Wall Street Journal - December 13, 2005
Cynthia Koons, cynthia.koons@wsj.com

Shares of OraSure were down $1.03, or 8.4%, to $11.23 in afternoon trading on the Nasdaq Stock Market. The stock's low Tuesday was $11.05, down nearly 18% since its close Thursday.

Since the spring, public health clinics in San Francisco have found at least 49 false positive results in patients who used OraSure's oral HIV test, the San Francisco Chronicle reported, and in New York City, clinics also showed an increase in false positives, from 10 in October to 30 in November.

"We certainly have been working with our customers out in San Francisco to understand what has transpired with the very slight uptick in false positives that they have experienced. However, their data continues to be north of 99% accuracy on specificity," OraSure Chief Financial Officer Ron Spair said, adding that the company is also meeting with New York officials to deal with the uptick in false positives there, too.

The product, OraQuick, can be used as a rapid blood or saliva test, but the increase in false positives has all been traced back to the oral tests. OraQuick is currently being considered for approval as an at-home HIV-testing product.

Possibly adding to the decline Tuesday was CNBC "Mad Money" host Jim Cramer recommending that investors sell the stock. A couple weeks ago, Mr. Cramer spoke bullishly about the company, citing the potential for over-the-counter approval of the OraQuick product from the Food and Drug Administration. Following that show, the stock rose nearly 11%.

The stock drop Tuesday surprised RBC Capital analyst Bill Quirk. "This is something that's hampered the stock for a number of trading sessions," he said. RBC makes a market in OraSure's stock.

At an FDA meeting in November, Mr. Quirk said an attendee disclosed that there was a relatively low positive predictive value, or likelihood that a positive test is actually true, for the OraQuick test. "What we have to keep in mind is that this test is a screening test, screening tests are designed to maximize sensitivity, meaning you want to limit the amount of false negatives," Mr. Quirk said. OraQuick positive test results are meant to be followed up with further blood tests.

Wade King, the director of research at Montgomery & Co., who practiced medicine for 10 years, said the specificity for oral fluid rapid-HIV tests is 99.6%.

"The recent results, for example, 30 false positives out of a sampling in a given month of 3,500 tests, suggests a specificity close to 99.2%," he said. "The important thing to remember is that the FDA has indicated in the past that their specificity level for rapid-HIV test is 98%. We're obviously talking about something much higher than that, even with the increase in false positives we've seen recently." King had no conflicts of interest to report.

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