The story we linked to in June's "Theranos: She's Young, She's Rich, Is She A Marketing Huckster?" was based on the thinking of one of the heavyweights of laboratory diagnostics, Dr. Dr. Eleftherios P. Diamandis*, who was dubious.
That post was one of our least read.Funny how stuff works out.
From the Wall Street Journal:
Silicon Valley lab, led by Elizabeth Holmes, is valued at $9 billion but isn’t using its technology for all the tests it offers
On Theranos Inc.’s website, company founder Elizabeth Holmesholds up a tiny vial to show how the startup’s “breakthrough advancements have made it possible to quickly process the full range of laboratory tests from a few drops of blood.”
The company offers more than 240 tests, ranging from cholesterol to cancer. It claims its technology can work with just a finger prick. Investors have poured more than $400 million into Theranos,valuing it at $9 billion and her majority stake at more than half that. The 31-year-old Ms. Holmes’s bold talk and black turtlenecks draw comparisons to Apple cofounder Steve Jobs.
But Theranos has struggled behind the scenes to turn the excitement over its technology into reality. At the end of 2014, the lab instrument developed as the linchpin of its strategy handled just a small fraction of the tests then sold to consumers, according to four former employees.
One former senior employee says Theranos was routinely using the device, named Edison after the prolific inventor, for only 15 tests in December 2014. Some employees were leery about the machine’s accuracy, according to the former employees and emails reviewed by The Wall Street Journal.
In a complaint to regulators, one Theranos employee accused the company of failing to report test results that raised questions about the precision of the Edison system. Such a failure could be a violation of federal rules for laboratories, the former employee said.
Theranos also hasn’t disclosed publicly that it does the vast majority of its tests with traditional machines bought from companies likeSiemens.
The Palo Alto, Calif., company says it abides by all applicable federal lab regulations and hasn’t exaggerated its achievements. It disputes that its device could do just 15 tests, declining to say how many tests it now handles or to respond to some questions about its lab procedures, citing “trade secrets.”
But Theranos’s outside lawyer, David Boies, acknowledges that the company isn’t yet using the device for all the tests Theranos offers. The transition to doing every test with the device is “a journey,” he says.
Asked about the claim on the company’s website, Mr. Boies replied that using the device for the “full range” of blood tests is a goal Theranos will eventually achieve.
Theranos points out that it has publicly disclosed doing “certain esoteric and less commonly ordered tests” with traditional machines on blood drawn with smaller needles from veins.*He gets the double Doc for his M.D. PhD.
During the Journal’s reporting, Theranos deleted a sentence on its website that said: “Many of our tests require only a few drops of blood.” It also dropped a reference to collecting “usually only three tiny micro-vials” per sample, “instead of the usual six or more large ones.” Heather King, the company’s general counsel, says the changes were made for “marketing accuracy.”...MORE
HT on the Journal story: WaPo Wonkblog's "The wildly hyped $9 billion blood test company that no one really understands".
Elizabeth Holmes is not happy. From Business Insider (I can't determine whether they are or are not in the bag for the founder):
Founder of $9 billion dollar startup Theranos fires back at WSJ report: 'How disappointing. Full of falsehoods'
Theranos, the $9 billion biotech startup that claims to have a new approach to blood testing, came under fire on Wednesday when the Wall Street Journal published an incendiary investigative report about the company and its technology.
Theranos wants to conduct blood tests for health issues through a single finger stick rather than by having to draw vials of blood in a doctor's office. Its goal is to make clinical testing cheaper and faster.
The Journal's report alleges Theranos is struggling to make its 'revolutionary' in-house technology actually work, and reports that only about 10% of Theranos' blood tests use its technology, with the rest of the tests being carried out using traditional blood-testing tech. Even the company's own employees have concerns about Theranos' blood tests.
The Journal appears to have made every effort to get Theranos to comment on its five-month reporting. Holmes did not speak with the Journal for the story.But the company struck back against the Journal's report with a lengthy statement released shortly after the WSJ's story was published.
"Today’s Wall Street Journal story about Theranos is factually and scientifically erroneous and grounded in baseless assertions by inexperienced and disgruntled former employees and industry incumbents. Theranos presented the facts to this reporter to prove the accuracy and reliability of its tests and to directly refute these false allegations, including through over 1,000 pages of statements and documents," according to the statement.
"Disappointingly, the Journal chose to publish this article without even mentioning the facts Theranos shared that disproved the many falsehoods in the article."
Elizabeth Holmes, the founder of Theranos, has also been tweeting about the Journal's story. She responded to one software developer's tweet, saying that Theranos offered to show the Journal its technology and they "declined."...MOREPreviously:
Why Are So Many Political Heavyweights On the Board of Theranos?