Lucira Health announced it filed for Chapter 11 bankruptcy last week just as the diagnostics company received Emergency Use Authorization from the FDA for an at-home combination COVID-19 and flu test.
In the company’s bankruptcy filing, it lists about $146 million in assets and liabilities of around $85 million. Lucira plans to use approximately $4.5 million cash on hand to fund operations as it seeks to sell itself.
Lucira said it saw less demand for its home COVID-19 test in 2022, and the FDA’s regulatory process for its combination test took longer than anticipated.
“We regret that we had no option but to file for Chapter 11 bankruptcy and that this occurred days before we received regulatory authorization,” Erik Engelson, president and CEO of Lucira Health, said in a statement. “Unfortunately we were unable to bridge what became a protracted authorization cycle time within our current capital structure and it remained unclear to us when the regulatory authorization would come through, despite working closely with FDA. The Lucira COVID-19 & Flu Home Test would have been especially useful during the recent, severe respiratory season, and we had produced inventory for an anticipated autumn 2022 launch.”
The combination test marks the first authorization for an over-the-counter and at-home diagnostic that can detect and differentiate between the viruses that cause flu and COVID-19. It uses a nasal swab to provide results in about 30 minutes.
“Today’s authorization of the first OTC test that can detect Influenza A and B, along with SARS-CoV-2, is a major milestone in bringing greater consumer access to diagnostic tests that can be performed entirely at home,” Dr. Jeff Shuren, director of the FDA’s Center for Devices and Radiological Health, said in a statement. “The FDA strongly supports innovation in test development, and we are eager to continue advancing greater access to at-home infectious disease testing to best support public health needs. We remain committed to working with test developers to support the shared goal of getting more accurate and reliable tests to Americans who need them.”
THE LARGER TREND
Founded in 2013, Lucira received Emergency Use Authorization for its COVID-19 home test in late 2020. In October, the company said it would lay off 56 employees, or about a quarter of its workforce.
Many digital health and health tech companies have struggled financially after expanding and raising large amounts of cash in 2021. Another home diagnostics company, Cue Health, recently announced plans to cut 26% of its workforce.