How Theranos Misled Me
And how I screwed up, too.
In a June 2014 cover story for Fortune, I helped raise to prominence the inventor-entrepreneur Elizabeth Holmes and her remarkable—I think everyone will still go along with that adjective—diagnostics company Theranos.
Fairly high up in my story there is a whopping false statement. After explaining that Theranos’s tests could be performed with a finger-stick, rather than using traditional venipuncture (a syringe in the crook of the arm), I wrote that the company “currently offers 200—and is ramping up to offer more than 1000—of the most commonly ordered blood diagnostic tests, all without the need of a syringe.”
Sixteen months later, John Carreyrou of the Wall Street Journal published a now famous front-page story containing a wide range of unflattering accusations about Theranos. Among them, he reported that one “former senior employee” had told him—in an account generally corroborated by three other former employees—that as of December 2014, the company was actually performing only about 15 finger-stick tests using its proprietary technology; the remainder were being performed using conventional, third-party analyzer machines, made by companies like Siemens—i.e., the same machines used by conventional labs like Quest Diagnostics and LabCorp.HT: Business Insider
In that Journal article, a Theranos spokesperson was quoted flatly denying the newspaper’s allegations in a blanket manner, but refusing to be specific, citing trade secrets. Notably, from my perspective, she did not say how many tests the company had, in fact, been performing by proprietary methods in December 2014.
In a longer statement issued the same day on its website, Theranos further blasted the Journal for, among other things, relying on the accounts of “anonymous, disgruntled former employees,” but still declined to state how many proprietary tests it had really been performing.
It wasn’t until a week later—on Oct. 22—that Theranos, after stonewalling and threats of legal action failed to quell the furor, offered a serious, 14-page response to the Journal article, addressing the full panoply of its accusations. Among other things the company asserted that, as of December 2014, it had in fact been performing “more than 80 of the tests on our online test menu via finger-stick,” and that all but “a few” of those “ran using proprietary technologies.” It also asserted that in the fourth quarter of 2014, 57% of all tests ordered had been performed by finger-stick.
Those figures, if accurate, would suggest that the company might well be accomplishing, as it has claimed, something genuinely innovative and beneficial to society. I should add that the company’s extremely low prices and price-transparency would also be of unquestionable benefit to society, even if the company weren’t doing anything technologically innovative. On the other hand, all these advances matter only if Theranos’s tests are also reliable, which the Journal article also cast doubt upon. In my opinion, the evidence for this was weaker than its evidence that the company was misrepresenting its accomplishments....MORE
On Dec. 18th Fortune published "Did Theranos mislead Fortune?"
And on the 20th: "Letter to the Editor: Theranos Responds"
Our June piece "Theranos: She's Young, She's Rich, Is She A Marketing Huckster?" was one of the earliest to link to credible sources who thought there was no there, there.
Theranos still has not responded to the substantive criticisms, instead going with smoke, mirrors, hand waving and changing the subject.