Lucira Health files Chapter 11 bankruptcy with plans to sell business

By Sarah Lizee

Olympia, Wash., Feb. 22 – Lucira Health, Inc. filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on Wednesday, according to a press release.

The company said it intends to pursue a sale of its business while continuing to support its customers during the Chapter 11 process.

Lucira Health said it grew rapidly over the past several years during the Covid-19 pandemic. Demand for the company’s Covid-19 test kits surged and Lucira posted positive net income in its 2022 first quarter for the first time since its inception.

With its test kit available in the market and a new combination test kit for Covid-19 and flu developed and awaiting U.S. Food and Drug Administration Emergency Use Authorization (EUA), the company moved forward in manufacturing test kits to fulfill future customer demand.

Lucira anticipated an EUA for an over-the-counter indication on the combination test in August, though the FDA’s approval process became protracted, resulting in high expenditures without new revenue from the combined test kit during the 2022-2023 flu season. The company said its operations were significantly impacted, leading to the Chapter 11 filing and sale process.

In October, Lucira’s board of directors approved various initiatives to rebalance Lucira’s cost structure and explore strategic alternatives.

As part of these efforts, the company instituted cost reduction plans, reduced its workforce and realigned several vendor agreements. It also engaged Armanino LLP, an independent accounting and business consulting firm, to pursue strategic options, including a potential sale process.

Lucira said it intends to use available cash on hand to fund post-petition operations and costs in the ordinary course. The company isn’t seeking debtor-in-possession financing.

To minimize the adverse effects on its business and the value of its estate, the company has filed customary motions with the bankruptcy court to sustain its operations in the ordinary course.

Young Conaway Stargatt & Taylor, LLP and Cooley LLP are serving as counsel and Armanino is serving as both a financial adviser and investment bank to Lucira during the Chapter 11 case.

In its petition, the company lists 200 to 999 creditors, $145.9 million in assets and $84.72 million in liabilities. The company’s $65 million of trade debt makes up the bulk of the liabilities.

Its largest unsecured creditors are Nypro DR, LLC, Dominican Republic Branch, based in San Cristobal, Dominican Republic, with a $15.97 million trade claim, International Point of Care, Inc., based in Toronto, with a $2.73 million trade claim, Pegatron Corp., based in Taipei, Taiwan, with a $2.62 million trade claim, AMA Plastics Inc., based in Riverside, Calif., with a $1.91 million trade claim, New England Biolabs, based in Boston, with a $1.65 million trade claim, Biosearch Technologies, Inc., based in Petaluma, Calif., with a $1.59 million trade claim, and Calvary Robotics, based in New York, with a $1.47 million trade claim.

Lucira is a medical technology company based in Emeryville, Calif. The Chapter 11 case number is 23-10242.

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