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End of the road for Ellume as its American dream becomes a nightmare

Brisbane based medi-tech company Ellume has gone into voluntary administration after Covid created both an opportunity and a disaster for the company.

Sep 01, 2022, updated Sep 01, 2022
Ellume founder Scott Parsons

Ellume founder Scott Parsons

The company, with 180-odd workers at its Richlands facility, was granted a $US231 million by the US Government in 2021 to produce over-the-counter Covid test kits. It was seen as a major breakthrough for the company, started by a Caboolture Hospital doctor Sean Parsons in 2009.

But less than a year after the deal with the US Government, the Biden Administration sent out 500 million free test kits to the US public. It was apparently a big blow for the company which had been touting itself for sale through an ASX listing and IPO earlier this year.

There was also an enormously costly recall by the US Food and Drug Administration of Ellume’s US kits after false positive results were discovered.

The FDA issued a warning that use of the tests “may cause serious adverse health consequences or death”.

Parsons said the company had set out to spark a revolution in the way infectious diseases are diagnosed.

“I am incredibly proud of Ellume’s achievements in what has been an unprecedented, challenging, and dynamic time.

“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.”

There have also been media reports that the company had racked up losses of about $100 million.

Former Federal Treasurer Joe Hockey was a lobbyist for the company.

The VA is only over Ellume’s Australian operations. Parsons had also established a US company, which will carry on and Parsons is currently in the US negotiating new business.

Ellume issued a short statement today which said the Directors of the Australian business Ellume Limited had today appointed John Park and Joanne Dunn of FTI Consulting as Voluntary Administrators, effective immediately to identify the best path to secure the viability of the business.

Ellume USA LLC, is not subject to this voluntary administration and will continue to trade its business as usual throughout the appointment and until further notice. Control of Ellume USA remains with its directors.

FTI’s John Park said the administrators would seek to maximise the chances of Ellume exiting administration process in an orderly fashion.

“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.”

The company has about 180 employees. A meeting of creditors will be held in mid-September.

 

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