How Cue Health has adapted to COVID-19 testing challenges as cases spike

Cue Health Inc. CEO Ayub Khattak joins Yahoo Finance Live to discuss how his company has adapeted its COVID-19 test to fit the growing demand.

Video Transcript

[MUSIC PLAYING]

ZACK GUZMAN: Welcome back to Yahoo Finance Live. President Biden has declared a likelihood to increase this nation's effort to tackle the coronavirus pandemic, stressing a wartime-like effort needed to get ahead of this. And one of the big challenges facing America has long been the issue of testing. We saw that be a big problem earlier in the pandemic, but still a lot of questions around what we are doing to address that problem right now.

For more on that, I want to bring on the CEO of one of the players in this space, Cue Health CEO Ayub Khattak joins us right now. And appreciate you coming on here today to discuss it because we've seen a lot of companies try and stress point of care testing, right? The thing that you're working on here. You guys had a contract with DOD and HHS, almost $500 million, to tackle this issue. So what has been maybe the biggest problem with rolling out tests at point of care so far, and how are you guys helping in that?

AYUB KHATTAK: Yeah, so our product is, this is the reader. It's small, battery operated, and you have the COVID-19 test cartridge. So the way it works is, you insert the cartridge into the reader, you take a lower nasal swab, and you insert it into the cartridge. And the test starts automatically, and the results are on the mobile app in about 90 minutes.

And so, the reason why that's significant is because this test is a lot easier to use than most tests. Yet it's got comparable accuracy and performance to the centralized laboratory techniques like PCR. So this is not an antigen test. It is a nucleic acid amplification test and happens to be very easy to use, connected to the mobile device.

So we've been rolling this out to the states as part of our contract with the government. We just expanded from a pilot set of five states to 10 states. And it's now being used in 300 nursing homes in Utah. It's being used in remote villages in Alaska. And it's being used to help screen homeless people in Minnesota. So those are just a set of examples, but it's starting to hopefully make a good impact on the community. And we're excited to be able to use our technology to help people.

ZACK GUZMAN: Yeah, and Ayub, let me ask you this, too, because we're obviously about to see in this next stimulus package more money thrown at the issue of addressing this pandemic. But a lot of people might point back to what happened earlier in 2020 and just say what was the issue with testing. Was it that we weren't funding it, or was it just kind of production catching up? And obviously, a test like yours is going to take a while to scale up.

But when we think about the issues that had faced the entire testing industry, whether it is agents-- the testing agents that are required here or just kind of, you know, the stress on America's labs, what was the biggest failure in your mind for maybe why Americans had to wait, in some cases, five, seven days to get test results back, which would have obviously helped a lot earlier in the pandemic?

AYUB KHATTAK: Well, you have a new virus that nobody's ever seen before, and you have an industry that has to catch up and be able to produce a test against that very specific virus. You have a regulatory framework to work within. So I think, you know, on the testing manufacturer side, it's not that trivial to create a new test and go through the regulatory framework. It's-- so the government, you know, they did what they could to ramp up the testing and provide funding to companies.

BARDA did an excellent job funding a number of companies to help get more tests onto the market. And we were one of those companies. And then, our tests performed quite well in the field. And so, they were able to give us a contract to scale up our contribution. But this is a long-term effort for the government to enhance the testing capabilities of the country for not only this pandemic to help crush this pandemic, but also to be prepared for the future. And I think this COVID has just highlighted the need for easy to use, fast diagnostics that are accurate. And I think now the industry will adapt to be able to produce these.

ZACK GUZMAN: And I guess, you know, it helps that even though we are progressing through this and getting better at dealing with the issues, it does sound like this issue is going to be around for a while, even in 2021. When you think about the testing capabilities, where we're at now, what do you see as possible in some of these plans moving forward? Because obviously, as people return to the office, testing is going to be key.

You have plans across the pond, UK Prime Minister Boris Johnson maybe talking about paying people who test positive for the virus to stay at home. Obviously, a lot of these policy ideas might stem back to having enough tests to test every American. How possible are some of those things here in the US now, as all of these projects you're talking about have been scaled up and the money has funded some of these projects like yours?

AYUB KHATTAK: Yeah, I mean, I think that there's going to be a significant trend to testing in a non-centralized environment, which will make this-- getting these tests easier. So I think home use is going to be a substantial thing. So having the test broadly distributed, decentralized, it opens up a lot of possibilities that it makes it easier to protect workplace environments. It makes it easier to test people right before they get on a plane, right after they get off of a plane.

So I think that it's going to be a game changer when all these technologies get to scale and get distributed to more people. So it's going to be a multimodal effort. It's vaccines, it's treatments, it's testing. It's the hard work of the healthcare workers and the healthcare system to crush this virus over time. And the public health officials have done a tireless job to be able to get tests and vaccines and treatments into people's hands. And I think it's a long-term effort. And it's going to continue to be a strong effort over the course of years.

ZACK GUZMAN: Ayub Khattak, Cue Health CEO, appreciate you coming in here to chat that and appreciate the walkthrough on how that thing works, too.