NEW YORK, March 17 (Reuters) - Activist investor Altai Capital Management called on OraSure Technologies ( OSUR ) to explore a sale, saying the medical device maker could fetch double its current share price.

The hedge fund also said it would like board seats to supervise a strategic review process and that it plans to press on with its proxy fight if no settlement is reached, according to a statement that confirms an earlier story by Reuters.

"OraSure ( OSUR ) is worth significantly more in a sale than as a standalone company," Altai's President and Chief Investment Officer Rishi Bajaj wrote to OraSure's ( OSUR ) board on Tuesday.

"After deducting transaction costs, we estimate OraSure ( OSUR ) is worth $4.54 to $6.60 per share if sold - a 42% to 109% premium to today's price," Bajaj wrote.

OraSure ( OSUR ) has seen its stock price tumble 73% over the last five years as demand for COVID-19 rapid antigen tests has fallen.

Altai, which owns approximately 5% of OraSure ( OSUR ), is ratcheting up pressure after months of talks with management and the board fizzled, Bajaj wrote, asking again that the company invite him and one other executive to join the six-person board.

OraSure's ( OSUR ) fourth-quarter revenue fell 29% from the previous year, the company said in February, adding that it anticipates U.S. regulatory clearance for new diagnostic products in 2026.

Shareholders have sent OraSure's ( OSUR ) shares up some 18% since Altai officially nominated Bajaj and industry executive John Bertrand to the board in mid-January.

OraSure ( OSUR ) said in a statement on Tuesday that the company continues to "successfully execute a focused strategy designed to improve operating performance, strengthen margins, and position the business for revenue acceleration and long-term value." It added that its entire board has been refreshed over the last six years and has made "multiple settlement offers".

Earlier this year, prominent healthcare entrepreneur Ron Zwanziger reconfirmed to the company that he would like to buy OraSure ( OSUR ), according to sources familiar with the matter but not authorized to discuss it publicly. In June, Zwanziger proposed buying the Bethlehem, Pennsylvania-based company for $3.50 to $4 a share but was rebuffed, Reuters reported.

OraSure ( OSUR ) stock fell nearly 5% on Tuesday to close at $2.98.

Zwanziger and Altai are not working together, the two sides have said.

In the letter, Bajaj said new directors are needed because the company has "dramatically underperformed." He also criticized the board for failing to hold management to account for the share price drop, noting that the bulk of Chief Executive Carrie Eglinton Manner's compensation is not tied to the company's share price performance.

He also criticized the company's acquisition of Sherlock Biosciences in 2024 to expand its molecular diagnostics innovation pipeline and its investment in Sapphiros for exclusive distribution rights to the company's next-generation products.

OraSure ( OSUR ) said in 2024 that Sherlock would help expand its portfolio of rapid diagnostics for sexually transmitted infections and that testing for Chlamydia trachomatis and Neisseria gonorrhea represented a market of more than $1.5 billion. It said at the time the tests still needed regulatory approval.

Considering OraSure ( OSUR ) is operating at approximately 30% manufacturing capacity, according to statements from OraSure ( OSUR ) Chief Financial Officer Kenneth McGrath on a recent earnings call, Bajaj said it would have made more sense to buy an established business that can absorb the capacity instead of "early-stage ventures with no near-term production volumes," like Sherlock.

"It is imperative for the Company to reduce its cash burn and safeguard itself against further misuses of cash, including additional value-destructive investments and acquisitions," the letter said.

Point-of-care diagnostic companies offer accurate results in real time to measure cholesterol, and detect flu and pregnancy, for example. But the industry remains highly fragmented with companies such as Abbott Laboratories ( ABT ), Danaher ( DHR ), Siemens, Roche and Thermo Fisher Scientific ( TMO ) capturing the biggest market share.