Benzinga | Aug 20, 2021 03:49PM EDT

Dwindling COVID-19 Test Demand Forces LumiraDx Cut SPAC Deal Value

* Fall in demand for COVID-19 screening has led LumiraDx to slash $2 billion off the value of a planned reverse merger with a special purpose acquisition company (SPAC).

* See: LumiraDx Withdraws $100M IPO In Favor Of $5B SPAC Merger.

* First announced in April, the U.K.-based diagnostics company aimed to debut on NASDAQ with the blank-check firm CA Healthcare Acquisition Corp (NASDAQ:CAHC) and had charted out a $5 billion pro forma enterprise value for the combination.

* Now LumiraDx is knocking 40% off that projected valuation while also saying that the market environment for publicly traded diagnostic companies has changed and is following feedback from the SPAC's advisors and shareholders.

* LumiraDx also reduced its revenue guidance for 2021, from the $600 million to $1 billion it had been forecasting in April, down to $300 million to $500 million by the end of this year.

* Related: LumiraDX COVID-19 Antibody Test Received FDA Emergency Use Nod.

* Price Action: CAHC shares are up 0.29% at $9.90 during the market session on the last check Friday.