Failed Covid-19 testing firm Ellume sold to Hough Pharma for $56m

Health company Hough will acquire failed Covid-19 testing firm Ellume in a $56m deal that will see the continued development of its rapid-antigen tests in Australia.

Glen Norris

less than 2 min read

5:58PMDecember 07, 2022

The Australian Business Network

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Hough Pharma will acquire failed Covid-19 testing firm Ellume in a $56m deal that will see the continued development of its rapid-antigen tests in Australia.

Brisbane-based Ellume called in administrators FTI Consulting in August after a bid to take on the US market resulted in losses of more than $100m.

Founded in 2009 by Sean Parsons, the company rose to prominence with its rapid testing technology and large contracts with the US government.

Ellume owes creditors an estimated $49m and employees about $1.69m. Convertible note holders, which included biotech Qiagen, are owed about $89m.

In a statement issued on Wednesday, FTI said it entered into a binding deed and funding agreement with Hough for Ellume after considering other offers for the business.

FTI said the proposal was expected to provide for continued operations and employment in Australia and the US.

Ellume founder Sean Parsons.

FTI said creditors and employees would vote on the deal at a meeting later this month.

FTI said Hough and its related entities operated a diagnostics business that distributed rapid antigen tests to the point-of-care and self-test markets with regulatory approval. Hough are a market-leading supplier to a variety of retailers in Australia, including supermarkets, convenience stores and pharmacies.

Like Ellume, Hough grew rapidly during the pandemic and has developed a business plan that will capitalise on the synergies between Hough and Ellume.

Ellume was hit earlier this year when the Biden administration gave away $US1bn ($1.5bn) in free tests. Ellume made a loss of $87.9m last financial year, despite a huge injection of funds from the US government.

FTI said the deal with Hough included payment of $US38m, and funding to enable operations of the company and creation of a creditors’ trust to make distributions to creditors and employees.