Elizabeth Holmes, the 31-year-old CEO of private lab testing firm Theranos, has been engaged in a PR battle with the Wall Street Journal. The WSJ published an expose on Theranos and Elizabeth Holmes in late October, alleging that the firm was not using it’s “revolutionary” new Edison technology to perform most of its lab tests and may even have been fudging its data to the FDA. There have been a couple of follow-up articles by the WSJ’s John Carreyrou, including a full-length overview piece titled At Theranos, Many Strategies and Snags, published last weekend.
Of note, Theranos’ Edison technology has been hailed as an important breakthrough in the lab testing industry as it only required a tiny pinprick of blood to run a wide variety of diagnostic lab screenings. However, based on the WSJ’s exhaustive investigation, Elizabeth Holmes; new single pinprick of blood testing technology appears to be seriously flawed, and perhaps only of limited utility. This of, course, raises some serious questions about the current sky-high valuation of Theranos.
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More on Elizabeth Holmes and Theranos
Elizabeth Holmes founded Theranos in 2003 when she was a 19 year old drop out of Stanford University. Holmes is clearly extremely ambitious in that she plans to revolutionize the lab testing sector with a system to perform diagnostic tests with only a few drops of finger-pricked blood.
Over the last couple of years, Holmes has tried a number of strategies (a hand-held device, tests for drugmakers, drugstore clinics) trying to commercialize her technology. However, she has run into a slew of problems, based interviews with close to two dozen ex-Theranos employees, company emails and regulatory documents.
In one anecdote related by a former employee, when Holmes was demo-ing the new technology to Novartis in Switzerland, she pricked her finger to produce a sample in front of a group of execs, then tried to run a test for a protein that serves as a marker for inflammation. However, all three of the Theranos devices produced error messages (as they often did in in-house tests). Holmes, however, just went ahead with the presentation, claiming it was just a technical glitch.
Apparently Holmes has always been pushing the boundaries. As a high-school junior at St. John’s School in Houston, she was quoted as saying: “I tend to be a perfectionist so sometimes I’m up really late working,” she was quoted as saying. “But usually I can stay on top of things and everything works out.”
A student survey in her senior year noted her theme song was “I’m in a Hurry” and she was “trying to save the world” in 20 years.
Holmes defends Theranos and Edison technology
As reported by ValueWalk, Elizabeth Holmes has been working hard at damage control following the WSJ expose, and has pointed out that Theranos already has one FDA-approved test using Edison technology, and is the process of moving several other tests forward toward approval.
She also claimed said earlier this month that customer testing volume for the firm was higher than ever. Holmes also argues that the company has performed millions of tests, most with highly positive feedback.
New technologies take time to develop, but Theranos uses older technology for large majority of its tests
Theranos no longer collects samples of blood from patients’ fingers except for one of its tests, while it waits for the FDA to review the company’s applications for more tests using the tiny vials called “nanotainers.” Theranos is using traditional lab machines for nearly all of its testing.
There is no question that many technology startups have major struggles to develop and commercialize their products. However, Theranos faces extra difficulties because of the regulatory burdens related to blood tests (which can provide patients with life-or-death results).
Of note, David Philippides, an engineer who worked on Theranos devices from January 2013 to November 2014, argues the company did bot show enough regard, based for the scientific rigor of medical research while he was employed there.
“The time was not taken to develop anything properly,” Philippides claimed. “This is science. You need time.” He was fired after refusing to go to Arizona to bring back a broken down machine.
A Theranos spokeswoman noted that Philippides held only a “junior role” in his job that gave him “no visibility into the extent of” ongoing research and development. She also pointed out the firm has over 80 PhD scientists on the payroll.