OraSure Technologies Inc. (OSUR:US) soared the most in three years after U.S. regulatory advisers backed its bid to bring to market the first at-home HIV test that lets people get results without using a doctor or laboratory.
OraSure rose 20 percent to $10.95 at 4 p.m. New York time, the biggest gain since February 2009, following a unanimous advisory panel vote yesterday that the benefits of the saliva test outweigh the risks. The Food and Drug Administration should make a decision on approval within months, said Stephen Lee, OraSure’s chief science officer.
The OraQuick In-Home HIV Test offers results within 20 minutes and would be sold without a prescription. FDA staff had raised concern in a report May 11 that a high number of people with HIV would test negative using the Bethlehem, Pennsylvania- based company’s kit. Approval would make it more likely the company may be bought, said Caroline Corner, a senior analyst with McNicoll, Lewis & Vlak in New York.
“OraSure would make an interesting acquisition for a major diagnostics company, such as Roche, Abbott or J&J, interested in the ongoing trend toward rapid and/or oral fluid testing as standard-of care diagnostic modalities for certain diagnostic tests,” Corner said in a note to clients today.
If approved, sales of the test may be $20 million next year assuming a $40 price tag, Corner estimated in a telephone interview. Today’s share gain pushed the market value of OraSure to $581.4 million, according to data compiled by Bloomberg.
Spokesmen at New Brunswick, New Jersey-based Johnson & Johnson (JNJ:US), Abbott Park, Illinois-based Abbott Laboratories (ABT:US) and Basel, Switzerland-based Roche Holding AG (ROG) didn’t respond to telephone calls for comment on the analyst’s speculation.
The FDA doesn’t have to follow the panel’s recommendation.
FDA panel members said the benefit of testing people who otherwise wouldn’t know their status outweighed the potential some users with HIV may test negative.
“We’re putting a statement forward as a committee that we support this as a new platform, a new strategy to combat this disease,” Steven Pipe, a panel member and associate professor of pediatrics and pathology at the University of Michigan, said at the meeting of advisers in Gaithersburg, Maryland.
Pipe said he is surprised that 250,000 people at risk of HIV still aren’t tested. The OraSure device may help put a dent in that number, making the benefit of the test outweigh the risk of an inaccurate result, he said.
About 1.2 million people in the U.S. have HIV, the virus that causes AIDS, and 20 percent of those people are unaware they are infected, according to the Centers for Disease Control and Prevention.
OraSure markets the only FDA-approved rapid HIV test that detects HIV antibodies in oral fluid and provides results in a clinic or doctor’s office. The over-the-counter version under FDA review is the same as the one on the market. Other at-home kits, such as Home Access Health Corp.’s Express HIV Test System, require users to send blood samples to a laboratory.
Final-phase trials of the OraQuick home test confirmed 5,384 of 5,385 negative users resulting in one false positive, according to the FDA staff report. It also detected 106 of 114 confirmed positive users resulting in eight false negatives.
The one used by professionals that is on the market is 99 percent accurate at detecting those with HIV compared with a 93 percent accuracy rate for those with HIV who would test at home.
“We shouldn’t let the perfect be the enemy of the good and this is an additional option,” Francisco Rentas, a panel member and director of the Armed Services Blood Program in Falls Church, Virginia, said during the meeting.
OraQuick would produce one false negative result for every 13 true positive tests, FDA staff said. That would total an estimated 3,800 people annually with HIV who believe they don’t have the virus, according to the report. The test would produce one false positive result for every 3,750 true negative tests resulting in 1,100 people a year who aren’t infected believing they are, according to the report.
The false negatives reported were higher than what the FDA considers a “minimum acceptable performance” while the false positives were lower than the agency’s acceptable threshold.
Almost 30 people who spoke during the meeting in favor of the product said expanding testing to people who might not otherwise know their status is worth the risk of the false negatives.
“It is essential that we bring more tests to market,” said Frank Oldham, president and chief executive officer of the National Association of People with AIDS, based in Silver Spring, Maryland. “We need more weapons to reduce HIV infections. We need tests that can be easily taken and are easily available.”
Panel members suggest OraSure update the test’s labeling to ensure people understand the risk of false negatives.
“We will work with the FDA to incorporate the suggestions,” Douglas Michels, OraSure president and chief executive officer, said in an interview after the meeting.
More than 16,000 people with AIDS were estimated to have died in 2008, the CDC said. About 50,000 new U.S. cases are reported annually, according to the CDC.
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