Was COVID start-up a false positive?
Curative made a splash with its oral test. But the FDA was not impressed.
It was a one-two punch that could damage an established company, much less a year-old start-up.
In January, the Food and Drug Administration cautioned that COVID-19 tests made by Curative might inform patients they were free of the virus, even when they weren’t — a so-called false negative that would allow infected people to unwittingly spread the deadly illness.
Not long after, administrators at a Colorado health system grew skeptical over a string of positive results from Curative and decided to have employees retested by another lab, only to find that the original results were wrong — a so-called false positive in a healthcare setting where infected patients are kept together, which could expose those who don’t have the virus to those who do.
“It’s scary,” said Yvonne Myers, the system’s director. “You could give them COVID.”
At a time when the standard COVID-19 test relied on a cotton-swab probe deep inside the nostrils, Curative promised accurate results if people would just cough and swab their mouths — an approach that diverged from established science.
Led by Fred Turner — a 25-year-old who dropped out of the University of Oxford to pursue his entrepreneurial dreams — Curative had in a year gone from fewer than a dozen employees to servicing mass testing sites such as Dodger Stadium, conducting more than 17 million COVID-19 tests. It may have grossed $1 billion
or more in taxpayer money and insurance premiums.
The privately held Los Angeles-area start-up had become California’s latest venture-capital-backed success story, a victor of the coronavirus economy that at one point said it was performing about 10% of all tests administered each week in the United States. But questions have mounted about its test’s accuracy.
Turner stands by his company’s test and attributes Curative’s rapid growth to its ability to develop a simple diagnostic, build a robust supply chain and process millions of tests as other labs were overwhelmed.
“We came in and filled this void where others couldn’t scale up,” said Turner, the company’s cofounder and chief executive.
In a bid to improve his company’s reputation, Turner has submitted to the FDA results of two clinical studies designed and carried out on his own employees in a matter of weeks. He boasts that the studies show his test is better than the standard, uncomfortable nasopharynx test backed by the federal agency — though they have yet to be peer-reviewed or published independently.
One year into the pandemic, much of the world has moved on from testing and turned its focus to vaccine supply, including Curative, which is distributing vaccines as it looks to reinvent itself.
But the story of how a tiny start-up with an unconventional diagnostic mushroomed into a billion-dollar testing juggernaut illuminates just how unprepared L.A. County, California and the nation were for what was coming. It’s a story rooted in a debilitated public sector that, in response to an overwhelming catastrophe, opted to relax regulations and place its faith in companies large and small that were ready and able to profit from a once-in-a-century pandemic.
“We didn’t have the public health facilities set up to really take part in helping keep the populations in this country safe,” said Michael Mina, an epidemiologist at the Harvard T.H. Chan School of Public Health. “And so this led to a huge decision to lean heavily on private industry.”
Unexpected opportunity
When the coronavirus arrived in California, decades of underinvestment had prompted the closure of 1 in 4 public health labs, leaving the state with fewer than one lab per million residents, and many with annual equipment budgets of zero dollars. Other states found themselves similarly unable to scale up the massive testing needed to keep the pandemic in check.
Commercial and other labs sprung into action, and the FDA cleared the way for more than 200 COVID-19 tests under its “emergencyuse authorization” process. That expedited review allows developers to begin selling their tests as long as they register with the FDA and follow up with limited research showing the tests “may be effective.”
Many labs began making tests to collect samples from the upper throat, where the pathogens are known to colonize: nasopharyngeal tests, the longtime standard for diagnosing influenza and other respiratory viruses. Reaching the area with a long swab is not only highly unpleasant for the patient but needs to be done by trained medical personnel in protective gear.
Turner thought he had a better idea.
He had been in the San Francisco Bay Area for several years trying to get a start-up off the ground. As a teenager, he had assembled a polymerase chain reaction machine to figure out why he didn’t have red hair like his mother and brother. That same technology is used to detect COVID-19 cases.
The achievement garnered him awards, leading to an unsolicited offer from a farmer to buy the device to genetically test his cows. Turner figured the farmer was onto something and created a company aimed at offering $15 genetic tests to improve herds.
That company, TL Biolabs, earned him a slot in the famed Mountain View, Calif., accelerator Y Combinator and a Thiel Fellowship, which awarded him $100,000 for dropping out of Oxford to pursue the start-up full time.
The idea didn’t pan out. “You have to basically capture every single cow in the entire U.S. for it to be a billion-dollar business,” Turner came to realize, he said.
TL Biolabs decided to apply its technology to human infections, and Turner continued fundraising, amassing more than $10 million before the company failed. He had started Curative to continue that work — just as COVID-19 emerged.
Based on data from the 2003 SARS outbreak, Turner concluded that there would probably be a sufficient viral load in oral fluids to detect the coronavirus. By adapting the coronavirus test developed by the Centers for Disease Control and Prevention, Curative in February 2020 created its own prototype.
Because Curative’s test is self-administered — users are told to cough three times and then swab their gums, tongue and other areas inside their mouths for at least 20 seconds — there is no need for medical observers to constantly change out of personal protective equipment, which was in short supply.
And although the FDA required trained observers to monitor patients as they performed the test, the agency did not specify that the observers needed medical certification. So Curative was able to tap cheaper temporary workers, including some with just a high school education, or rely on partners, such as Sean Penn’s nonprofit CORE at Dodger Stadium.
Anticipating huge demand for high-speed testing, the company built up database software, developed a field operation and ensured that its lab could handle the volume.
Investors were excited by the test’s potential. Curative raised an additional $1 million from angel investors and Palo Alto venture capital firm DCVC. A few months later, DCVC, Burlingame venture capital firm Refactor Capital and Chris Anderson, the curator of the TED speaker series, led an $8.8million funding round to scale up the testing, a company spokesperson said.
Anderson said Turner, with his easy-to-administer test and other innovations, had hit upon the same formula for success that he wrote about in a 2013 Fortune cover story on Steve Jobs and Elon Musk: “system-level design thinking” as much as great products. “That’s what the testing regime needed back in February. It wasn’t great science — the science of what a PCR test looks like was actually known,” Anderson said. “The problem was a matter of logistics. How do you scale up something like that? It’s about figuring out how you manage complex bar-code systems on a spreadsheet. And doing that really fast.”
Though its Bay Area location put Curative at the heart of the world’s venture capital ecosystem, the company was having trouble finding a local lab that met FDA standards to handle human tests, in high demand amid the pandemic.
Turner found one in San Dimas through MarsBio, an L.A. biotech venture capital firm where one of his Y Combinator classmates had landed. Turner and his small team relocated to Los Angeles County in March, working from hotels and Airbnbs as they got the test off the ground.
The move put Curative in proximity to the city government of Los Angeles, which had suspended the normal bidding process in hopes of quickly finding a company that could ramp up mass testing.
The city chose Curative, a spokesperson said, because it showed an ability to scale up rapidly, offered a self-administered test and used a local lab that could get results back faster.
By May, cars were lined up hundreds deep in the streets of Elysian Heights, filled with people waiting to get a Curative test at Dodger Stadium.
“At the beginning, we thought we were just [going to be] doing a couple of thousand a day, but you know, Fred is very ambitious and said, ‘You know, we need to be building toward a million a week,’ ” said Isaac Turner (no relation), a company cofounder and chief information officer.
The company used its deal with Los Angeles to open doors across the country. In an online sales brochure, it included a link to a video tweeted by Mayor Eric Garcetti showing scores of cars lining up for Curative tests at Dodger Stadium.
Turner also benefited from his venture capital network. Curative joined up with Gothams, a consulting firm founded by a DCVC partner that includes former special operations military officers and aerospace executives. The company soon inked deals to test members of Congress, employees of the Department of Defense and residents of Texas, Alaska, Florida and Delaware.
‘We don’t do anything magical. Really, there’s no new scientific advances that we’ve come up with. We took the CDC test and got really good running it at scale.’ — FRED TURNER, co-founder and chief executive of Curative
Subsidized test
Turner had failed to break into the diagnostics industry with TL Biolabs after discovering that the market wasn’t suitable for mass cheap testing.
But this time, the circumstances were different: The “cheap” part wasn’t a necessity.
The federal government early in the pandemic poured billions into testing. In March 2020, Congress passed the federal CARES Act, requiring health insurers to cover the cost of tests, with no out-of-pocket cost to patients, allowing companies such as Curative to offer their services to customers for free.
“You will never receive a bill from Curative for a covid-19 test,” Turner tweeted Jan. 11.
In Los Angeles, the city paid Curative $115 to $150 upfront for each test kit, which were delivered by the thousands every day to Dodger Stadium and other sites, according to invoices reviewed by The Times.
By late June, Los Angeles had paid $62 million to Curative when the city asked the company to begin billing health insurers, a city spokeswoman said. The company billed the city an additional $19.8 million through the end of last year, which included testing for the uninsured. The city is seeking federal reimbursement for all those testing costs, the spokeswoman said.
Currently, Curative bills health insurers $325: $250 for the test and $75 to collect the