Replication not able to initialize from backup file

I try to add subscription at the Publisher with initialize from backup file, but keep getting the error below.  I can clearly do RESTORE HEADERONLY from the backup file

EXEC sp_addsubscription
       @publication ='Pub_TestDB',              
       @subscriber = 'MSQLSQLINSTANCE\INSTANCE01,1419',      
       @destination_db ='TestDB',          
       @sync_type = 'initialize with backup',      
       @backupdevicetype = 'disk',               
       @backupdevicename =    'e:\mssql\testDB.bak'

Msg 18782, Level 16, State 1, Procedure sys.sp_MSextractlastlsnfrombackup, Line 207 [Batch Start Line 40]
Could not locate backup header information for database '[MSQLSQLINSTANCE\INSTANCE01,1419].[TestDB]' in the specified backup device. Specify a backup device that contains a backup of the Publisher database.

Thank you in advance for any advise and help.

Kevin