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HHS is investing $ 480 million in Cue Well being to advance speedy coronavirus check manufacturing

The U.S. is investing $ 481 million in California-based startup Cue Health to advance manufacturing of its coronavirus test, which provides results in about 20 minutes and doesn't need to be processed in a lab, U.S. authorities said Tuesday With.

Cue, which is supported by Johnson and Johnson among others, will increase the production of several thousand test kits per day now to 100,000 per day through March, according to data from the Department of Health and Human Services. The US will purchase 6 million tests and 30,000 laboratory instruments that will be used to process the tests.

Ayub Khattak, CEO of Cue Health, told CNBC that the company is expected to achieve "more than half" that goal by the end of the year.

"Cue's tests provide results in approximately 20 minutes with the accuracy of laboratory tests that can take several days. This expands our dramatically growing range of rapid tests that support safe reopening," said Alex Azar, secretary of HHS, in a statement .

Cue is a molecular test and uses an in-house nasal swab called the Cue Sample Wand, which is taken from the bottom of the nose, according to HHS. This is different from some other rapid molecular tests that use nasopharyngeal swabs that are inserted deep into the nose.

Test results can be delivered directly through the Cue Health mobile app, HHS said. Khattak added that the digital test results will make it easier to share tests with appropriate health officials and possibly conduct contact tracing to help reduce the spread of the virus.

According to Khattak, HHS awarded the award to Cue Health based on preliminary data from an independent study on the accuracy of the test conducted by the Mayo Clinic. The study has not yet been published.

"The cue testing system is highly sensitive and specific and is close to the best large referral lab systems," said Adm. Brett Giroir, assistant health secretary who leads the government's testing efforts, in a statement. "This investment will allow Cue Health, Inc. to grow its footprint and increase production significantly. This will allow this technology to be used across our testing ecosystem for the benefit of all Americans."

The company announced on June 12 that it had received emergency approval for the test from the Food and Drug Administration. The regulator approved the test "anywhere under the supervision of qualified medical personnel," the company said.

Khattak said in a phone interview that the test is already being used by a number of customers, including the National Basketball Association, which successfully played off its season this year by creating a "bubble" in Orlando, Florida. The test is "the official point-of-care test for the NBA," he said.

He added that the company hopes to eventually approve the test for home use.

"Our North Star was at home for the platform the whole time," he said in a telephone interview. "We believe we are able to get this additional regulatory extension for home use. That is certainly what we would like to do."

Cue Health developed the test in collaboration with the Biomedical Advanced Research and Development Authority, which is part of HHS. The partnership began in 2018 when BARDA awarded Cue $ 14 million to develop a molecular influenza test with the option to extend the agreement to a total of $ 30 million for 60 months. At the beginning of the pandemic, BARDA expanded its partnership with Cue to develop a test for the coronavirus.

"I think this is a really nice bow," said Khattak of the partnership. "You saw the potential. You worked on it. You had an option there that may have anticipated coronavirus. It was activated and we brought the product to market."

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