Ottawa-based biotech company Spartan Bioscience Inc is temporarily laying off three quarters of its staff one day after filing for creditor protection.

Spartan told its staff Tuesday morning that about 60 employees and an additional group of students and interns would be temporarily laid off as the company deals with inconsistencies in the rapid COVID-19 tests it produces. According to a court filing, Spartan owes nearly $73 million to creditors including $16.4 million to Health Canada and $8.8 million to Business Development Canada. 

“It was varying from one day to another in terms of the number of inconclusive (tests),” said Spartan interim Chief Executive Officer Jennifer Ross-Carriere in an interview with CTV News.

“[Customers] are looking for a product that they can rely on that consistently and rapidly provides the results they need, and we just weren't pleased with the user performance. So, we took the step of pausing shipping and production, so that we can improve that and meet our quality standards.”

This is not the first roadblock for Spartan’s tests. Health Canada first approved the company’s rapid test in April 2020 only to be shelved three weeks later due to concerns over the efficacy of its swab. The company resubmitted the test to Health Canada in December, and once again received approval in mid-January.

Ross-Carriere said the company is working with the agency on a fix.

“It's a bump that happens when you get out in the field,” said Ross-Carriere. “We're working closely with the regulators on the fix to the test, but the test is there, the technology is good and we know it's a great test. We just need to do some more work.”

Ross-Carriere said that having fewer resources than larger biotech companies forced its hand into what she called an “incredibly sad” round of layoffs.

“We don't have the unlimited resources that some of the big manufacturers have to be able to, to throw a lot of money and resources on it,” said Ross-Carriere. “We have to work within the constraints of what we have. And that's limited our ability to work really quickly, and it really underscores the need for investment in bio science in Canada.”