The billion dollar baby has now, officially, gone bye bye.
Just when you thought that the biggest ever “multi-billion” private company that also happens to be an utter fraud, would quietly disappear before it risked attracting even more unwarranted attention from regulators, enforcers, and criminal investigators which could potentially lead to prison time for “billionaire” Elizabeth Holmes, here she comes again reminding everyone of her fallen from grace presence, in this case with what should be the terminal news for this company, namely that as the WSJ reports (and as the company confirms) Theranos has told federal health regulators that the company voided and revised two years of results from its Edison blood-testing devices and has issued tens of thousands of corrected reports to doctors and patients.
As a reminder, the basis for Theranos ludicrous $9 billion valuation which it appears was achieved without anyone doing any actual due diligence, were the “Edison” machines which were touted as revolutionary – not just by Holmes but by the fawning media and even the Clintons. Theranos has now told regulators that it threw out all Edison test results from 2014 and 2015, effectively confirming it has no proprietary technology, and also validating that its valuation should be zero.
Worse, Theranos has told regulators that it used the Edison for 12 types of tests out of more than 200 offered to consumers and stopped using the devices altogether in late June 2015. In other words, Theranos’ insane “valuation” was achieved on the basis of doing only 6% of blood tests in house (all of them erroneously we now learn), and outsourcing 94% to companies whose products actually worked and many of whom likely had a far lower valuation than the one at which a bunch of idiot billionaires “valued” Holmes’ worthless company.
In the process of commiting fraud and building up her valuation, Holmes repeatedly gambled with people’s lives, sending them clearly wrong results. As a result some patients have received erroneous results that might have thrown off health decisions made with their doctors, the WSJ reports. All this is needed is one death and there is a criminal case.
So why come clean now?
The move is part of Theranos’s attempt to persuade the agency not to impose stiff sanctions it threatened in the aftermath of its inspection of the company’s Newark, Calif., laboratory. The voided and revised test results are one of the most dramatic steps yet taken by Theranos.
Company records reviewed during the inspection showed that the California lab ran about 890,000 tests a year. The inspection found that Edison machines in the lab often failed to meet the company’s own accuracy requirements.
In other words, Theranos may have put as many as 890,000 lives per year in jeopardy with its fake technology.
The good news, this is now officially game over for if not Elizabeth Holmes, then certainly her company:
“There have been massive recalls of single tests in the past, but I’m not aware of one where a company recalled the entirety of the results from its testing platform,” said Geoffrey Baird, associate professor in the department of laboratory medicine at the University of Washington in Seattle. “I believe that’s unprecedented.”
The company also commented:
In response to questions from The Wall Street Journal about the blood-test corrections, Theranos spokeswoman Brooke Buchanan said: “Excellence in quality and patient safety is our top priority and we’ve taken comprehensive corrective measures to address the issues CMS raised in their observations. As these matters are currently under review, we have no further comment at this time.”
That’s rich, pardon the pun. Less rich, if only on paper, will be Holmes who will have ample opportunity to make numerous comments during trial.
* * *
Finally, the question everyone should be asking is who enabled this fraud for so many years? The simple answer: everyone, and especially those who have an agenda to conduct one endless infomercial for a product that ended up being an epic fraud. Here is a sample (courtesy of Bruce Quinn).
August 30, 2013 “Theranos: The Biggest Biotech You’ve Never Heard of.” San Francisco Business Times. By Ron Leuty. Here.
September 8, 2013 “Elizabeth Holmes: The Breakthrough of Instant Diagnosis.”
The pivotal Wall Street Journal article, by Joseph Rago. Here
A Stanford dropout is bidding to make tests more accurate, less painful – and at a fraction of the current price.
September 9, 2013
“Secretive Theranos emerging partly from shadows.”
SF BizJournal, SF/Biotech, by Ron Leuty, subtitled, “The biggest biotech you’ve never heard of.” Here.
October 9, 2013 “Just a Drop Will Do.” Pediatric News. By William Wilkoff. Here.
November 6, 2013
“What Heath Care Needs is a Real Time Snapshot of You.”
Hematology Reports (Open Access Journal). Full article PDF: Here.
Chan SM, Chadwick J, Young DL, Holmes E, & Gotlib J (2014). Intensive serial biomarker profiling for the prediction of neutropenic fever with hematologic malignancies undergoing therapy: a pilot study. Hematology Reports 6(2).
Forbes [blog 7/2, and Issue, 7/21], by Mathew Herper. Here.
June 3, 2014 US Patent: “Systems and Methods of Sample Processing and Fluid Control in a Fluidic System.” PDF, Patent 8,742,230 B2, 80 pp.. Here. “This invention is in the field of medical devices…portable medical devices that allow real-tie detection of analytes from a biological fluid…for providing point-of-care testing for a variety of medical applications.”
June 20, 2014 “Theranos: Small Sample, Big Opportunity.” Decibio [Consultancy blog]. By Eric Lakin. Here.
July 15, 2014 “Meet Elizabeth Holmes, Silicon Valley’s Latest Phenomenon” San Jose Mercury News, by Michelle Quinn. Here.
July 15, 2014 “Theranos bringing 500 new jobs to Scottsdale’s SkySong.” Phoenix Business Journal. By Angela Gonzales. Here. [SkySong is an ASU-affiliated tech park].
July 21, 2014 “Meet Elizabeth Holmes, the Youngest Female Self-made Billionaire Changing the World with Medical Technology.” Women’s ILAB, by Katherine Melescuic. Here.
August 11, 2014
“Ignoring Lab Industry, Theranos Goes Its Way.”
“My Visit to Walgreens for Theranos Lab Tests.” DARK REPORT (Paper by subscription only). Table of contents here.
September 8, 2014
TechCrunch / Youtube Interview with John Sheiber. VIDEO. Here.,For further details, see here.
September 8, 2014
“Elizabeth Holmes takes Theranos’ blood test to tech movers, shakers.”
Biotech SF / Bizjournals – by Ron Leuty. Discussion of TechCrunch presentation. Here.
September 29, 2014 “This Woman’s Revolutionary Idea Made Her A Billionaire — And Could Change Medicine.” Business Insider. By Kevin Loria. Here. See also June 4, 2015.
September 30, 2014
“Queen Elizabeth: Mystique of Theranos founder grows with Forbes’ richest ranking.”
October, 2014 “Health Plans Deploy New Systems to Control Use of Lab Tests.” Managed Care. By Joseph Burns. Here. Does not directly cite Theranos. Cites contrasting viewpoints on the value of direct easy inexpensive test access:
October 1, 2014
“How One Entrepreneur is Transforming Blood Testing.”
Slate – by Kevin Loria. Here. [Reprint from Business Insider, 9/29, above.]
October 16, 2014 “She’s America’s Youngest Female Billionaire – And a Dropout.” by Rachel Crane. CNN/Money. Here. [Text & Video.]
October 27, 2014 “Theranos Due Diligence: Company Profile, SWOT Analysis, Market Opportunity.” Decibio. Consulting group profile of Theranos and its valuation and market position (73 pages; $850). Here. Table of Contents, here. Additional description here.
November 7, 2014
TEDMED – Youtube – Elizabeth Holmes at TEDMED. VIDEO. Here.,For further details, see here.
November 7, 2014 “Major Upside for Walgreens Stock” InvestorPlace. By John Divine. Here. “The single biggest catalyst for WAG stock in the future may be the company’s decision to partner with the privately held health-tech firm Theranos.”
Video interview with Pattie Sellers. Here. For further details, see here.
December 8, 2014 “Here’s How the World’s Youngest Self-Made Female Billionaire Shows People She’s In Charge.” Business Insider. By Richard Feloni. Here.
December 8, 2014 “The New Yorker on the Promise, the Secrecy, and the Challenges of Super-Startup Theranos.” MedCityNews. by Meghana Keshavan. Here.
December 12, 2014 “Behind the Curtain at Theranos.” NBC News. (Video). Interview with Ken Auletta. Here. For more detail, see here.
December 14, 2014 “Blood Test Innovation: Less Cost, No Big Needle” Information Week/Healthcare. By Larry Stofko. Here.
January 28, 2015
“Elizabeth Holmes, Theranos: Transforming Healthcare by Embracing Failure.”
Youtube. Stanford Graduate School of Business. Here.
February, 2015
“Top 10 Most Innovative Companies in Health Care, 2015: #7, Theranos”
President Clinton, Fourth Annual Health Matters Activation Summit. “Access to health information is a basic human right,” said Elizabeth Holmes, a young Silicon Valley entrepreneur who founded Theranos, a blood analytics and diagnostics company. [President] Clinton, who applauded her work to provide low-cost testing to the general public, said the company is valued at $9 billion. See also at Clinton Foundation.org, here.
“Theranos is just one example among many for which major efforts and major claims about biomedical progress seem to be happening outside the peer-reviewed scientific literature…stealth research creates total ambiguity about what evidence can be trusted in a mix of possibly brilliant ideas, aggressive corporate announcements, and mass media hype.” See comment at Healthnewsreview.org here (February 23, 2015).
February 27, 2015
“Tech company Theranos pushes consumer lab-testing bill.”
For legislative text, here. For a blog on the topic, here. For cloud version of the legislative text, here. Article in March 2015 Laboratory Economics [subscription, here.]
February, 2015
“Theranos: Blood Tests that Need Just a Tiny Sample.”
Walgreens website, “At the Corner of Happy and Healthy,” accessed 2/17/2015. Here.
March, 2015
“Secret Shoppers Disappointed by Theranos.”
Laboratory Economics. By Jondavid Klipp. Here (subscription).
Summarizes experiences of “secret shoppers” from Piper Jaffray, an Arizona lab, The Dark Report, and a California lab. Most reported 3-day results and many reported standard venipuncture.
March 2, 2015
“Meet the Most Impressive Woman on Forbes’ Female Billionaire List.”
Identities.Mic. March 2, 2015. By Julie Zeilinger. Here.
March 5, 2015
“Millennials and Money: New Kids in the Forbes Billionaires Club.”
National Center for Business Journalism. By Rian Bosse. Elizabeth Holmes noted. Here.
March 6, 2015
“Theranos Files Comment In Support Of Food and Drug Administration Oversight Of Laboratory-Developed Tests.”
“Can Theranos Disrupt the Clinical Lab Testing Market? An Objective Look at Advantages, Liabilities, and Challenges That Must Be Addressed.” [Pathology] Executive War College. By Dr. Robert Boorstein. [Deck] Here.
“My last routine blood tests, drawn at my physician’s office…cost me $433 out of pocket, even after application of my “gold”-level insurance….Had I not been insured, the lab’s price for those tests would have been $2,411, according to the explanation of benefits sent me. The same tests, according to Theranos’s price menu, would have cost me $75.”
May 7, 2015
“New Laboratory Testing Firm Seeks to Shatter Old Diagnostic Testing Model.”
“A cholesterol test is $2.99, whereas it could cost hundreds in other locations…The response from the lab industry, they have so aggressively seeded false information about us into the press, into journalists, into physicians in the market we are in.”
October 7, 2015
“Theranos Founder Elizabeth Holmes to Deliver Keynote Address at 2015 Medical Innovation Summit.”
