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Prenetics did $700M+ in COVID testing revenue in 3 years
At the peak of COVID, Danny Yeung's Prenetics ran 40,000 lab PCR tests a day and booked more than $700M in revenue over three years, listing on the NASDAQ in 2022. Within 18 months of its billion-dollar valuation, the market cap had fallen to roughly $50M as testing demand disappeared.
$700M
COVID testing revenue over 3 years · USD
“At one point, we were doing 40,000 PCR tests a day. Right, we totaled at $28 million. This is laboratory PCR tests. Those 3 years, we did $700 million plus revenue in 3 years' time. We listed on the NASDAQ in 2022. We're a household name.”
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Turned away by Hong Kong's government, he sold $100 at-home PCR tests vs. $400
In April 2020, Hong Kong's chief executive turned down Danny Yeung's offer to use Prenetics' lab for COVID testing. With hospitals charging $300–$400 for a test that cost a fraction of that, Prenetics launched an at-home PCR kit at $100 in about two weeks. Three months later the government asked it to test 300,000 restaurant workers in three weeks.
“And then I knew the cost of a COVID test is a fraction of that, right? And they were making so much money. And at the time, you don't want to go to a hospital to do a COVID test because it means that you may get infected too, right? I was like, you know what, we'll just create our own at-home PCR tests. And then so we launched that within about a little bit more than 2 weeks. And every day we're just trying to help out the community. We're selling it for $100 US. when everyone was selling it for $400.”
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He cut 2,000 staff the moment COVID ended; Cue and Lucira overbuilt and went bankrupt
Once it was clear COVID testing was over, Danny Yeung quickly laid off about 2,000 Prenetics employees. Peers like Cue Health, once a $3B company with $1B in US revenue, and Lucira overbuilt with their own factories and bets on at-home testing, and both went bankrupt within about 18 months.
“it was right when we knew COVID was over, I let go of 2,000 people very, very fast. And that turned out to be a really good decision. Because again, during that time-wise, you had Q Health, you had Lucera, and these were at the time, they were listed companies. At one point, Q Health was $3 billion market cap. They had $1 billion in revenue in the US, right? Lucera, they had another, like, I think they were $2 billion market cap. Yeah. They went bankrupt, you know, 18 months after COVID because they overbuilt.”
Steal thisWhen a demand spike ends, cut to the new reality immediately instead of carrying the boom-era cost base.