SALT LAKE CITY — Utah companies that received no-bid contracts to perform COVID-19 tests faced scrutiny from the U.S. Securities and Exchange Commission (SEC) and federal lawsuits alleging "manipulative and deceptive practices"
are still ongoing, according to a report from the Salt Lake Tribune.
Among the claims the lawsuits focus on is that the tests are "100 percent" accurate, a finding that the FDA has said is impossible.
These actions stem from an initial $5 million in no-bid contracts for Nomi Health, which then subcontracted with Utah company Co-Diagnostics to perform the tests as part of TestUtah's initiative to combat the virus.
According to the Tribune, Nomi also sought political influence in gaining the contract from Senator Mitt Romney's office and then Lt. Governor Spencer Cox.
The Governor’s Office of Management and Budget (GOMB), the Utah of Department of Health (DOH), and Co-Diagnostics all received inquiries from the SEC about the coronavirus tests conducted in Utah.
Filings with the SEC show that Co-Diagnostics’ stock price soared to $30 within six months of the start of the pandemic, up from $.88 a share, with revenue increasing almost 35,000 percent to $74.5 million from $214,974.
Its CEO also earned $1.46 million in salary, bonuses and stock options in 2020, an increase of $1 million from 2019.
Co-Diagnostics was operating at a loss in 2019, but gained early approval for its COVID-19 test from the European Union.
But it needed a lab to validate its test, and when Utah's Public Health Laboratory offered its services, no one showed up, according to Robyn Atkinson-Dunn, who was its director at the time.
Instead, it went to Timpanogos Regional Hospital in Orem.
“That immediately raised eyebrows for us at the lab and the diagnostic community because Timpanogos is a small regional hospital,” she said.
But by the end of March, the FDA still hadn’t granted the emergency use authorization for Co-Diagnostics’ tests, Atkinson-Dunn said, and learned it was because the test was manufactured in China.
However, according to the Tribune's investigation, "Co-Diagnostics told Utah reporters that its Salt Lake City lab could produce 50,000 COVID-19 tests a day, and described additional manufacturing capacity at a plant in India. The Tribune could not independently verify that Co-Diagnostics tests were being manufactured in China, and Co-Diagnostics did not return calls or emails requesting clarification."
"FDA scientists had gone back and forth with the company since at least February, seeking more information, emails obtained in a records request show."
Atkinson-Dunn suggested that Timpanogos Regional Hospital be cautious about using Co-Diagnostics tests because the FDA had not authorized emergency use.
Emails obtained by the Tribune include one from Spencer Cox who wrote, “I understand that UDOH shut down the efforts of Timp Hospital to test because of concern over the FDA’s approval of the Co-Diagnostic test. I reached out to Senator Romney’s team and they went straight to the FDA and were told that the preliminary approval is sufficient and couldn’t understand why we shut them down.
"See the email below. Please give this information to whoever needs it at Health and let’s get them the green light to continue today. Please tell your teams that we need to move heaven and earth to get more testing.”
However, test results soon showed stark differences from other tests, said Atkinson-Dunn.
By late April 2020, the SEC was making inquities to the DOH and GOMB about TestUtah and the no-bid contracts as part of a larger effort to investigate possible fraud and misconduct that often occurs in a medical crisis.
“What alarms me the most is that they [TestUtah] are expanding collection and testing with these unknowns about how their test performs. If correct, I urge you to halt their testing until we understand why their results differ so much from what other labs are reporting,” wrote Bert Lopansri, a specialist in infectious diseases and microbiology at Intermountain Healthcare, which was reported by The Tribune on April 30.
Co-Diagnostics’ stock price is currently around $8 per share, a stark decrease from its peak, as investors continue to pursue claims that it knowingly made false statements about its COVID-19 diagnostic test.
It has sold more than 10 million COVID-19 tests worldwide.
As a preemptive measure, the 2021 Utah Legislature passed HB 43 mandating that no-bid emergency contracts last no longer than 30 days in most cases, or 60 days during natural disasters.