Cue Health nets $481M DOD contract to deliver hand-held coronavirus tests

After raising $100 million this year, Cue Health has received another $481 million from the U.S. Department of Defense (DOD) to dramatically ramp up production of its hand-held diagnostic test for COVID-19, with plans to deliver 6 million tests to the federal government over the next six months.

The company’s rapid molecular test, greenlighted by the FDA in June, is based on a nasal swab and a cartridge-based reader, and it delivers results through a smartphone within about 20 minutes. 

Cue Health aims to provide 30,000 of the reusable, battery-powered instruments by March 2021, while increasing production of its testing kits to 100,000 per day. The DOD award aims to boost the company’s domestic manufacturing capacity, with the kits and readers to be made exclusively through its San Diego facilities.

The tests acquired will be delivered to the public through the government’s pandemic supply initiatives, U.S. officials and the Department of Health and Human Services (HHS) said

RELATED: Cue Health raises $100M to boost portable coronavirus test development

According to Cue Health, the test demonstrated 98.7% sensitivity and 97.6% specificity on average, taken across four clinical studies. Preliminary results from an additional study conducted by the Mayo Clinic were delivered to HHS but have not yet been made public, the company said.

The test had previously been selected by the U.S. Biomedical Advanced Research and Development Authority for support and received a $13 million contract in March, after the company secured funding in 2018 to develop a similar testing platform for the flu.

Not long after that, Cue Health was able to raise $100 million in venture capital money, and it announced plans in June to double its footprint in San Diego to more than 110,000 square feet.