Queensland biotech startup Ellume Health, which won a $300 million US government contract last year to provide Covid home testing kits, has placed its Australian company under voluntary administration.
FTI Consulting was appointed as administrators of Ellume Ltd on Thursday.
In a statement from FTI, administrators John Park and Joanne Dunn said Ellume’s directors hired them to find the best way to ensure the company’s viability.
“The administrators will try to maximize the chances of Ellume exiting the administration process in an orderly manner,” Park said.
“The trustees intend to trade the company on a business-as-usual basis while we conduct an independent assessment of the company’s financial position and continued viability.”
Ellume USA will continue its business as usual during the appointment.
The Brisbane-based digital diagnostics startup designed the first rapid self-test for Covid-19 detection, approved by the US FDA, for both asymptomatic and symptomatic over-the-counter use.
In February last year, the company signed a $231.8 million (AU$305 million) deal with the US Department of Defense to build a US factory that will produce up to 19 million of its home test kits. The company previously received a US$30 million grant from the US National Institutes of Health to accelerate development of its diagnostic tests.
But not everything went according to plan, and about a quarter of the tests were recalled late last year after multiple reports of false positives. Ellume estimated the figure to be about 190,000 of the 3.5 million tests already shipped in October 2021.
CEO and founder Dr. Sean Parsons founded the company in 2009 and said she “was meant to revolutionize the way infectious diseases are diagnosed” with Ellume.
“I am incredibly proud of Ellume’s achievements in an unprecedented, challenging and dynamic time,” he said.
“We are entering into a voluntary administration process for the Australian company to help determine the best course of action to secure and strengthen a future for Ellume.”
A creditors’ meeting will be held in mid-September.