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Investors bail on the company behind TestIowa’s COVID-19 tests
Last week, Gov. Kim Reynolds proudly announced that after more than three weeks, TestIowa's COVID-19 tests had been validated through Iowa's State Hygienic Lab.
In a news conference on May 14, she said, 'I'm pleased to announce that the State Hygienic Lab completed the Test Iowa validation process yesterday, achieving high ratings of 95 percent accuracy for determining positives and 99.7 percent accuracy for determining negatives.”
The tests are provided by a company called Co-Diagnostics. Co-Diagnostics is contracting with Nomi Health, the tech start up with no health care experience, that Reynold's is trusting with Iowa's lives.Co-Diagnostics, is a Utah-based medical testing company that received emergency authorization from the FDA on April 6, for the sale of its Logix Smart Coronavirus test, which had previously only been sold in a handful of countries, including India and South Africa.
In late April, Reynolds signed a $26 million no-bid contract with Nomi to launch TestIowa sold to her by Ashton Kutcher. Nomi also had a contract with Utah. Not long after Iowa made it's deal, Governor Pete Ricketts signed a deal with Nomi for Nebraska.
Reynolds TestIowa data announcement was intended to silence concern about the initiative, which had promised to allow Iowa to test 3,000 people per day. Nearly a month into the experiment, TestIowa had fallen significantly short of it's goal. People who had been tested weren't receiving their results. Additionally, anonymous reports out of the State Hygienic Lab revealed that there were problems with the TestIowa equipment, which the governor's office later confirmed.
But Iowa's data only raises new questions. The numbers contradict reports coming out of Utah and Nebraska. Nebraska's Journal Star reported on May 14, that the TestNebraska initiative is showing a 3 percent positive rate, which is 'well below the 18% average positive rate for all other tests conducted in Nebraska since testing began in early March.”
In Utah, growing concerns about the quality of the TestsUtah initiative led to lawmakers to ask Co-Diagnostics to check the accuracy of their tests with other labs around the state. TestUtah denied that request. Instead they are opting do an accuracy check with the state lab, the results of that check could be kept private.
BioCentury, a biotechnology and pharmaceutical data analysis company, looked at the limits of detection for COVID-19 tests that received emergency use authorization, in order to, in their words 'offer a window into their sensitivity and potential to produce false negative results.” BioCentury's data rates the Logix Smart tests as third tier.. And FIND, a nonprofit based out of Switzerland found that the Logix Smart tests only had a 67 percent accuracy, although the sample size was small.
All of this data, throws into question Co-Diagnostics own claims of 100 percent accuracy.
On May 19, , Rep. Dave Loebsack, Rep. Cindy Axne and Rep. Abby Finkenauer sent a letter to Reynold's asking for more transparency on the TestIowa data. In their letter they stated, 'We are concerned that Test Iowa still has not yielded 3,000 tests per day several weeks after its launch nor are there Test Iowa locations in ‘hotspot' areas. As our economy has begun to reopen, we know that Iowans will feel safer if they can access a test quickly and within in their communities. We need to ensure that essential workers, nursing homes, and those who believe they have been exposed can get tests right away.”
Beyond the data and slow implementation, investors are worried. Co-Diagnostics stock began to decline last week after an earnings call that sounded more like Thanksgiving with drunk uncles - dogs were barking, people were swearing, and someone was moaning.
The call wasn't all that worried investors. Co-Diagnostics had a distribution relationship with a company called PreCheck Health to distribute the COVID tests in Ecuador. SEC recently halted trading in PreCheck Health due to fraud concerns. And the Co-Diagnostics CFO was director of a firm fined $360,000 by Spanish authorities for alleged illegal securities sales.
None of Co-Diagnostics or Nomi Health's news releases about the Logix Smart tests have revealed how many tests have been sold, for how much, and so far all three testing initiatives in Iowa, Nebraska and Utah have been secretive about the tests and the results.Financial advisors are recommending investors dump Co-Diagnostics stock before it's too late. Since Reynolds isn't listening to epidemiologists, maybe she should listen to the market - dump it, before more Iowans die.
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NOTE: This article has been updated to clarify that the BioCentury data analyzes limits of detection.
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