Key Takeaways

  • Danny Yeung scaled Prenetics from 200 PCR tests per day to 40,000 per day during COVID-19, generating over $700 million in total revenue across three years and listing the company on the NASDAQ.
  • In 2022, Prenetics booked $272 million in revenue before test demand vanished, triggering a 95% revenue collapse and a market cap plunge from over $1 billion down to $50 million.
  • Competitors like Lucira and Cue Health went bankrupt within 18 months because they poured capital into permanent manufacturing facilities and at-home testing hardware that lacked peacetime demand.
  • Yeung fired 2,000 employees immediately once the pandemic ended, stopping cash bleed and preserving the balance sheet to pivot into consumer longevity products.

The Trap of Mistaking a Spike for a Trend

Prenetics caught one of the largest demand surges in modern business history. The company started out processing 200 laboratory PCR tests a day. At its peak, that volume exploded to 40,000 tests daily. Over three years, Prenetics processed 28 million tests and generated more than $700 million in revenue. That run carried the business straight onto the NASDAQ at a valuation north of $1 billion in 2022.

Then the world reopened. The testing market evaporated in months.

“In 2022 yeah we did, you know, 272 million revenue, right? And basically 40 tests turned to nothing, right? So basically, you know, our revenue dropped by 95%,” Yeung explained. Within 18 months of listing, the company saw its market capitalization slide from over $1 billion to roughly $50 million.

Most founders treat temporary windfalls as permanent baseline growth. They forecast future years by drawing straight lines up and to the right. When the market corrected, the companies that believed their own hype got wiped out.

Why Speed Beats Optimism in a Downside Spiral

Surviving a sudden collapse comes down to how fast you accept reality. Many health tech companies refused to believe the testing boom was over. They doubled down on fixed overhead, built out custom factories, and bet their remaining cash on home diagnostic devices.

“They went bankrupt, you know, 18 months after COVID because they overbuilt,” Yeung said. “They built their own manufacturing places. They bought into the athome testing which never panned out postco. But I knew that for both sides, for a company to survive after this, we needed to make a drastic cut.”

Competitors like Lucira and Cue Health burned through their reserves maintaining operations designed for emergency conditions. When those conditions ended, their fixed costs crushed them into insolvency.

Yeung chose surgical speed over sentimentality: “Right when we knew CO was over I let go of 2,000 people very very fast and that turned out to be a really, you know, good decision.”

Cutting 2,000 people in a short window is excruciating for any leadership team. But delaying those cuts by six months would have killed the entire organization. By taking the hit instantly, Prenetics stopped its burn rate, protected its cash reserves, and bought the time required to pivot into consumer longevity.

What to Do With This

Audit your revenue streams this week and separate recurring demand from situational windfalls. If more than 30% of your current income comes from an event-driven surge, freeze all long-term capital expenditure and lease commitments tied to that volume. Keep that capacity variable through contractors and third-party vendors so you can cut costs to zero within 48 hours if demand disappears.