Business

The Wheels Fall Off For Elizabeth Holmes And Theranos

It was a feel good story about a young female entrepreneur, but the questions keep piling up and have many wondering….

Holmes founded blood-testing startup Theranos, which has been valued at $9 billion. Now it looks as though the dream might be about to fall apart.

At just 31 years old, Holmes has been named a United States ambassador for global entrepreneurship and is a member of the Board of Fellows of Harvard Medical School. She is on TIME’s list of the 100 Most Influential People in the World this year, and Forbes ranked her No. 121 on its list of the wealthiest Americans, writes James B. Stewart for The New York Times.

Elizabeth Holmes, Theranos

Story of Theranos unravels under scientific scrutiny

Holmes followed the current Silicon Valley playbook, coming up with revolutionary, disruptive technology that would allow Theranos to carry out a number of blood tests using just a prick of blood from a finger rather than a needle. However a story from John Carreyrou of The Wall Street Journal revealed that only a few tests were being made from the tiny sample that had excited doctors and investors so much.

Although Theranos has denied the claims, it has acknowledged that most of its tests are made using conventional equipment, just like its competitors Quest Diagnostics and Laboratory Corporation of America Holdings. The FDA has ruled that the company’s tiny blood containers were unapproved medical devices, forcing Theranos to use conventional blood draws.

Proposed blood testing centers in Walgreens stores have been put on hold pending a decision about the technology, which has not been peer reviewed. Despite widespread hype in media and technology circles, doctors are not even sure that the technology is fit for purpose.

Peer review essential for potential future success

Although the ideas could prove revolutionary after further testing, the fact that so many people were hooked by Theranos goes to show the lasting power of a great story. Holmes dropped out of Stanford and then used her entrepreneurial spirit to address her own fear of needles while revolutionizing medical testing, or so it seemed.

She profited from today’s need for a snappy message by selling Theranos and its technology without ever revealing much about the science behind its methods. Pressure to make snap decisions encourages people to believe in an idea that they know little about.

The problem for Holmes is that unlike other disruptive startups, medical technology companies must subject themselves to peer review if they are to be taken seriously by doctors and other scientists. Professor Yeo of the University Chicago claims that many people are willing to test Theranos’ products, if only the company would let them.

It seems unlikely that we have heard the last of Holmes and Theranos, but if the company is to prove its growing army of doubters wrong it needs to submit to peer review.

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  • Lu

    As a laboratory professional for 40 years, we have all been watching this company and wondering why the heck people are believing her and dumping money into her company…! Talk about pulling the wool over their eyes…….!!!! And P.S: about those big scary needles?? A venipuncture is FAR less painful than a fingerstick. I won’t let anybody do a fingerstick on me!

  • Bill Wesley

    It is actually very difficult to clear blood tests through the FDA. It can take over 8 months, with incredible amount of data and lots of back and forth with questions and answers, and requests for additional data and reanalysis. But you are right that the real proof in the pudding is peer reviewed articles, showing the test performance in the hands of lab end-users

  • Bill Wesley

    It’s finally all coming to a head, just like the diagnostic community predicted. Who did she think she was going to fool and for how long? Medical diagnostic experts, and the FDA have way too much more knowledge than Ms Holmes in lab diagnostics. No FDA clearedd products (sorry…1), no peer reviewed studies, no information on her technology and lying about what equipment she uses for patient testing, etc. And why does she have to be in every single photo related to Theranos? Who does that? She’s a sham and BS artist.

  • Eduardo Nascondo

    Theranos won’t let people test them , because they are invalid. They failed all their CMS CLIA proficiency testing. This will come out soon.

  • Chance Morgan

    her intention to use just ONE drop of blood to do a few test is a good/ideal thinking, and this kind of thought has been considered among clinical medical technologist long before. But the reality is that likely it is not going to happen in today.

  • Mike

    I couldn’t agree with you more!

  • Rick

    Theranos is more concerned about it’s image than it’s science. When you fill your Board with politicians (name dropping), have your CEO continually attempt to convince people she’s the next Steve Jobs (even down to the black turtleneck) and hide what is actually going on in your company, this has FRAUD written all over it. I don’t want to hear the lame excuse of “proprietary secrets” as the reason for not allowing peer-review of their technology. We’re dealing with people’s lives for crying out loud.

  • Glen

    I wish Theranos would stop insulting our intelligence by always claiming the FDA is the “gold standard” of validation. Anyone who has spent some time in the medical technology field knows that an FDA 510K clearance does not in any way assure that the technology actually does what it says it does. To get a 510K clearance you simply just need to show “substantial” equivalence to a previous (predicate) device which is very subjective. I would not trust my health to a blood test that only received a 510K without any peer-reviewed validation…period!

  • Glen

    I wish Theranos would stop insulting our intelligence by always claiming the FDA is the “gold standard” of validation. Anyone who has spent some time in the medical technology field knows that an FDA 510K clearance does not in any way assure that the technology

  • david letterman

    Right. The lawyers are clicking their heels over this and Valeant! But Holmes will never get jail time. The company will pay fines. With her connections, she is insulated. If she were to go down, then Kissinger would go down as would the others including the VCs. And they are all too well connected. No one can take down Kissinger, and he has been a serial killer for decades.
    Question – is 23andMe legit? Just curious. It sounds like an interesting concept. I haven’t used it and won’t as I don’t trust the confidentiality of the data. I am pretty sure it will find its way to the NSA.

  • Fly On The Wall

    Actually, there’s been a lot of press about potential lawsuits. While the private investors might have trouble going after her, incredibly many medical regimens have been implemented based on Theranos test results. As we know, with the exception of one test (herpes) none of the so-called proprietary tests have ever been validated (this REALLY can’t be happening in the U.S.A, can it?). And we already know from a small subset of anecdotal reports from reputable sources that the tests are unreliable. Many former employees seem willing to come forward with horror stories.
    If the data they claim they intend to release doesn’t measure up for any reason, they will certainly be shut down like 23andMe.
    There must be legions of ambitious lawyers out there conducting preliminary investigations into potential litigation.

  • BartMyArse

    There are people who lie for a living, and be darn good at it.

  • david letterman

    Right. You need a guy like Walter Isaacson or Roger Lowenstein who explained the fall of Long Term Capital for the layman or John Krakauer who spilled the beans on the Mormonism and the bogus Afghan charity. The unicorn phenomenon is exactly correct. And 12 years without a serious investigation is unbelievable. I will say this: she is lucky to be busted now and not after millions of people had used her tests and gotten bad results. She could have been charged with murder/manslaughter for any decisions that resulted in death. This whole thing is the definition of cult of personality. And her penchant for the black turtleneck is ridiculous. I don’t mind people who develop their own style/look, but she is trying to associate herself with Steve Jobs, and she comes off as a me too clown. She is also lucky to have been busted now and not when after the company went public. I don’t think she will serve any jail time. But had an IPO taken place, she would have seen the slammer for sure.

  • Fly On The Wall

    I do not work at Theranos, but have been on its campus many times. Additionally, I spend a lot of time at Stanford, and have seen Holmes in person. I’m also very acquainted with the Valley and its many idiosyncrasies. No doubt she is an intensively secretive person who is hard to understand: the hype surrounding her has been so extreme she may have become brainwashed into believing her own legend. This may be one of those rare cases where a complete break from reality has occurred and a pathology has emerged.
    .Those dark intimations aside, it’s clear she and her company have escaped scrutiny due to the oft-cited ‘unicorn’ phenomenon, which is widely acknowledged as toxic but which no one seems to be able to fix.
    For 12 years to elapse with no oversight is extraordinary and this will certainly go down as a major cautionary tale as to how not to run a startup.
    It does seem certain, however, that the technology failed to developed as they had hoped, and at least an unconscious, if not downright deliberate, attempt to conceal the lack of progress took place. Now, they appear to be in very serious trouble. Their chief counsel may actually be the architect of their misfortunes, given his past history and the very peculiar selections for their board of directors.
    It’ll take a better business analyst than me to figure this all out. It’s certainly going to grow ever more flamboyant as the weeks progress.
    This will make a wonderful book for Walter Isaacson to write once the dust settles.

  • david letterman

    Here is what I don’t understand. How can she lie repeatedly and so successfully in public? That is not easy to do. That requires one to be pathological. And yet it doesn’t seem to fit her personality. I obviously don’t know her, but I have gone back since the WSJ article and watched every interview available. I can’t circle the lies with her personality. She is either extremely demented with a massive God complex, or she honestly believes that she/her company will one day get the technology to work as stated. I think a major tell was having Kissinger on the Board of Directors. Yo put a guy like that on your Board when you are hoping to avoid questions. But in reality, he is an awful choice. No medical background, no ability to vet the products, and a history of lying and skulduggery. He is all show, no horse.

  • Fly On The Wall

    Yeah, and maybe I’m reading too much into it, but the number of people who were concealing their faces was way high even by Halloween costume attire standards. Like they were expecting a government raid or something!

  • Herrmaniac

    No worries…she’ll be in porn soon….yeeehaw!

  • david letterman

    someone should have dressed as a peer, and someone else should have addressed as a review.

  • Fly On The Wall

    Bizarre little Halloween party at Theranos HQ last night. Very subdued, not many people. No-one dressed as the WSJ, FDA, or a nanocontainer either……………
    It’s an interesting story. I think the whole company will gradually just bleed out (excuse the pun), and the gear, buildings and some of the staff eventually bought for a song by someone else………………