HIV Testing. We believe that a test will determine our fate. But maybe its time to look at the history of one hiv testing company that's fate is tied to the test of the NASDAQ. Their health and wealth is determined by the fickle fate of the state of their stock. Good news: a contract with the US Government and their stock goes up 4 points. Bad news: a Health Department questions their test kits reliability and down goes their stock. It's a roller coaster ride partly dependent on reality but mostly dependent on the minds of the buyers. OraSure Technologies (NASDAQ: OSUR)maker of a rapid saliva-based test kit for hiv was the creation of a merger between two companies (Epitope-based in Oregon, and STC). Epitope (public company in 1986) developed an oral fluid collection kit called "OraSure." They received approval from the FDA to test this kit on humans. In 1998 the FDA accused Epitope of paperwork and quality control violations. After inspection of their facility in Beaverton, Oregon they were cited for not ensuring that their collection devices were not contaminated. According to the OraSure's Company profile, history: "Although the actual product lacked full FDA approval and the company had yet to make a penny, its stock was valued at $160 million on the American Stock Exchange."
STC did substance abuse testing. Epitope and STC collaborated and created a kit called "Intercept." In 2000, STC and Epitope merger and became OraSure Technologies. The FDA in 2002 gave approval for the OraQuick Rapid HIV-1 test. Abbott Laboratories and OraSure agreed to "co-exclusively" distribute the test. In 2003 the CDC announced that it would use their test kit in their new national HIV testing initiative. That announcement created a rise in OraSure Stock. Writer Christian Berg in an article dated april 19, 2003 states, "OraQuick, the nation's only rapid, easy-to-use HIV test, is receiving phenomenal boosts from federal officials. Since it received federal approval five months ago, it's been touted by the Food and Drug Adminsitration, President Bush, Health and Human Services Secretary Tommy Thompson and now the CDC."
At the end of the article we learn that OraSure stock is $6.30 a share on the Nasdaq. Phenomenal boost...how does a company get recommendations from not only the FDA but the President of the US? One has to recognize that there are some dynamic individuals who created this testing kit and marketed it. Dr. Richard George is one such individual. Although he no longer works for OraSure, he worked for the CDC for 34 years and at the CDC served "as the Chief of Developmental Technology Section in the AIDS Program where he provided laboratory support and coordination for the CDC's international HIV/AIDS projects." (Business Wire Jan 10, 2003). He was a consultant to the World Health Organization. When he quit OraSure to join Calypte, he was hired as VP of Government Affairs--working with governement agencies. Thus the experience at the CDC would seem to be a helpful skill to any company marketing a product to the government. Another dynamic individual who still works at OraSure is Ronnie B. Lancaster, senior VP of Federal Government relations. He previously had worked at the US Department of Health & Human Services as an Executive Assistant for planning and evaluation of programs. He also worked for Assurant and the Morehouse School of Medicine. Employment in the US Government is a valuable asset to industry. Doors that are normally closed, open. The Presidential Advisory Council on HIV/AIDS 29th meeting (2006) had Douglas Michaels, President and CEO of OraSure as a speaker on "Prevention." All the other speakers were either from the CDC or US Health Department, Florida Health Department, NY Health Department or hiv/aids organizations. But this is not unusal for OraSure. In May of 2003, an event at the headquarters of OraSure had such guests as the deputy secretary of the US Department of Health, an ambassdor (Jack Chow), US State Department director, White House Office of National Aids Policy director, CDC chief ooperating officer, a captain from the US Navy, a representative from the office of US Senator Arlen Specter . In observance of National HIV Test Day, OraSure Technologies (June 27, 2008) opened the NASDAQ stock market with the National Association of People with AIDS. They also opened the NASDAQ in December of 2005 for World AIDS Day. I suspect that they get to open the NASDAQ stock market alot. On the December 2005 they "had a special NASDAQ-sponsored panel discussion and press conference on global HIV/AIDS prevention and treatment, featuring US Surgeon General Vice Admiral Richard H. Carmona,MD." (Business Wire-December 1, 2005.
In a summary of federal contracts to OraSure Technologies 2000-2007, we find that approximately $9 million of the $13 million given to them by the government was not competed for. No competition. The CDC and the Substance Abuse and Mental Health Services Administration were the top agencies that had these contracts with OraSure (also does substance abuse test kits).
It is interesting that Florida State Health Department literature states the use of OraSure test kits. They never say they are offering a rapid hiv test but use the product name, OraSure/OraQuick Rapid Hiv test. Name recognition, great marketing. How many know the name brand of a pregnancy test kit? I use to help at a Birth Center, doing pregnancy testing. I never knew the company or name of the test kit back then. It wasn't important--maybe because there were many different test kits--so we always said free pregnancy tests. But the Health Departments specifies OraSure, regarding the hiv test kit.
Recently the midday trading of Orasure dipped--New York City health officials' are suspending the use of the oral testing with OraSure/OraQuick rapid HIV test. The health officials reported, "a somewhat elevated number of discordant test results from October 2007 through April 2008." I think that means they were getting alot of false positives. The company in this article maintained that there is always a small possibility of false positive results but maintains that the test is 99.8 percent accurate." AP June 17, 2008 "NYC suspends oral fluid sample use in HIV tests" And the stock of OraSure dips to the tune of the misfortunes of some people in NY testing hiv positive when they weren't.
Copyright 2008 Valerie W. McClain