An Australian company that clinched the first US clearance for its at-home Covid-19 test kit has collapsed into liquidation after a sale to a competitor fell through.
(Bloomberg) — An Australian company that clinched the first US clearance for its at-home Covid-19 test kit has collapsed into liquidation after a sale to a competitor fell through.
Covid-19 test maker Ellume Ltd.’s sale to Hough Consolidated Pty Ltd. unraveled this week, and the company is now winding down operations, according to a statement. Hough had agreed to buy the company in December for $38 million (A$56 million), but the deal fell apart after Hough made repeated requests to extend deadlines tied to the agreement.
The rapid Covid test maker has struggled for months despite investment from both Australia and the United States. In August, the Brisbane-based company was put into voluntary administration, a process similar to Chapter 11 bankruptcy in the US. Ellume appointed advisory firm FTI Consulting Inc. to oversee the restructuring. Though the company owed creditors around $140 million at the time, its US-based subsidiary remained unaffected until now.
The diagnostic company’s rise was bolstered in part by the US government’s rapid at-home test roll-out. In December 2020, Ellume was the first provider to be granted an emergency-use authorization by the Food and Drug Administration to sell its at-home test kits without a prescription. The milestone came after months of criticism that the US had been too slow to greenlight the kits, which have been key to returning employees to workplaces and moving on from the pandemic more broadly.
Money was plentiful across both the Trump and Biden administrations. Ellume received hundreds of millions of dollars from the US government to scale production of its antigen test kit and open a manufacturing facility in Frederick, Maryland. Ellume’s tests were delivered to Americans across the country for free as a part of a successful program through the US Postal Service.
FTI Consulting and the US Department of Health and Human Services didn’t respond to request for comment.
Ellume’s collapse mirrors struggles other drugmakers and diagnostic firms have had since demand for Covid tests waned and pandemic funding dried up. Lucira Health Inc., another test maker, filed for bankruptcy in February.
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