Cue Health Reports First Quarter 2022 Results

Cue Health Inc. (Nasdaq: HLTH), a healthcare technology company, (“Cue") today reported financial results for the first quarter of 2022.

Recent Highlights

  • Revenue of $179.4 million in the first quarter of 2022, compared to $64.5 million in the first quarter of 2021
  • 235,000+ Cue Readers shipped through the end of the first quarter of 2022, including 72,000+ in the quarter
  • Cue Covid-19 Test de novo submission to the U.S. Food and Drug Administration (FDA) for full clearance for at-home and point-of-care use
  • Flu clinical studies nearing completion, with full submission to the FDA expected in the third quarter of 2022
  • Flu + COVID multiplex starting clinical studies this quarter, ahead of schedule
  • RSV expected to begin clinical studies in the third quarter of 2022 and Chlamydia + Gonorrhea multiplex in the second half of 2022, as planned
  • Generated cash of $16.6 million in the first quarter 2022, ending with cash and cash equivalents of $426.5 million

“I am pleased with our first quarter 2022 financial results, including $179 million in revenue, which reflects year-over-year growth of 178%. We made excellent progress on our menu expansion activities, with all of our programs on track or ahead of schedule,” said Ayub Khattak, Co-Founder, Chairman and Chief Executive Officer of Cue Health. “Our recent COVID-19 test de novo submission to the FDA marked a major milestone for the company and we believe it will be the first of many submissions as we seek to address a range of diseases and conditions with our menu of molecular diagnostic tests and future care offerings.”

First Quarter 2022 Financial Results

Revenue was $179.4 million in the first quarter 2022, an increase from $64.5 million in the first quarter 2021. The growth was primarily driven by the continued expansion of our customer base and increases in production capacity.

Private Sector revenue grew to 98.0%, or $175.8 million, in the first quarter 2022.

Public Sector revenue was 2.0%, or $3.6 million, in the first quarter 2022, as we completed shipment of our contract with the U.S. Department of Defense in the fourth quarter 2021.

Disposable test cartridge revenue was $163.2 million in the first quarter 2022.

Product gross margin was 51.1% in the first quarter 2022, compared to 53.4% in the first quarter 2021.

Operating expenses in the first quarter 2022 were $89.9 million, excluding cost of revenues, compared to $19.7 million in the first quarter 2021. The increase was driven by growth in our overall organization, digital marketing spend, and spend related to product development.

Net income was $2.8 million in the first quarter 2022, compared to $13.0 million in the first quarter 2021. Earnings per diluted share was $0.02 in the first quarter 2022, compared to $0.08 in the first quarter 2021.

Cash and cash equivalents were $426.5 million as of March 31, 2022.

Guidance

Cue Health expects second quarter 2022 revenues in the range of $50 million to $55 million.

About Cue Health

Cue Health (Nasdaq: HLTH) is a healthcare technology company that makes it easy for individuals to access health information and places diagnostic information at the center of care. Cue Health enables people to manage their health through real-time, actionable, and connected health information, offering individuals and their healthcare providers easy access to lab-quality diagnostics anywhere, anytime, in a device that fits in the palm of the hand. Cue Health’s first-of-its-kind COVID-19 test was the first FDA-authorized molecular diagnostic test for at-home and over-the-counter use without a prescription and physician supervision. Outside the United States, Cue Health has received the CE mark in the European Union, Interim Order authorization from Health Canada, regulatory approval from India’s Central Drugs Standard Control Organisation, and PSAR authorization from Singapore’s Health Sciences Authority. Cue Health was founded in 2010 and is headquartered in San Diego. For more information, please visit www.cuehealth.com.

Forward-Looking Statements

Statements in this press release about future expectations, plans and prospects, including statements related to the submission of any FDA applications and expectations around receiving clearance, growth in our customer base, expectations regarding production capacity, potential technology enhancements and future performance and our guidance, including first quarter 2022 guidance, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements”. The words, without limitation, “continue,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “would,” “develop,” “pave,” “seek,” “offer,” “grow”, “expand” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these or similar identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including those related to the expected capabilities of the new Omicron-specific genotyping Cue test, our ability to maintain customer growth rates, our ability to increase private sector revenue, our ability maintain or replace the revenue historically generated from our government contracts, our ability to effectively scale our manufacturing capacity to meet contractual obligations with our customers and market demand, and the factors discussed in the "Risk Factors" section of Cue’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 to be filed with the SEC. Any forward-looking statements contained in this press release are based on the current expectations of Cue’s management team and speak only as of the date hereof, and Cue specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

This product has not been FDA cleared or approved; but has been authorized by FDA under an Emergency Use Authorization, or EUA. This product has been authorized only for the detection of nucleic acid from SARS-CoV-2, not for any other viruses or pathogens. The emergency use of this product is only authorized for the duration of the declaration that circumstances exist justifying the authorization of emergency use of in vitro diagnostics for detection and/or diagnosis of COVID-19 under Section 564(b)(1) of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 360bbb-3(b)(1), unless the declaration is terminated or authorization is revoked sooner.

 

CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except share data)

 

 

Three Months Ended

March 31,

 

 

2022

 

 

 

2021

 

Revenue

 

 

 

Product revenue

$

177,454

 

 

$

64,499

 

Grant and other revenue

 

1,956

 

 

 

 

Total revenue

 

179,410

 

 

 

64,499

 

 

 

 

 

Operating costs and expenses:

 

 

 

Cost of product revenue

 

86,697

 

 

 

30,035

 

Sales and marketing

 

34,168

 

 

 

430

 

Research and development

 

28,787

 

 

 

7,409

 

General and administrative

 

26,910

 

 

 

11,870

 

Total operating costs and expenses

 

176,562

 

 

 

49,744

 

Income (loss) from operations

 

2,848

 

 

 

14,755

 

 

 

 

 

Interest expense

 

(51

)

 

 

(535

)

Other income (expense), net

 

6

 

 

 

37

 

Net income (loss) before income taxes

 

2,803

 

 

 

14,257

 

 

 

 

 

Income tax expense (benefit)

 

 

 

 

1,226

 

Net income (loss)

$

2,803

 

 

$

13,031

 

Net income (loss) per share attributable to common stockholders – basic

$

0.02

 

 

$

0.09

 

Weighted-average number of shares used in computation of net income (loss) per share attributable to common stockholders – basic

 

146,526,370

 

 

 

18,378,777

 

Net income (loss) per share attributable to common stockholders – diluted

$

0.02

 

 

$

0.08

 

Weighted-average number of shares used in computation of net income (loss) per share attributable to common stockholders – diluted

 

153,036,804

 

 

 

25,904,338

 

 

CONDENSED BALANCE SHEETS

(In thousands, except share amounts and share data)

 

 

March 31,

2022

 

December 31,

2021

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

426,465

 

 

$

409,873

 

Restricted cash

 

13,838

 

 

 

13,837

 

Accounts receivable

 

75,830

 

 

 

104,589

 

Inventory

 

132,567

 

 

 

88,388

 

Prepaid expenses

 

42,902

 

 

 

45,889

 

Other current assets

 

9,807

 

 

 

7,446

 

Total current assets

 

701,409

 

 

 

670,022

 

Property and Equipment, Net

 

182,750

 

 

 

177,456

 

Prepaid rent

 

480

 

 

 

1,567

 

Operating lease right-of-use assets

 

84,212

 

 

 

79,474

 

Intangible assets, net

 

9,240

 

 

 

7,673

 

Other non-current assets

 

5,679

 

 

 

3,868

 

Total assets

$

983,770

 

 

$

940,060

 

Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

48,842

 

 

$

37,208

 

Accrued liabilities and other current liabilities

 

39,809

 

 

 

29,498

 

Income taxes payable

 

8,246

 

 

 

8,297

 

Deferred revenue, current

 

84,629

 

 

 

82,165

 

Operating lease liabilities, current

 

7,594

 

 

 

7,147

 

Finance lease liabilities, current

 

2,620

 

 

 

2,621

 

Total current liabilities

 

191,740

 

 

 

166,936

 

Deferred revenue, net of current portion

 

10,283

 

 

 

10,283

 

Operating leases liabilities, net of current portion

 

47,626

 

 

 

46,464

 

Finance lease liabilities, net of current portion

 

2,627

 

 

 

3,271

 

Other non-current liabilities

 

6,356

 

 

 

6,356

 

Total liabilities

 

258,632

 

 

 

233,310

 

 

 

 

 

Commitments and contingencies (Note 16)

 

 

 

 

 

 

 

Stockholders’ Equity (Deficit)

 

 

 

Common stock, $0.00001 par value; 500,000,000 and 500,000,000 shares authorized, 146,958,296 and 146,402,991 issued and outstanding at March 31, 2022 and December 31, 2021, respectively

 

1

 

 

 

1

 

Additional paid-in-capital

 

746,352

 

 

 

730,767

 

Accumulated deficit

 

(21,215

)

 

 

(24,018

)

Total stockholders’ equity (deficit)

 

725,138

 

 

 

706,750

 

Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

$

983,770

 

 

$

940,060

 

 

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