B test recently received emergency use authorization from the FDA for individuals aged two and above. This 3-in-1 test kit, which provides results in 15 minutes, is one of the first over-the-counter rapid antigen tests for COVID-19 and influenza A and B in the US.
Cue Health (NASDAQ: HLTH) Stock Movement
As of 04:28 a.m. (Eastern Time) Monday, HLTH stock traded at $0.1069, marking a 10.89% increase compared to the previous trading session.
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