Elizabeth Holmes discusses Theranos' problems on the 'Today' show in April. (Today show)
Update Wednesday, June 1: Forbes Slashes Estimates of Elizabeth Holmes' Net Worth
Forbes announced today it has revised its estimate of the net worth of Theranos founder Elizabeth Holmes, from last year's $4.5 billion to: absolutely nothing. Analysts cut the estimate of the company's net worth to $800 million, a fraction of its previous estimated value of $9 billion. The magazine reports Theranos had no comment. From the Forbes story:
Our estimate of Holmes’ wealth is based entirely on her 50% stake in Theranos, the blood-testing company she founded in 2003 with plans of revolutionizing the diagnostic test market. Theranos shares are not traded on any stock market; private investors purchased stakes in 2014 at a price that implied a $9 billion valuation for the company.
Since then, Theranos has been hit with allegations that its tests are inaccurate and is being investigated by an alphabet soup of federal agencies. That, plus new information indicating Theranos’ annual revenues are less than $100 million, has led FORBES to come up with a new, lower estimate of Theranos’ value.
FORBES spoke to a dozen venture capitalists, analysts and industry experts and concluded that a more realistic value for Theranos is $800 million, rather than $9 billion.
Update Thursday, May 26: And now, the lawsuits.
On the heels of Theranos voiding or correcting tens of thousands of blood tests it performed at its California lab, two suits seeking class action status have been filed in Northern California. The first suit was filed Wednesday on behalf of an unidentified Arizona man. The suit accuses the blood-testing company of fraud.
Today, a second class-action suit was filed on behalf of a man named Casey Jones. Jones visited a Theranos Wellness Center inside a Phoenix Walgreens in September 2015 to obtain a routine blood panel as well as a test marked "reproductive health," as he was concerned about his ability to impregnate his wife, the suit says. His doctor had spoken highly of Theranos' finger-prick test as being minimally invasive, and Jones was also influenced by heavy media coverage.
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"Upon arriving at Walgreens, Mr. Jones' experience differed greatly from what was promoted," the lawsuit claims. "He had several large vials of blood drawn ... the same as what he would have had drawn at any other lab. There was no disclaimer made to Mr. Jones about this apparent change in the blood draw procedure."
The suit claims Theranos breached its contract with the plaintiff by not drawing blood in the advertised, minimally invasive way. It also recaps the history of Theranos' disastrous government inspection of its lab and claims Theranos failed to maintain its equipment to industry or government standards. The suit also accuses Theranos of deceptive advertising and fraudulent business practices.
"Because of the reported issues with Theranos, Mr. Jones has serious concerns about the lab results he received, including concerns regarding the reliability and accuracy of the tests," the suit says.
The Verge says Theranos spokeswoman Brooke Buchanan issued the same response to today's lawsuit as she did to yesterday's: “The lawsuit filed today against Theranos is without merit. The company will vigorously defend itself against these claims.”
Whether any patients have been truly harmed by decisions they or their doctors made based on inaccurate Theranos results is not yet known. The Wall Street Journal has reported that one physician who received a corrected report said she'd unnecessarily sent a patient to the ER based on abnormally high test results.
Also of note for Theranos watchers: The Wall Street Journal Wednesday recounted the history of the company's partnership with Walgreens, which allowed for the opening of dozens of Theranos centers inside the drugstore chain's Arizona stores. The story suggests Walgreens, in its eagerness to expand into next-wave health care, did less than due diligence in vetting Theranos.
Original post: Theranos, From All Angles
Think fast:
Charlize Theron or Scarlett Johannson as Elizabeth Holmes in "Theranos: The Movie"?
There's a lot of drama here, as business stories go. Is the company going to be definitively exposed as the Enron of biotech startups? Or will it be vindicated as a misunderstood and unfairly persecuted innovator that, well, made a few mistakes.
If the former, you get the sense only a talent on a par with David Simon's could coherently dramatize the shortcomings of the multiple institutions implicated in this mess. The story is compelling even without the appearance to date of the most important characters -- real-life patients who may have been harmed by Theranos' faulty blood tests.
That may not be the case much longer. Last week, we saw the first report of an actual patient impacted by erroneous results issued by Theranos' California lab. The Wall Street Journal, in a story about thousands of blood tests Theranos now says were incorrect, reported that a physician in the Phoenix area recently received a revised report for a Theranos patient whom the doctor unnecessarily sent to the ER based on abnormally high results.
Nick Stockton, who in Wired, Friday, wrote that Theranos "is really testing the old adage that all press is good press," reported the company has left itself vulnerable to all manner of lawsuits:
Many people probably made medical decisions based on those two years of voided tests. Or perhaps they wrongfully decided to forgo medical treatment for a misdiagnosed condition. “If Theranos negligently did blood tests, then someone has a right to sue,” says [UC Berkeley law professor Steven] Davidoff-Soloman. “And it looks like it might be a good case.” But so far, he says he has not seen any examples where a person has popped up and said they were adversely affected by the results from a Theranos test. So again, wait and see.
As an accredited lab, Theranos was available to patients through Medicare and Medicaid. “Here you have a situation where they were not just deceiving patients, but also the federal government, who is paying for those tests,” says [University of Michigan law professor Adam] Pritchard. “That is something the Department of Justice is going to be very interested in.” The DOJ itself could bring suit. And depending on what that suit entails, class action lawyers could come calling with cases of mass consumer fraud. Nightmare.
'Whatever They're Up To, I Can't Figure It Out'
Dr. Norman Paradis, a professor of medicine at Dartmouth who has consulted for both diagnostic startups and biomed investors, told me recently that several years ago he looked into Theranos at the request of some potential investors. He found nothing that could be assessed.
"I said whatever they're up to, I can't figure it out. I didn't see it in their patents or regulatory filings. Their patents -- there's nothing there. There's nothing you look at and say, 'Oh I can build that.'"
Paradis says the molecular diagnostics space is not exactly fertile ground for startups to begin with, because of the royalties due companies that have developed the antibodies indicating a particular illness or condition. Because of this, he says, it is unlikely the low-cost tests Theranos offers are breaking even.
"I have seen smart business types look at this model, and they’ve said I can’t see how you make money here."
Christina Farr, in Fast Company, writes that whatever the company's business plan, it seemed to be a nonstarter with the most prestigious biotech investing firms. "None of the top biotech investors invested in Theranos," Farr wrote. "Five of the best-regarded biotech firms—Venrock, Third Rock Ventures, Polaris, Deerfield, Versant—either didn't meet with Theranos at all or passed on the pitch. The Silicon Valley firms with health care practices, like Google Ventures and Bessemer Venture Partners, weren't swayed, either."
"For Theranos to decide to go the FDA route does show considerable rigor on Theranos’ part," Paradis says. "When they made that decision, people were not doing it that way."
Soon, we may get another key development in the story, courtesy of the U.S. government. The Centers for Medicare & Medicaid Services is still mulling whether to revoke the license of Theranos' California lab, and whether to suspend Elizabeth Holmes from involvement in the blood-testing industry for two years. If things go that way, the company still has a couple of administrative appeals available to it. And beyond that, there's always the courts.
Meanwhile, Theranos is still hiring, and Holmes is scheduled to give a presentation at a plenary session of the American Association for Clinical Chemistry's annual meeting in Philadelphia on Aug. 1. "For the first time, Holmes will present data at a scientific conference that describes Theranos’ technologies, including small sample volume testing and finger-stick collection," said the press release.
That one should be put on pay-per-view.
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Below are some of the most interesting recent takes on the Theranos saga:
(I)f you peel back all of the layers of this tale, at the center you will find one of the more insidious culprits: the Silicon Valley tech press. They embraced Holmes and her start-up with a surprising paucity of questions about the technology she had supposedly developed. They praised her as “the next Steve Jobs,” over and over (the black turtleneck didn’t hurt), until it was no longer a question, but seemingly a fact. At TechCrunch Disrupt, blogger Jon Shieber had his blood drawn onstage as he interviewed her. There were no tough questions about whether Theranos’s technology actually worked; just praise. When it seemed that the tech press had vetted Holmes, she subsequently went mainstream. She got her New Yorker profile, and her face appeared on the cover of T: The New York Times Style Magazine, among others.
Troubled blood-testing startup Theranos still has one big, vocal fan: the guy that invested the seed money to get the company started, famed investor Tim Draper. Draper tells Business Insider that of all the startups out there, Theranos is among those he's most excited about. ... Although Draper is not listed as a board member, his take is that all of the questions about Theranos is smoke and mirrors from the established blood-testing industry that doesn't want to see itself overthrown by a one-drop-of-blood-alternative. He says he's seen this struggle many times in his investing career, how telecom companies fought Skype, taxis fought Uber, car companies fought Tesla and so on.
(A)fter we find our scapegoats, the problem will not be solved. Until we address all the factors that led to Theranos' rise and its downfall, this will happen again. Launch, hype-cycle, demise. Launch, hype-cycle, demise. Again and again. One the biggest catalysts for this cycle? Dumb money. ...The biotech funding process might be flawed, but it works well enough to smell a very large rat.
At issue is the secrecy with which Theranos developed and brought to market the technology and its proprietary blood-testing process from day one. Theranos did not share with outside scientists which machines the company used to perform its tests, and they wouldn’t then reveal how its technology differed from the microfluidics that other companies were using to perform similar—though less extensive—assays as Theranos’. Nor did they publish in any peer-reviewed journal any research that proved the effectiveness of their product. To do so, Holmes said, would make them lose their competitive advantage of being the first to offer such tests. When Dr. Eric Topol, director of the Scripps Translational Science Institute, had his blood drawn and tested using the system, he says, “I wasn’t allowed to see the equipment, wasn’t allowed to go near it.”
(E)arly critics of Theranos complained the company had published little data in peer-reviewed journals that would have helped provide insight into the quality of its tests. But innovators often see ignoring criticism as a feature, says University of Toronto economist Joshua Gans, author of a recent book on disruption. That is particularly true when the criticism comes from incumbents who, as ousted Zenefits chief Parker Conrad once complained, often cry foul and look to regulators for protection. The problem is that while critics may be protecting turf, there also may be some truth to what they say. Indeed, the norms incumbents adhere to, and the rules they play by, are often there for reasons that go beyond protecting their moats. That’s particularly true of many old-line industries, such as banking, insurance brokers and medicine, that seem ripe for new entrants.
The vast majority of FDA-approved medically important laboratory tests are based on blood taken from a vein, not from the finger. ... To understand why that matters, let’s start with some simple physiology. The human body can be considered a series of compartments; the concentration of any given molecule in blood or tissue fluid may vary from one compartment to the next. A small molecule, such as glucose, can move easily between these compartments, and any bodily fluid can generally be used to test its concentration. This is why testing blood sugar with a finger prick works. But large, medically important molecules like proteins and lipids are not always found in uniform concentrations throughout the body. The composition of blood from finger pricks from the same person can vary, a problem that doesn’t happen in blood taken from a vein. When you lance a fingertip, you get both blood and tissue fluid, and this means that the concentration of molecules may be different than if the blood sample comes from a vein.
Much of the debate over the last few months has been about whether Theranos’s technology can actually do what the company has said it can. But there’s a dubious assumption at the heart of Theranos, arguably just as damning as the questions about its technology. Theranos wants us to believe that ostensibly healthy people can get healthier by having more tests. But the science suggests that is far from true.
Even beyond potential misrepresentation issues, we believe the SEC may also be focused on the adequacy of internal controls at privately-held companies, potentially viewing governance and control problems as contributing factors to other issues. ...(I)n a recent speech addressing issues relating to pre-IPO companies, SEC Chair Mary Jo White noted that the SEC was looking closely at privately-held “unicorns”, even where the investors appeared to be venture capital and private equity funds. She stated that control issues were a major risk factor that could lead to opportunities to misstate financial results: “The risk of distortion and inaccuracy is amplified because start-up companies, even quite mature ones, often have far less robust internal controls and governance procedures than most public companies.”
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Holmes discusses Theranos' problems on the 'Today' show in April.","description":null,"title":"Holmes","credit":"Today show","status":"inherit","fetchFailed":false,"isLoading":false}},"audioPlayerReducer":{"postId":"stream_live"},"authorsReducer":{"jbrooks":{"type":"authors","id":"80","meta":{"index":"authors_1716337520","id":"80","found":true},"name":"Jon Brooks","firstName":"Jon","lastName":"Brooks","slug":"jbrooks","email":"jbrooks@kqed.org","display_author_email":true,"staff_mastheads":["science"],"title":"Digital Editor","bio":"Jon Brooks is a former Digital Editor for KQED Science. He is the former editor of KQED’s daily news blog, News Fix. In 2014, he won a California Journalism Award for his coverage of ride services like Uber and Lyft and the taxi industry. A veteran blogger, he previously worked for Yahoo! in various news writing and editing roles. Jon is also a playwright whose work has been produced in San Francisco, New York, Italy, and around the U.S. He has written about film for his own blog and studied film at Boston University.","avatar":"https://secure.gravatar.com/avatar/98887f7ed1c876ed414d4c915e969584?s=600&d=blank&r=g","twitter":"jbrooksfoy","facebook":null,"instagram":null,"linkedin":null,"sites":[{"site":"arts","roles":["Contributor","editor"]},{"site":"news","roles":["author"]},{"site":"futureofyou","roles":["administrator"]},{"site":"mindshift","roles":["editor"]},{"site":"stateofhealth","roles":["editor"]},{"site":"science","roles":["administrator"]},{"site":"quest","roles":["editor"]}],"headData":{"title":"Jon Brooks | KQED","description":"Digital Editor","ogImgSrc":"https://secure.gravatar.com/avatar/98887f7ed1c876ed414d4c915e969584?s=600&d=blank&r=g","twImgSrc":"https://secure.gravatar.com/avatar/98887f7ed1c876ed414d4c915e969584?s=600&d=blank&r=g"},"isLoading":false,"link":"/author/jbrooks"}},"breakingNewsReducer":{},"campaignFinanceReducer":{},"pagesReducer":{},"postsReducer":{"stream_live":{"type":"live","id":"stream_live","audioUrl":"https://streams.kqed.org/kqedradio","title":"Live Stream","excerpt":"Live Stream information currently unavailable.","link":"/radio","featImg":"","label":{"name":"KQED Live","link":"/"}},"stream_kqedNewscast":{"type":"posts","id":"stream_kqedNewscast","audioUrl":"https://www.kqed.org/.stream/anon/radio/RDnews/newscast.mp3?_=1","title":"KQED Newscast","featImg":"","label":{"name":"88.5 FM","link":"/"}},"futureofyou_157362":{"type":"posts","id":"futureofyou_157362","meta":{"index":"posts_1716263798","site":"futureofyou","id":"157362","found":true},"parent":0,"labelTerm":{"site":"futureofyou"},"blocks":[],"publishDate":1464800229,"format":"standard","disqusTitle":"Theranos CEO Holmes' Net Worth Is Now Zero, Says Forbes","title":"Theranos CEO Holmes' Net Worth Is Now Zero, Says Forbes","headTitle":"KQED Future of You | KQED Science","content":"\u003cp>\u003cstrong>Update Wednesday, June 1:\u003c/strong> Forbes Slashes Estimates of Elizabeth Holmes' Net Worth\u003c/p>\n\u003cp>Forbes \u003ca href=\"http://www.forbes.com/sites/matthewherper/2016/06/01/from-4-5-billion-to-nothing-forbes-revises-estimated-net-worth-of-theranos-founder-elizabeth-holmes/#610806f12f29\" target=\"_blank\">announced today\u003c/a> it has revised its estimate of the net worth of Theranos founder Elizabeth Holmes, from last year's $4.5 billion to: absolutely nothing. Analysts cut the estimate of the company's net worth to $800 million, a fraction of its previous estimated value of $9 billion. The magazine reports Theranos had no comment. From the Forbes story:\u003c/p>\n\u003cblockquote>\u003cp>Our estimate of Holmes’ wealth is based entirely on her 50% stake in Theranos, the blood-testing company she founded in 2003 with plans of revolutionizing the diagnostic test market. Theranos shares are not traded on any stock market; private investors purchased stakes in 2014 at a price that implied a $9 billion valuation for the company.\u003c/p>\n\u003cp>Since then, Theranos has been hit with allegations that its tests are inaccurate and is being investigated by an alphabet soup of federal agencies. That, plus new information indicating Theranos’ annual revenues are less than $100 million, has led FORBES to come up with a new, lower estimate of Theranos’ value.\u003c/p>\n\u003cp>FORBES spoke to a dozen venture capitalists, analysts and industry experts and concluded that a more realistic value for Theranos is $800 million, rather than $9 billion.\u003c/p>\u003c/blockquote>\n\u003cp>\u003cstrong>Update Thursday, May 26: \u003c/strong> And now, the lawsuits.\u003c/p>\n\u003cp>On the heels of Theranos \u003ca href=\"http://ww2.kqed.org/futureofyou/2016/05/19/theranos-corrects-tens-of-thousands-of-blood-tests/\">voiding or correcting\u003c/a> tens of thousands of blood tests it performed at its California lab, two suits seeking class action status have been filed in Northern California. The \u003ca href=\"http://fortune.com/2016/05/26/theranos-class-action-lawsuit/\">first suit\u003c/a> was filed Wednesday on behalf of an unidentified Arizona man. The suit accuses the blood-testing company of fraud.\u003c/p>\n\u003cp>Today, a \u003ca href=\"https://cdn2.vox-cdn.com/uploads/chorus_asset/file/6552851/jones-theranos.0.pdf\">second class-action suit\u003c/a> was filed on behalf of a man named Casey Jones. Jones visited a Theranos Wellness Center inside a Phoenix Walgreens in September 2015 to obtain a routine blood panel as well as a test marked \"reproductive health,\" as he was concerned about his ability to impregnate his wife, the suit says. His doctor had spoken highly of Theranos' finger-prick test as being minimally invasive, and Jones was also influenced by heavy media coverage.\u003c/p>\n\u003cp>[ad fullwidth]\u003c/p>\n\u003cp>\"Upon arriving at Walgreens, Mr. Jones' experience differed greatly from what was promoted,\" the lawsuit claims. \"He had several large vials of blood drawn ... the same as what he would have had drawn at any other lab. There was no disclaimer made to Mr. Jones about this apparent change in the blood draw procedure.\"\u003c/p>\n\u003cp>The suit claims Theranos breached its contract with the plaintiff by not drawing blood in the advertised, minimally invasive way. It also recaps the history of Theranos' disastrous government inspection of its lab and claims Theranos failed to maintain its equipment to industry or government standards. The suit also accuses Theranos of deceptive advertising and fraudulent business practices.\u003c/p>\n\u003cp>\"Because of the reported issues with Theranos, Mr. Jones has serious concerns about the lab results he received, including concerns regarding the reliability and accuracy of the tests,\" the suit says.\u003c/p>\n\u003cp>\u003ca href=\"http://www.vanityfair.com/news/2016/05/elizabeth-holmes-theranos-class-action-lawsuit\">The Verge\u003c/a> says Theranos spokeswoman Brooke Buchanan issued the same response to today's lawsuit as she did to yesterday's: “The lawsuit filed today against Theranos is without merit. The company will vigorously defend itself against these claims.”\u003c/p>\n\u003cp>Whether any patients have been truly harmed by decisions they or their doctors made based on inaccurate Theranos results is not yet known. The Wall Street Journal has\u003ca href=\"http://www.wsj.com/articles/theranos-voids-two-years-of-edison-blood-test-results-1463616976\"> reported\u003c/a> that one physician who received a corrected report said she'd unnecessarily sent a patient to the ER based on abnormally high test results.\u003c/p>\n\u003cp>Also of note for Theranos watchers: The Wall Street Journal Wednesday \u003ca href=\"http://www.wsj.com/articles/craving-growth-walgreens-dismissed-its-doubts-about-theranos-1464207285\">recounted the history\u003c/a> of the company's partnership with Walgreens, which allowed for the opening of dozens of Theranos centers inside the drugstore chain's Arizona stores. The story suggests Walgreens, in its eagerness to expand into next-wave health care, did less than due diligence in vetting Theranos.\u003c/p>\n\u003cp>\u003cstrong>Original post: Theranos, From All Angles\u003c/strong>\u003c/p>\n\u003cp>Think fast:\u003c/p>\n\u003cp>Charlize Theron or Scarlett Johannson as Elizabeth Holmes in \"Theranos: The Movie\"?\u003c/p>\n\u003cp>There's a lot of drama here, as business stories go. Is the company going to be definitively exposed as the Enron of biotech startups? Or will it be vindicated as a misunderstood and unfairly persecuted innovator that, well, made a few mistakes.\u003c/p>\n\u003cp>If the former, you get the sense only a talent on a par with \u003ca href=\"http://www.theatlantic.com/magazine/archive/2008/01/the-angriest-man-in-television/306581/\">David Simon's\u003c/a> could coherently dramatize the shortcomings of the multiple institutions implicated in this mess. The story is compelling even without the appearance to date of the most important characters -- real-life patients who may have been harmed by Theranos' \u003ca href=\"http://ww2.kqed.org/futureofyou/2016/05/19/theranos-corrects-tens-of-thousands-of-blood-tests/\">faulty blood tests\u003c/a>.\u003c/p>\n\u003caside class=\"pullquote alignright\">\u003ca href=\"#articles\">\u003cstrong>See below for Theranos analysis from around the Web.\u003c/strong>\u003c/a>\u003c/aside>\n\u003cp>That may not be the case much longer. Last week, we saw the first report of an actual patient impacted by erroneous results issued by Theranos' California lab. The Wall Street Journal, in a \u003ca href=\"http://www.wsj.com/articles/theranos-voids-two-years-of-edison-blood-test-results-1463616976\">story\u003c/a> about thousands of blood tests Theranos now says were incorrect, reported that a physician in the Phoenix area recently received a revised report for a Theranos patient whom the doctor unnecessarily sent to the ER based on abnormally high results.\u003c/p>\n\u003cp>Nick Stockton, who in \u003ca href=\"http://www.wired.com/2016/05/theranos-inching-towards-legal-bull-issh/\">Wired\u003c/a>, Friday, wrote that Theranos \"is really testing the old adage that all press is good press,\" reported the company has left itself vulnerable to all manner of lawsuits:\u003c/p>\n\u003cblockquote>\u003cp>Many people probably made medical decisions based on those two years of voided tests. Or perhaps they wrongfully decided to forgo medical treatment for a misdiagnosed condition. “If Theranos negligently did blood tests, then someone has a right to sue,” says [UC Berkeley law professor Steven] Davidoff-Soloman. “And it looks like it might be a good case.” But so far, he says he has not seen any examples where a person has popped up and said they were adversely affected by the results from a Theranos test. So again, wait and see.\u003c/p>\n\u003cp>As an accredited lab, Theranos was available to patients through Medicare and Medicaid. “Here you have a situation where they were not just deceiving patients, but also the federal government, who is paying for those tests,” says [University of Michigan law professor Adam] Pritchard. “That is something the Department of Justice is going to be very interested in.” The DOJ itself could bring suit. And depending on what that suit entails, class action lawyers could come calling with cases of mass consumer fraud. Nightmare.\u003c/p>\u003c/blockquote>\n\u003cp>\u003cstrong>'Whatever They're Up To, I Can't Figure It Out'\u003c/strong>\u003c/p>\n\u003cp>Dr. Norman Paradis, a professor of medicine at Dartmouth who has consulted for both diagnostic startups and biomed investors, told me recently that several years ago he looked into Theranos at the request of some potential investors. He found nothing that could be assessed.\u003c/p>\n\u003caside class=\"pullquote alignright\">'Their patents — there’s nothing there. There’s nothing you look at and say, ‘Oh, I can build that.''\u003ccite>Dr. Norman Paradis, Geisel School of Medicine, Dartmouth College\u003c/cite>\u003c/aside>\n\u003cp>\"I said whatever they're up to, I can't figure it out. I didn't see it in their patents or regulatory filings. Their patents -- there's nothing there. There's nothing you look at and say, 'Oh I can build that.'\"\u003c/p>\n\u003cp>Paradis says the molecular diagnostics space is not exactly fertile ground for startups to begin with, because of the royalties due companies that have developed the antibodies indicating a particular illness or condition. Because of this, he says, it is unlikely the low-cost tests Theranos offers are breaking even.\u003c/p>\n\u003cp>\"I have seen smart business types look at this model, and they’ve said I can’t see how you make money here.\"\u003c/p>\n\u003cp>Christina Farr, in \u003ca href=\"http://www.fastcompany.com/3059230/the-theranos-scandal-is-just-the-beginning\">Fast Company\u003c/a>, writes that whatever the company's business plan, it seemed to be a nonstarter with the most prestigious biotech investing firms. \"None of the top biotech investors invested in Theranos,\" Farr wrote. \"Five of the best-regarded biotech firms—Venrock, Third Rock Ventures, Polaris, Deerfield, Versant—either didn't meet with Theranos at all or passed on the pitch. The Silicon Valley firms with health care practices, like Google Ventures and Bessemer Venture Partners, weren't swayed, either.\"\u003c/p>\n\u003cp>Dartmouth's Paradis does give the company credit for submitting over 100 tests for FDA approval, even though a \u003ca href=\"http://www.theverge.com/2015/11/17/9750048/ldt-loophole-fda-hearing-theranos-lab-tests\">legal loophole\u003c/a> regarding \"\u003ca href=\"http://www.fda.gov/medicaldevices/productsandmedicalprocedures/invitrodiagnostics/ucm407296.htm\">Laboratory Developed Tests\u003c/a>\" allows it and \u003ca href=\"http://www.theverge.com/science/2015/11/11/9706356/fda-theranos-health-diagnostics-cancer-tests-regulation-loophole-ldt\">other diagnostic startups\u003c/a> to bring these tests to market without doing so. (The FDA plans on issuing its final version of a \u003ca href=\"http://www.fda.gov/downloads/medicaldevices/deviceregulationandguidance/guidancedocuments/ucm416685.pdf\">draft plan\u003c/a> to phase in \u003ca href=\"https://www.genomeweb.com/molecular-diagnostics/fda-finalize-ldt-guidance-amid-uncertainty-number-genetic-tests-impacted\">oversight of LDTS\u003c/a> sometime this year.)\u003c/p>\n\u003cp>\"For Theranos to decide to go the FDA route does show considerable rigor on Theranos’ part,\" Paradis says. \"When they made that decision, people were not doing it that way.\"\u003c/p>\n\u003cp>Soon, we may get another key development in the story, courtesy of the U.S. government. The Centers for Medicare & Medicaid Services is still mulling whether to revoke the license of Theranos' California lab, and whether to suspend Elizabeth Holmes from involvement in the blood-testing industry for two years. If things go that way, the company still has a couple of administrative appeals available to it. And beyond that, there's always the courts.\u003c/p>\n\u003cp>Meanwhile, Theranos is \u003ca href=\"https://www.statnews.com/2016/05/19/theranos-expansion-plans/\">still hiring\u003c/a>, and Holmes is scheduled to give a presentation at a plenary session of the American Association for Clinical Chemistry's annual meeting in Philadelphia on Aug. 1. \"For the first time, Holmes will present data at a scientific conference that describes Theranos’ technologies, including small sample volume testing and finger-stick collection,\" said the press release.\u003c/p>\n\u003cp>That one should be put on pay-per-view.\u003c/p>\n\u003chr>\n\u003cp>[ad floatright]\u003c/p>\n\u003cp>\u003ca id=\"articles\">\u003c/a>Below are some of the most interesting recent takes on the Theranos saga:\u003c/p>\n\u003cul>\n\u003cli>\u003ca href=\"http://www.vanityfair.com/news/2016/05/theranos-silicon-valley-media\">The Secret Culprit in the Theranos Mess\u003c/a> (Nick Bilton, Vanity Fair)\u003cbr>\n\u003cblockquote>\u003cp>(I)f you peel back all of the layers of this tale, at the center you will find one of the more insidious culprits: the Silicon Valley tech press. They embraced Holmes and her start-up with a surprising paucity of questions about the technology she had supposedly developed. They praised her as “the next Steve Jobs,” over and over (the black turtleneck didn’t hurt), until it was no longer a question, but seemingly a fact. At TechCrunch Disrupt, blogger Jon Shieber had his blood drawn onstage as he interviewed her. There were no tough questions about whether Theranos’s technology actually worked; just praise. When it seemed that the tech press had vetted Holmes, she subsequently went mainstream. She got her New Yorker profile, and her face appeared on the cover of T: The New York Times Style Magazine, among others.\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://www.businessinsider.com/why-investor-tim-draper-still-loves-theranos-2016-5\">Blood-testing 'vampires' want to take down Theranos, says investor Tim Draper\u003c/a> (Julie Bort, Business Insider)\u003cbr>\n\u003cblockquote>\u003cp>Troubled blood-testing startup Theranos still has one big, vocal fan: the guy that invested the seed money to get the company started, famed investor Tim Draper. Draper tells Business Insider that of all the startups out there, Theranos is among those he's most excited about. ... Although Draper is not listed as a board member, his take is that all of the questions about Theranos is smoke and mirrors from the established blood-testing industry that doesn't want to see itself overthrown by a one-drop-of-blood-alternative. He says he's seen this struggle many times in his investing career, how telecom companies fought Skype, taxis fought Uber, car companies fought Tesla and so on.\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://www.fastcompany.com/3059230/the-theranos-scandal-is-just-the-beginning\">The Theranos Scandal Is Just The Beginning\u003c/a> (Christina Farr, Fast Company)\u003cbr>\n\u003cblockquote>\u003cp>(A)fter we find our scapegoats, the problem will not be solved. Until we address all the factors that led to Theranos' rise and its downfall, this will happen again. Launch, hype-cycle, demise. Launch, hype-cycle, demise. Again and again. One the biggest catalysts for this cycle? Dumb money. ...The biotech funding process might be flawed, but it works well enough to smell a very large rat.\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://time.com/4299943/the-theranos-downfall-was-inevitable/\">The Theranos Downfall Was Inevitable\u003c/a> (Alice Park, Time)\u003cbr>\n\u003cblockquote>\u003cp>At issue is the secrecy with which Theranos developed and brought to market the technology and its proprietary blood-testing process from day one. Theranos did not share with outside scientists which machines the company used to perform its tests, and they wouldn’t then reveal how its technology differed from the microfluidics that other companies were using to perform similar—though less extensive—assays as Theranos’. Nor did they publish in any peer-reviewed journal any research that proved the effectiveness of their product. To do so, Holmes said, would make them lose their competitive advantage of being the first to offer such tests. When Dr. Eric Topol, director of the Scripps Translational Science Institute, had his blood drawn and tested using the system, he says, “I wasn’t allowed to see the equipment, wasn’t allowed to go near it.”\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://www.wsj.com/articles/from-lending-club-to-theranos-the-limits-of-disruption-1463161745\">From LendingClub to Theranos, the Limits of Disruption\u003c/a> (Justin Lahart, The Wall Street Journal)\u003cbr>\n\u003cblockquote>\u003cp>(E)arly critics of Theranos complained the company had published little data in peer-reviewed journals that would have helped provide insight into the quality of its tests. But innovators often see ignoring criticism as a feature, says University of Toronto economist Joshua Gans, author of a recent book on disruption. That is particularly true when the criticism comes from incumbents who, as ousted Zenefits chief Parker Conrad once complained, often cry foul and look to regulators for protection. The problem is that while critics may be protecting turf, there also may be some truth to what they say. Indeed, the norms incumbents adhere to, and the rules they play by, are often there for reasons that go beyond protecting their moats. That’s particularly true of many old-line industries, such as banking, insurance brokers and medicine, that seem ripe for new entrants.\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://ww2.kqed.org/futureofyou/2016/04/25/analysis-why-medical-lab-experts-were-always-skeptical-of-theranos/\">Analysis: Why Medical Lab Experts Were Always Skeptical of Theranos\u003c/a> (Norman A. Paradis, The Conversation)\u003cbr>\n\u003cblockquote>\u003cp>The vast majority of FDA-approved medically important laboratory tests are based on blood taken from a vein, not from the finger. ... To understand why that matters, let’s start with some simple physiology. The human body can be considered a series of compartments; the concentration of any given molecule in blood or tissue fluid may vary from one compartment to the next. A small molecule, such as glucose, can move easily between these compartments, and any bodily fluid can generally be used to test its concentration. This is why testing blood sugar with a finger prick works. But large, medically important molecules like proteins and lipids are not always found in uniform concentrations throughout the body. The composition of blood from finger pricks from the same person can vary, a problem that doesn’t happen in blood taken from a vein. When you lance a fingertip, you get both blood and tissue fluid, and this means that the concentration of molecules may be different than if the blood sample comes from a vein.\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://fivethirtyeight.com/features/theranos-is-wrong-we-dont-need-more-blood-tests/\">Theranos is Wrong: We Don't Need More Blood Tests\u003c/a> (Katherine Hobson, FiveThirtyEight)\u003cbr>\n\u003cblockquote>\u003cp>Much of the debate over the last few months has been about whether Theranos’s technology can actually do what the company has said it can. But there’s a dubious assumption at the heart of Theranos, arguably just as damning as the questions about its technology. Theranos wants us to believe that ostensibly healthy people can get healthier by having more tests. But the science suggests that is far from true.\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://www.natlawreview.com/article/theranos-sec-s-pursuit-unicorns-and-taking-reins-internal-controls\">Theranos, the SEC’s Pursuit of Unicorns, and Taking the Reins of Internal Controls\u003c/a> (The National Law Review)\u003cbr>\n\u003cblockquote>\u003cp>Even beyond potential misrepresentation issues, we believe the SEC may also be focused on the adequacy of internal controls at privately-held companies, potentially viewing governance and control problems as contributing factors to other issues. ...(I)n a recent speech addressing issues relating to pre-IPO companies, SEC Chair Mary Jo White noted that the SEC was looking closely at privately-held “unicorns”, even where the investors appeared to be venture capital and private equity funds. She stated that control issues were a major risk factor that could lead to opportunities to misstate financial results: “The risk of distortion and inaccuracy is amplified because start-up companies, even quite mature ones, often have far less robust internal controls and governance procedures than most public companies.”\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003c/ul>\n\n","disqusIdentifier":"157362 http://ww2.kqed.org/futureofyou/?p=157362","disqusUrl":"https://ww2.kqed.org/futureofyou/2016/06/01/theranos-from-all-angles/","stats":{"hasVideo":false,"hasChartOrMap":false,"hasAudio":false,"hasPolis":false,"wordCount":2836,"hasGoogleForm":false,"hasGallery":false,"hasHearkenModule":false,"iframeSrcs":[],"paragraphCount":45},"modified":1464806234,"excerpt":"The Theranos saga is about as dramatic as it gets when it comes to Silicon Valley stories.","headData":{"twImgId":"","twTitle":"","ogTitle":"","ogImgId":"","twDescription":"","description":"The Theranos saga is about as dramatic as it gets when it comes to Silicon Valley stories.","title":"Theranos CEO Holmes' Net Worth Is Now Zero, Says Forbes | KQED","ogDescription":"","schema":{"@context":"http://schema.org","@type":"Article","headline":"Theranos CEO Holmes' Net Worth Is Now Zero, Says Forbes","datePublished":"2016-06-01T09:57:09-07:00","dateModified":"2016-06-01T11:37:14-07:00","image":"https://cdn.kqed.org/wp-content/uploads/2020/02/KQED-OG-Image@1x.png","author":{"@type":"Person","name":"Jon Brooks","jobTitle":"Digital Editor","url":"https://www.kqed.org/author/jbrooks"}},"authorsData":[{"type":"authors","id":"80","meta":{"index":"authors_1716337520","id":"80","found":true},"name":"Jon Brooks","firstName":"Jon","lastName":"Brooks","slug":"jbrooks","email":"jbrooks@kqed.org","display_author_email":true,"staff_mastheads":["science"],"title":"Digital Editor","bio":"Jon Brooks is a former Digital Editor for KQED Science. He is the former editor of KQED’s daily news blog, News Fix. In 2014, he won a California Journalism Award for his coverage of ride services like Uber and Lyft and the taxi industry. A veteran blogger, he previously worked for Yahoo! in various news writing and editing roles. Jon is also a playwright whose work has been produced in San Francisco, New York, Italy, and around the U.S. He has written about film for his own blog and studied film at Boston University.","avatar":"https://secure.gravatar.com/avatar/98887f7ed1c876ed414d4c915e969584?s=600&d=blank&r=g","twitter":"jbrooksfoy","facebook":null,"instagram":null,"linkedin":null,"sites":[{"site":"arts","roles":["Contributor","editor"]},{"site":"news","roles":["author"]},{"site":"futureofyou","roles":["administrator"]},{"site":"mindshift","roles":["editor"]},{"site":"stateofhealth","roles":["editor"]},{"site":"science","roles":["administrator"]},{"site":"quest","roles":["editor"]}],"headData":{"title":"Jon Brooks | KQED","description":"Digital Editor","ogImgSrc":"https://secure.gravatar.com/avatar/98887f7ed1c876ed414d4c915e969584?s=600&d=blank&r=g","twImgSrc":"https://secure.gravatar.com/avatar/98887f7ed1c876ed414d4c915e969584?s=600&d=blank&r=g"},"isLoading":false,"link":"/author/jbrooks"}],"imageData":{"ogImageSize":{"file":"https://ww2.kqed.org/app/uploads/sites/13/2016/04/Holmes-1.jpg","width":632,"height":315},"ogImageWidth":"632","ogImageHeight":"315","twitterImageUrl":"https://ww2.kqed.org/app/uploads/sites/13/2016/04/Holmes-1.jpg","twImageSize":{"file":"https://ww2.kqed.org/app/uploads/sites/13/2016/04/Holmes-1.jpg","width":632,"height":315},"twitterCard":"summary_large_image"},"tagData":{"tags":["Elizabeth Holmes","theranos"]}},"guestAuthors":[],"slug":"theranos-from-all-angles","status":"publish","path":"/futureofyou/157362/theranos-from-all-angles","audioTrackLength":null,"parsedContent":[{"type":"contentString","content":"\u003cdiv class=\"post-body\">\u003cp>\u003cp>\u003cstrong>Update Wednesday, June 1:\u003c/strong> Forbes Slashes Estimates of Elizabeth Holmes' Net Worth\u003c/p>\n\u003cp>Forbes \u003ca href=\"http://www.forbes.com/sites/matthewherper/2016/06/01/from-4-5-billion-to-nothing-forbes-revises-estimated-net-worth-of-theranos-founder-elizabeth-holmes/#610806f12f29\" target=\"_blank\">announced today\u003c/a> it has revised its estimate of the net worth of Theranos founder Elizabeth Holmes, from last year's $4.5 billion to: absolutely nothing. Analysts cut the estimate of the company's net worth to $800 million, a fraction of its previous estimated value of $9 billion. The magazine reports Theranos had no comment. From the Forbes story:\u003c/p>\n\u003cblockquote>\u003cp>Our estimate of Holmes’ wealth is based entirely on her 50% stake in Theranos, the blood-testing company she founded in 2003 with plans of revolutionizing the diagnostic test market. Theranos shares are not traded on any stock market; private investors purchased stakes in 2014 at a price that implied a $9 billion valuation for the company.\u003c/p>\n\u003cp>Since then, Theranos has been hit with allegations that its tests are inaccurate and is being investigated by an alphabet soup of federal agencies. That, plus new information indicating Theranos’ annual revenues are less than $100 million, has led FORBES to come up with a new, lower estimate of Theranos’ value.\u003c/p>\n\u003cp>FORBES spoke to a dozen venture capitalists, analysts and industry experts and concluded that a more realistic value for Theranos is $800 million, rather than $9 billion.\u003c/p>\u003c/blockquote>\n\u003cp>\u003cstrong>Update Thursday, May 26: \u003c/strong> And now, the lawsuits.\u003c/p>\n\u003cp>On the heels of Theranos \u003ca href=\"http://ww2.kqed.org/futureofyou/2016/05/19/theranos-corrects-tens-of-thousands-of-blood-tests/\">voiding or correcting\u003c/a> tens of thousands of blood tests it performed at its California lab, two suits seeking class action status have been filed in Northern California. The \u003ca href=\"http://fortune.com/2016/05/26/theranos-class-action-lawsuit/\">first suit\u003c/a> was filed Wednesday on behalf of an unidentified Arizona man. The suit accuses the blood-testing company of fraud.\u003c/p>\n\u003cp>Today, a \u003ca href=\"https://cdn2.vox-cdn.com/uploads/chorus_asset/file/6552851/jones-theranos.0.pdf\">second class-action suit\u003c/a> was filed on behalf of a man named Casey Jones. Jones visited a Theranos Wellness Center inside a Phoenix Walgreens in September 2015 to obtain a routine blood panel as well as a test marked \"reproductive health,\" as he was concerned about his ability to impregnate his wife, the suit says. His doctor had spoken highly of Theranos' finger-prick test as being minimally invasive, and Jones was also influenced by heavy media coverage.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>","attributes":{"named":{},"numeric":[]}},{"type":"component","content":"","name":"ad","attributes":{"named":{"label":"fullwidth"},"numeric":["fullwidth"]}},{"type":"contentString","content":"\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>\"Upon arriving at Walgreens, Mr. Jones' experience differed greatly from what was promoted,\" the lawsuit claims. \"He had several large vials of blood drawn ... the same as what he would have had drawn at any other lab. There was no disclaimer made to Mr. Jones about this apparent change in the blood draw procedure.\"\u003c/p>\n\u003cp>The suit claims Theranos breached its contract with the plaintiff by not drawing blood in the advertised, minimally invasive way. It also recaps the history of Theranos' disastrous government inspection of its lab and claims Theranos failed to maintain its equipment to industry or government standards. The suit also accuses Theranos of deceptive advertising and fraudulent business practices.\u003c/p>\n\u003cp>\"Because of the reported issues with Theranos, Mr. Jones has serious concerns about the lab results he received, including concerns regarding the reliability and accuracy of the tests,\" the suit says.\u003c/p>\n\u003cp>\u003ca href=\"http://www.vanityfair.com/news/2016/05/elizabeth-holmes-theranos-class-action-lawsuit\">The Verge\u003c/a> says Theranos spokeswoman Brooke Buchanan issued the same response to today's lawsuit as she did to yesterday's: “The lawsuit filed today against Theranos is without merit. The company will vigorously defend itself against these claims.”\u003c/p>\n\u003cp>Whether any patients have been truly harmed by decisions they or their doctors made based on inaccurate Theranos results is not yet known. The Wall Street Journal has\u003ca href=\"http://www.wsj.com/articles/theranos-voids-two-years-of-edison-blood-test-results-1463616976\"> reported\u003c/a> that one physician who received a corrected report said she'd unnecessarily sent a patient to the ER based on abnormally high test results.\u003c/p>\n\u003cp>Also of note for Theranos watchers: The Wall Street Journal Wednesday \u003ca href=\"http://www.wsj.com/articles/craving-growth-walgreens-dismissed-its-doubts-about-theranos-1464207285\">recounted the history\u003c/a> of the company's partnership with Walgreens, which allowed for the opening of dozens of Theranos centers inside the drugstore chain's Arizona stores. The story suggests Walgreens, in its eagerness to expand into next-wave health care, did less than due diligence in vetting Theranos.\u003c/p>\n\u003cp>\u003cstrong>Original post: Theranos, From All Angles\u003c/strong>\u003c/p>\n\u003cp>Think fast:\u003c/p>\n\u003cp>Charlize Theron or Scarlett Johannson as Elizabeth Holmes in \"Theranos: The Movie\"?\u003c/p>\n\u003cp>There's a lot of drama here, as business stories go. Is the company going to be definitively exposed as the Enron of biotech startups? Or will it be vindicated as a misunderstood and unfairly persecuted innovator that, well, made a few mistakes.\u003c/p>\n\u003cp>If the former, you get the sense only a talent on a par with \u003ca href=\"http://www.theatlantic.com/magazine/archive/2008/01/the-angriest-man-in-television/306581/\">David Simon's\u003c/a> could coherently dramatize the shortcomings of the multiple institutions implicated in this mess. The story is compelling even without the appearance to date of the most important characters -- real-life patients who may have been harmed by Theranos' \u003ca href=\"http://ww2.kqed.org/futureofyou/2016/05/19/theranos-corrects-tens-of-thousands-of-blood-tests/\">faulty blood tests\u003c/a>.\u003c/p>\n\u003caside class=\"pullquote alignright\">\u003ca href=\"#articles\">\u003cstrong>See below for Theranos analysis from around the Web.\u003c/strong>\u003c/a>\u003c/aside>\n\u003cp>That may not be the case much longer. Last week, we saw the first report of an actual patient impacted by erroneous results issued by Theranos' California lab. The Wall Street Journal, in a \u003ca href=\"http://www.wsj.com/articles/theranos-voids-two-years-of-edison-blood-test-results-1463616976\">story\u003c/a> about thousands of blood tests Theranos now says were incorrect, reported that a physician in the Phoenix area recently received a revised report for a Theranos patient whom the doctor unnecessarily sent to the ER based on abnormally high results.\u003c/p>\n\u003cp>Nick Stockton, who in \u003ca href=\"http://www.wired.com/2016/05/theranos-inching-towards-legal-bull-issh/\">Wired\u003c/a>, Friday, wrote that Theranos \"is really testing the old adage that all press is good press,\" reported the company has left itself vulnerable to all manner of lawsuits:\u003c/p>\n\u003cblockquote>\u003cp>Many people probably made medical decisions based on those two years of voided tests. Or perhaps they wrongfully decided to forgo medical treatment for a misdiagnosed condition. “If Theranos negligently did blood tests, then someone has a right to sue,” says [UC Berkeley law professor Steven] Davidoff-Soloman. “And it looks like it might be a good case.” But so far, he says he has not seen any examples where a person has popped up and said they were adversely affected by the results from a Theranos test. So again, wait and see.\u003c/p>\n\u003cp>As an accredited lab, Theranos was available to patients through Medicare and Medicaid. “Here you have a situation where they were not just deceiving patients, but also the federal government, who is paying for those tests,” says [University of Michigan law professor Adam] Pritchard. “That is something the Department of Justice is going to be very interested in.” The DOJ itself could bring suit. And depending on what that suit entails, class action lawyers could come calling with cases of mass consumer fraud. Nightmare.\u003c/p>\u003c/blockquote>\n\u003cp>\u003cstrong>'Whatever They're Up To, I Can't Figure It Out'\u003c/strong>\u003c/p>\n\u003cp>Dr. Norman Paradis, a professor of medicine at Dartmouth who has consulted for both diagnostic startups and biomed investors, told me recently that several years ago he looked into Theranos at the request of some potential investors. He found nothing that could be assessed.\u003c/p>\n\u003caside class=\"pullquote alignright\">'Their patents — there’s nothing there. There’s nothing you look at and say, ‘Oh, I can build that.''\u003ccite>Dr. Norman Paradis, Geisel School of Medicine, Dartmouth College\u003c/cite>\u003c/aside>\n\u003cp>\"I said whatever they're up to, I can't figure it out. I didn't see it in their patents or regulatory filings. Their patents -- there's nothing there. There's nothing you look at and say, 'Oh I can build that.'\"\u003c/p>\n\u003cp>Paradis says the molecular diagnostics space is not exactly fertile ground for startups to begin with, because of the royalties due companies that have developed the antibodies indicating a particular illness or condition. Because of this, he says, it is unlikely the low-cost tests Theranos offers are breaking even.\u003c/p>\n\u003cp>\"I have seen smart business types look at this model, and they’ve said I can’t see how you make money here.\"\u003c/p>\n\u003cp>Christina Farr, in \u003ca href=\"http://www.fastcompany.com/3059230/the-theranos-scandal-is-just-the-beginning\">Fast Company\u003c/a>, writes that whatever the company's business plan, it seemed to be a nonstarter with the most prestigious biotech investing firms. \"None of the top biotech investors invested in Theranos,\" Farr wrote. \"Five of the best-regarded biotech firms—Venrock, Third Rock Ventures, Polaris, Deerfield, Versant—either didn't meet with Theranos at all or passed on the pitch. The Silicon Valley firms with health care practices, like Google Ventures and Bessemer Venture Partners, weren't swayed, either.\"\u003c/p>\n\u003cp>Dartmouth's Paradis does give the company credit for submitting over 100 tests for FDA approval, even though a \u003ca href=\"http://www.theverge.com/2015/11/17/9750048/ldt-loophole-fda-hearing-theranos-lab-tests\">legal loophole\u003c/a> regarding \"\u003ca href=\"http://www.fda.gov/medicaldevices/productsandmedicalprocedures/invitrodiagnostics/ucm407296.htm\">Laboratory Developed Tests\u003c/a>\" allows it and \u003ca href=\"http://www.theverge.com/science/2015/11/11/9706356/fda-theranos-health-diagnostics-cancer-tests-regulation-loophole-ldt\">other diagnostic startups\u003c/a> to bring these tests to market without doing so. (The FDA plans on issuing its final version of a \u003ca href=\"http://www.fda.gov/downloads/medicaldevices/deviceregulationandguidance/guidancedocuments/ucm416685.pdf\">draft plan\u003c/a> to phase in \u003ca href=\"https://www.genomeweb.com/molecular-diagnostics/fda-finalize-ldt-guidance-amid-uncertainty-number-genetic-tests-impacted\">oversight of LDTS\u003c/a> sometime this year.)\u003c/p>\n\u003cp>\"For Theranos to decide to go the FDA route does show considerable rigor on Theranos’ part,\" Paradis says. \"When they made that decision, people were not doing it that way.\"\u003c/p>\n\u003cp>Soon, we may get another key development in the story, courtesy of the U.S. government. The Centers for Medicare & Medicaid Services is still mulling whether to revoke the license of Theranos' California lab, and whether to suspend Elizabeth Holmes from involvement in the blood-testing industry for two years. If things go that way, the company still has a couple of administrative appeals available to it. And beyond that, there's always the courts.\u003c/p>\n\u003cp>Meanwhile, Theranos is \u003ca href=\"https://www.statnews.com/2016/05/19/theranos-expansion-plans/\">still hiring\u003c/a>, and Holmes is scheduled to give a presentation at a plenary session of the American Association for Clinical Chemistry's annual meeting in Philadelphia on Aug. 1. \"For the first time, Holmes will present data at a scientific conference that describes Theranos’ technologies, including small sample volume testing and finger-stick collection,\" said the press release.\u003c/p>\n\u003cp>That one should be put on pay-per-view.\u003c/p>\n\u003chr>\n\u003cp>\u003c/p>\u003c/div>","attributes":{"named":{},"numeric":[]}},{"type":"component","content":"","name":"ad","attributes":{"named":{"label":"floatright"},"numeric":["floatright"]}},{"type":"contentString","content":"\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>\u003ca id=\"articles\">\u003c/a>Below are some of the most interesting recent takes on the Theranos saga:\u003c/p>\n\u003cul>\n\u003cli>\u003ca href=\"http://www.vanityfair.com/news/2016/05/theranos-silicon-valley-media\">The Secret Culprit in the Theranos Mess\u003c/a> (Nick Bilton, Vanity Fair)\u003cbr>\n\u003cblockquote>\u003cp>(I)f you peel back all of the layers of this tale, at the center you will find one of the more insidious culprits: the Silicon Valley tech press. They embraced Holmes and her start-up with a surprising paucity of questions about the technology she had supposedly developed. They praised her as “the next Steve Jobs,” over and over (the black turtleneck didn’t hurt), until it was no longer a question, but seemingly a fact. At TechCrunch Disrupt, blogger Jon Shieber had his blood drawn onstage as he interviewed her. There were no tough questions about whether Theranos’s technology actually worked; just praise. When it seemed that the tech press had vetted Holmes, she subsequently went mainstream. She got her New Yorker profile, and her face appeared on the cover of T: The New York Times Style Magazine, among others.\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://www.businessinsider.com/why-investor-tim-draper-still-loves-theranos-2016-5\">Blood-testing 'vampires' want to take down Theranos, says investor Tim Draper\u003c/a> (Julie Bort, Business Insider)\u003cbr>\n\u003cblockquote>\u003cp>Troubled blood-testing startup Theranos still has one big, vocal fan: the guy that invested the seed money to get the company started, famed investor Tim Draper. Draper tells Business Insider that of all the startups out there, Theranos is among those he's most excited about. ... Although Draper is not listed as a board member, his take is that all of the questions about Theranos is smoke and mirrors from the established blood-testing industry that doesn't want to see itself overthrown by a one-drop-of-blood-alternative. He says he's seen this struggle many times in his investing career, how telecom companies fought Skype, taxis fought Uber, car companies fought Tesla and so on.\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://www.fastcompany.com/3059230/the-theranos-scandal-is-just-the-beginning\">The Theranos Scandal Is Just The Beginning\u003c/a> (Christina Farr, Fast Company)\u003cbr>\n\u003cblockquote>\u003cp>(A)fter we find our scapegoats, the problem will not be solved. Until we address all the factors that led to Theranos' rise and its downfall, this will happen again. Launch, hype-cycle, demise. Launch, hype-cycle, demise. Again and again. One the biggest catalysts for this cycle? Dumb money. ...The biotech funding process might be flawed, but it works well enough to smell a very large rat.\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://time.com/4299943/the-theranos-downfall-was-inevitable/\">The Theranos Downfall Was Inevitable\u003c/a> (Alice Park, Time)\u003cbr>\n\u003cblockquote>\u003cp>At issue is the secrecy with which Theranos developed and brought to market the technology and its proprietary blood-testing process from day one. Theranos did not share with outside scientists which machines the company used to perform its tests, and they wouldn’t then reveal how its technology differed from the microfluidics that other companies were using to perform similar—though less extensive—assays as Theranos’. Nor did they publish in any peer-reviewed journal any research that proved the effectiveness of their product. To do so, Holmes said, would make them lose their competitive advantage of being the first to offer such tests. When Dr. Eric Topol, director of the Scripps Translational Science Institute, had his blood drawn and tested using the system, he says, “I wasn’t allowed to see the equipment, wasn’t allowed to go near it.”\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://www.wsj.com/articles/from-lending-club-to-theranos-the-limits-of-disruption-1463161745\">From LendingClub to Theranos, the Limits of Disruption\u003c/a> (Justin Lahart, The Wall Street Journal)\u003cbr>\n\u003cblockquote>\u003cp>(E)arly critics of Theranos complained the company had published little data in peer-reviewed journals that would have helped provide insight into the quality of its tests. But innovators often see ignoring criticism as a feature, says University of Toronto economist Joshua Gans, author of a recent book on disruption. That is particularly true when the criticism comes from incumbents who, as ousted Zenefits chief Parker Conrad once complained, often cry foul and look to regulators for protection. The problem is that while critics may be protecting turf, there also may be some truth to what they say. Indeed, the norms incumbents adhere to, and the rules they play by, are often there for reasons that go beyond protecting their moats. That’s particularly true of many old-line industries, such as banking, insurance brokers and medicine, that seem ripe for new entrants.\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://ww2.kqed.org/futureofyou/2016/04/25/analysis-why-medical-lab-experts-were-always-skeptical-of-theranos/\">Analysis: Why Medical Lab Experts Were Always Skeptical of Theranos\u003c/a> (Norman A. Paradis, The Conversation)\u003cbr>\n\u003cblockquote>\u003cp>The vast majority of FDA-approved medically important laboratory tests are based on blood taken from a vein, not from the finger. ... To understand why that matters, let’s start with some simple physiology. The human body can be considered a series of compartments; the concentration of any given molecule in blood or tissue fluid may vary from one compartment to the next. A small molecule, such as glucose, can move easily between these compartments, and any bodily fluid can generally be used to test its concentration. This is why testing blood sugar with a finger prick works. But large, medically important molecules like proteins and lipids are not always found in uniform concentrations throughout the body. The composition of blood from finger pricks from the same person can vary, a problem that doesn’t happen in blood taken from a vein. When you lance a fingertip, you get both blood and tissue fluid, and this means that the concentration of molecules may be different than if the blood sample comes from a vein.\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://fivethirtyeight.com/features/theranos-is-wrong-we-dont-need-more-blood-tests/\">Theranos is Wrong: We Don't Need More Blood Tests\u003c/a> (Katherine Hobson, FiveThirtyEight)\u003cbr>\n\u003cblockquote>\u003cp>Much of the debate over the last few months has been about whether Theranos’s technology can actually do what the company has said it can. But there’s a dubious assumption at the heart of Theranos, arguably just as damning as the questions about its technology. Theranos wants us to believe that ostensibly healthy people can get healthier by having more tests. But the science suggests that is far from true.\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003cli>\u003ca href=\"http://www.natlawreview.com/article/theranos-sec-s-pursuit-unicorns-and-taking-reins-internal-controls\">Theranos, the SEC’s Pursuit of Unicorns, and Taking the Reins of Internal Controls\u003c/a> (The National Law Review)\u003cbr>\n\u003cblockquote>\u003cp>Even beyond potential misrepresentation issues, we believe the SEC may also be focused on the adequacy of internal controls at privately-held companies, potentially viewing governance and control problems as contributing factors to other issues. ...(I)n a recent speech addressing issues relating to pre-IPO companies, SEC Chair Mary Jo White noted that the SEC was looking closely at privately-held “unicorns”, even where the investors appeared to be venture capital and private equity funds. She stated that control issues were a major risk factor that could lead to opportunities to misstate financial results: “The risk of distortion and inaccuracy is amplified because start-up companies, even quite mature ones, often have far less robust internal controls and governance procedures than most public companies.”\u003c/p>\u003c/blockquote>\n\u003c/li>\n\u003c/ul>\n\n\u003c/div>\u003c/p>","attributes":{"named":{},"numeric":[]}}],"link":"/futureofyou/157362/theranos-from-all-angles","authors":["80"],"categories":["futureofyou_452","futureofyou_1","futureofyou_73"],"tags":["futureofyou_814","futureofyou_617"],"featImg":"futureofyou_148281","label":"futureofyou","isLoading":false,"hasAllInfo":true}},"programsReducer":{"possible":{"id":"possible","title":"Possible","info":"Possible is hosted by entrepreneur Reid Hoffman and writer Aria Finger. Together in Possible, Hoffman and Finger lead enlightening discussions about building a brighter collective future. 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