Covid Test Maker Cue Health Taps Morgan Stanley, Goldman for IPO

Covid test maker Cue Health Inc. is planning an initial public offering as soon as this year, according to people with knowledge of the matter.

The health-care technology company is working with banks including Morgan Stanley and Goldman Sachs Group Inc. on a listing, said the people, who asked not to be identified discussing information that isn’t yet public.

The company’s plans, including the timing of an IPO, could still change.

A spokesperson for Cue Health didn’t immediately respond to a request for comment. Representatives for Morgan Stanley and Goldman Sachs declined to comment.

Cue Health’s tests were used last year by the National Basketball Association to help limit the spread of the coronavirus among team members who played and lived in a so-called bubble in Florida.

The U.S. Department of Health and Human Services in October said it would invest $481 million in the San Diego-based company to boost manufacturing of the tests, which processes results in about 20 minutes. Last month, the tests were given emergency approval by the U.S. Food and Drug Administration for home and over-the-counter use.

Venture Backers

Cue Health, led by co-founder and Chief Executive Officer Ayub Khattak, raised $100 million last June from investors including Madrone Capital Partners, Johnson & Johnson Innovation, Decheng Capital and Foresite Capital. The Information reported in December that the company had discussed raising new funding that could have boosted its valuation above $2 billion.

The company’s Covid-19 tests are being used in 10 U.S. states at schools, nursing homes and hospitals, among other places. Cue Health has said it’s also working on at-home influenza testing.

Last month, it named John Gallagher, a former Becton Dickinson & Co. executive, as chief financial officer. It also hired ex-Livongo executive Erica Palsis as general counsel.

Health-care companies focused on coronavirus testing are increasingly turning to public markets to fund growth.

LumiraDx, Lucira

LumiraDx Ltd. last week agreed to go public through a merger with a special purpose acquisition company. Lucira Health Inc., which went public in February, saw its stock spike this week after its home-testing kit received FDA approval.

Hong Kong-based Prenetics Ltd., whose Covid-19 tests were used by the English Premier League, is also planning an IPO, Nikkei has reported.

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