Google's provider of at-home Covid-19 tests is now a $3 billion company traded on Nasdaq

3 weeks ago

Cue Health, which makes at-home Covid-19 investigating kidds, made its nationalist marketplace debut Friday.

Cue Health

In April, Google started sending at-home Covid-19 tests to its U.S. employees from a little-known start-up successful San Diego called Cue Health.

Most of Cue Health's concern up to that constituent had travel from a woody with the U.S. Department of Defense to supply accelerated tests to the national government. Google instantly became the health-tech company's biggest backstage assemblage customer.

Cue Health has utilized that narration to assistance physique a communicative compelling capable for nationalist marketplace investors. On Friday, the institution debuted connected the Nasdaq nether ticker awesome "HLTH," and the banal climbed 25% to $20 astatine the close. That values Cue Health astatine $2.9 billion.

Founded successful 2010, Cue Health had lone a tiny magnitude of gross anterior to the Covid-19 pandemic. It spent the amended portion of a decennary arsenic a diagnostic investigating institution successful probe mode.

Everything changed successful 2020, erstwhile the worst pandemic successful a period abruptly made entree to instant investigating essential. In June 2020, the institution received its archetypal exigency usage authorization from the Food and Drug Administration for Covid-19 tests.

Cue Health's trial kit includes a wand, cartridge and reader. Users instrumentality a nasal swab with the wand and insert it successful the tiny box, wherever a scholar feeds results to a smartphone app wrong astir 20 minutes. There's nary request for processing astatine a lab.

In July 2020, a period aft the exigency authorization, the National Basketball Association began utilizing Cue Health tests for its "NBA bubble" successful Orlando, wherever games were restarting without fans. Three months aft that, the institution signed a $480.9 cardinal deal with the DoD, to "meet the unprecedented request for accelerated and close molecular diagnostic testing," according to the prospectus.

Cue Health Covid-19 test

Cue Health

The institution is inactive operating nether exigency usage authorization arsenic the products person not been afloat FDA cleared oregon approved.

"We've been truly moving hard done the pandemic," Cue Health CEO Ayub Khattak said successful an interrogation with CNBC connected Friday aft the IPO. The squad "showed large determination to standard successful the midst of the pandemic, which was rather a challenge."

Khattak founded the institution with merchandise main Clint Sever primitively nether the sanction Ruubix. Before past year, they were mostly focused connected probe and development.

The latest boon to the concern came from Google, a woody that wasn't announced publically and was archetypal disclosed successful 1 condemnation successful Cue Health's IPO prospectus earlier this month.

"In April 2021, the Company and Google LLC entered into an statement to supply Cue Health Readers and Cue COVID-19 Test Kits to Google's U.S.-based employees done twelvemonth end," the filing said.

Cue said that gross successful the archetypal fractional of the year, reached $201.9 million, up from $5 cardinal successful the aforesaid play a twelvemonth earlier. Some 84% of its gross came from income to the nationalist sector. Of the remaining $34.8 cardinal successful revenue, $28.9 cardinal was from a "single endeavor customer," Cue Health said.

Khattak declined to sanction that customer, but radical acquainted with the substance confirmed to CNBC that it's Google. The radical asked not to beryllium identified due to the fact that the accusation is confidential.

Google did not respond to requests for comment.

Scaling up production

As of August, Cue had sold 5 cardinal investigating kits and said that it's manufacturing cartridges astatine a complaint that exceeds 15 cardinal a year.

"We expect increasing our manufacturing capableness to a complaint equivalent to tens of millions of Cue Cartridges per twelvemonth by the extremity of 2021," the filing said.

Cue Health has had to prosecute to conscionable scaling demands. The institution had less than 100 employees successful 2020 and present has much than 1,250. In April, Glenn Wada, a elder vice president astatine Salesforce, was named main commercialized officer. Khattak said that contempt the competitiveness for tech talent, Cue Health has been capable to enlistee due to the fact that it's addressing specified a tangible planetary problem. 

Beyond Covid-19, Cue Health says it's moving connected a fig of tests that tin beryllium completed utilizing saliva, urine and humor samples and nasal swabs. Those diagnostic tests volition screen things similar respiratory health, intersexual wellness and determining hazard of chronic illnesses specified arsenic bosom disease.

Khattak said the institution hopes to supply direct-to-consumer virtual attraction and investigating for communal illnesses similar strep throat.

For Google, the statement with Cue Health has allowed employees to bid further trial strips done the company's interior resources portal. Without the availability of in-office perks similar escaped nutrient oregon different amenities, the institution has tried different ways to entreaty to employees, offering resources for intelligence and carnal health.

Google had planned for employees to instrumentality to the bureau successful September, but that day got pushed to Jan. 10, 2022.

Khattak said the Google concern began due to the fact that his institution was utilizing the Google Cloud Platform, which competes with Amazon Web Services and Microsoft Azure. Google approached Cue Health erstwhile it realized that its workforce needed the benignant of investigating merchandise Khattak's squad was developing.

"It benignant of converged astatine that point," Khattak said. "We were doing everything we could to standard up and conscionable demands of our customers truthful we were not needfully successful outreach mode. But fixed the transportation we had, we chose them and they chose us."

Their enactment unneurotic goes deeper.

In August of this year, Cue and Google Cloud entered into a concern to make real-time variant tracking and sequencing of Covid-19, the prospectus says.

They purpose to make an "advanced respiratory biothreat detection strategy spanning from the Company's at-home diagnostic investigating to afloat real-time viral sequencing arsenic good arsenic analytical and predictive capableness utilizing Google Cloud powered solutions," according to the filing.

Another investigating institution connected trial

Cue's nationalist debut comes arsenic Elizabeth Holmes, the laminitis of defunct blood-testing institution Theranos, is connected criminal trial for ligament fraud and conspiracy to perpetrate ligament fraud. She has pleaded not guilty.

Khattak said Theranos people comes up successful conversation, fixed the timing of the 2 events.

"As a institution increasing and having that benignant of successful your backyard, basically, it's thing that fundamentally creates a overmuch higher hurdle," Khattak said. "But, we are successful the fortunate presumption that we person a merchandise that's widely used, There's nary achromatic container that you can't recognize what's going on."

Cue Health besides has autarkic objective studies from the Mayo Clinic and has been thoroughly vetted done wellness validations.

"We're excited to beryllium done a batch of those hurdles," Khattak said.

WATCH: Cue Health CEO connected FDA exigency authorization for Covid at-home tests