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Cue Receives $481M Award

The U.S. Department of Defense awarded San Diego-based Cue Health Inc. $481 million to expand the capacity of its San Diego manufacturing plant. Cue Health makes point-of-care tests to detect SARS-CoV-2, the virus that causes COVID-19.

The two entities announced the award on Oct. 13.

Under the deal, Cue and the federal government plan to deploy 6 million COVID-19 tests to support the government’s domestic virus response by March. The partners are aiming to get Cue Health to the point where it can produce 100,000 of its unique COVID-19 test kits per day.

“We are excited to be part of this historic, first-of-its-kind initiative led by the U.S. government to deploy point-of-care molecular testing to protect the health of Americans,” said Ayub Khattak, founder and CEO of Cue, in a statement distributed by the company. “Our vision in designing the Cue Health Monitoring System was to enable individuals to have more control over their health and lives by providing access to actionable, accurate health data in real time. The U.S. government’s support has and will allow us to fulfill this vision in this particularly critical moment.”

Test Identifies RNA

The Cue COVID-19 test is a molecular test that detects the RNA of SARS-CoV-2 in about 20 minutes using a swab sample taken from the lower part of the nose.

Cue’s COVID-19 test runs on the compact and portable Cue Health Monitoring System. A single-use COVID-19 test kit includes a COVID-19 test cartridge as well as a sample-collection wand.

The single-use Cue test cartridge contains all the biochemistry needed to perform the molecular test. The reusable, battery-operated Cue cartridge reader runs the test cartridge and communicates results to the Cue Health App in about 20 minutes. The Cue Health App on the user’s mobile smart device is the user interface for test information, instructions and display of test results.

Emergency Use Granted

In June, the U.S. Food and Drug Administration gave Cue Emergency Use Authorization, which allows the Cue COVID-19 test to be used in patient care settings under the supervision of qualified medical personnel.

The Defense Department awarded the $481 million sum on behalf of the U.S. Department of Health and Human Services.

The Pentagon announcement described the award as an expansion of the domestic industrial base. Cue said the move will help it onshore its supply base.

Cue has been working on its test for 10 years. Prior to COVID-19, company leaders envisioned that their test would detect influenza as well as other respiratory pathogens.

In June 2020, the business announced that it closed $100 million in Series C funding.

Mayo Clinic conducted a prospective study to evaluate the accuracy of the Cue COVID-19 test. Preliminary information was made available to the Health and Human Services Department. Mayo Clinic and its collaborators plan to publish results in the future.

Not the Typical Defense Contract

The government funding effort was led by the Pentagon’s Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense, in coordination with the DOD Defense Assisted Acquisition Cell and funded through the Health and Human Services Office of the Assistant Secretary for Health to enable and support domestic production of critical medical resources.

A Pentagon announcement described the grant as an “other transaction.”

Such transactions “are legally binding instruments that may be used to engage industry and academia for a broad range of research and prototyping activities,” said a general summary of the financial instrument on a U.S. Air Force website. “OTs are typically defined by what they are not: they are not standard procurement contracts, grants or cooperative agreements.” 

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