Lucira Health (NASDAQ:LHDX) stock is taking a beating today after the company filed for Chapter 11 bankruptcy protection.
To go along with that filing, Lucira Health says it intends to sell its business during the bankruptcy process. The company notes that it intends to continue to serve its customers throughout the process.
The company notes in a press release that this bankruptcy filing comes despite major growth during the Covid-19 pandemic. That came from the company’s Covid test kits that were sold during that time.
However, the momentum couldn’t continue as several factors weighed on Lucira Health. That includes long wait periods for the U.S. Food and Drug Administration (FDA) approval process. That left it with no new revenue from combined Covid and flu test kits for the 2022 to 2023 flu season.
Leadership Comments on the Bankruptcy Filing
Erik Engelson, president and CEO of Lucira Health, said the following about what led to the company’s bankruptcy:
“Unfortunately, as restrictions lessened in 2022, we saw lower demand for COVID-19 tests. This, combined with slower than anticipated regulatory approval for the new combined test kit developed for the 2022-2023 flu season led to insufficient revenue and capitalization to offset expenditures. Despite every effort to reduce capital outlays and restructure our business, we took this action to protect and maximize the value of our assets.”
LHDX stock is down 34.1% as of Thursday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
