Queensland biotech startup Ellume Health, which last year won a $300 million US government contract to supply Covid home testing kits, has placed its Australian business in voluntary administration.
FTI Consulting were appointed as administrators of Ellume Ltd on Thursday.
In a statement from FTI, administrators John Park and Joanne Dunn said Ellume’s directors appointed them to identify the best path to secure the viability of the business.
“The Administrators will seek to maximise the chances of Ellume exiting the Administration process in an orderly fashion,” Park said.
“The Administrators intend to trade the company on a business-as-usual basis, while we conduct an independent assessment of the financial position and ongoing viability of the business.”
Ellume USA will continue to trade its business as usual throughout the appointment.
The Brisbane-based digital diagnostics startup designed the first rapid self-test for Covid-19 detection authorised by the US FDA, for both asymptomatic and symptomatic use without a prescription.
It February last year the company signed US$231.8 million (AU$305m) deal with the US Department of Defense to build a US factory producing up to 19 million of its home testing kits. The business previously received a US$30 million grant from the US National Institutes of Health to fast fast-track the development of its diagnostic tests.
But not everything went to plan and late last year, around a quarter of the tests were recalled after multiple reports of false positives. Ellume put the figure at around 190,000 of the 3.5 million tests already shipped by October 2021.
CEO and founder Dr Sean Parsons founded the business in 2009 and said they “set out to spark a revolution in the way infectious diseases are diagnosed” with Ellume.
“I am incredibly proud of Ellume’s achievements in what has been an unprecedented, challenging, and dynamic time” he said.
“We are entering into a Voluntary Administration process for the Australian Business to help determine the best course of action to secure and strengthen a future for Ellume.”
A meeting of creditors will be held in mid-September.