The death of Theranos has been long coming ever since the WSJ’ John Carreyrou did a phenomenal job, starting about one year ago, of exposing the fraud that is Clinton Global Initiative-darling Elizabeth Holmes, but as of this evening it is largely official. In an “open letter” just posted on the company’s website, Holmes said Theranos would shut down its blood-testing clinical labs and fire 340 of approximately 790 full time employees, roughly 40% of its entire workforce.
As the WSJ, whose story this has been from day one writes, “the moves mark a dramatic retreat by the Palo Alto company and founder Elizabeth Holmes from their core strategy of offering a long menu of low-price blood tests directly to consumers. Those ambitions already were endangered by crippling regulatory sanctions that followed revelations by The Wall Street Journal of shortcomings in Theranos’s technology and operations.”
Still, while Theranos’ official closure, and still long-overdue criminal raid, should have taken place long ago (we wonder if Holmes’ proximity to the Clinton Foundation may be a mitigating factor) in a testament to just how much dumb money there really is, the company will still continue to operate, even if under a severely scaled down, “post-pivot” business model. As Holmes writes, “we will return our undivided attention to our miniLab platform. Our ultimate goal is to commercialize miniaturized, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, pediatrics, and intensive care.”
Holmes announced in August a new blood-testing device called miniLab, which is about the size of a printer but hasn’t been approved by regulators. The shutdowns and layoffs could help the closely held company minimize its cash burn in its attempt to accelerate the development of products that could be sold to outside laboratories, although it is unclear who would want to buy them.
Her full – and perhaps final – letter is below:
For our stakeholders,
After many months spent assessing our strengths and addressing our weaknesses, we have moved to structure our company around the model best aligned with our core values and mission.
We have decided to close our clinical labs and Theranos Wellness Centers, which will impact approximately 340 employees in Arizona, California, and Pennsylvania. We are profoundly grateful to these team members, many of whom have devoted years to Theranos and our mission, for their commitment to our company and our guests.
We will return our undivided attention to our miniLab platform. Our ultimate goal is to commercialize miniaturized, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, pediatrics, and intensive care.
We have a new executive team leading our work toward obtaining FDA clearances, building commercial partnerships, and pursuing publications in scientific journals.
We are fortunate to have supporters and investors who believe deeply in our mission of affordable, less invasive lab testing, and to have the runway to realize our vision.
I look forward to sharing more with you as we progress along the way.
Sincerely,
Elizabeth Holmes
According to the WSJ, a retreat from the strategy that won the company a valuation of $9 billion in 2014 could make it less complicated for Ms. Holmes, to keep running Theranos as chief executive if the a ban sought by regulators to prevent her from owning any lab for two years is imposed. She also controls a majority voting stake in the company and can’t be easily removed from her position, according to people familiar with the matter.
As for the new product, we doubt it will get a billion, or even a million dollar valuation: “The miniLab was unveiled at a conference of lab scientists, and Ms. Holmes said it could run accurate tests from a few drops of blood. Theranos sought emergency clearance of Zika-virus blood test but then withdrew its request after federal regulators found that the company didn’t include proper patient safeguards in a study of the new test.”
Oops.
But while Holmes downfall, while fascinating, was predictable the far bigger question is how she managed to get to the top in the first place. The answer: a relent barrage of sycophants, paving her way from day one, instead of asking probing questions for some reason we hope to uncover one day. Here is a sample of everyone in the press who probably should be fired, 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.”
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.”
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.”
November 13, 2013.
“One Small Ow-eee.”
PediaBlog. By Ned Ketyer MD. Here.
November 18, 2013
“Creative disruption? She’s 29 and Set to Reboot Lab Medicine.”
February 18, 2014
“This Woman Invented a Way to Run 30 Lab Tests on Only One Drop of Blood.”
February 28, 2014
“Stanford Dropout Revolutionizes Blood Tests”
June, 2014
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).
June 12, 2014
“This CEO is Out for Blood.”
June 17, 2014
“Elizabeth Holmes, Who Wants To Shake Up The Blood Testing Industry, Is A Billionaire At 30.”
July 2, 2014
“Bloody Amazing.”
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.”
“Theranos: Small Sample, Big Opportunity.”
Decibio [Consultancy blog]. By Eric Lakin. Here.
July 8, 2014
“Nanotainer Revolutionizes Blood Testing.” VIDEO
“Meet Elizabeth Holmes, Silicon Valley’s Latest Phenomenon”
San Jose Mercury News, by Michelle Quinn. Here.
“Theranos bringing 500 new jobs to Scottsdale’s SkySong.”
Phoenix Business Journal. By Angela Gonzales. Here. [SkySong is an ASU-affiliated tech park].
“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.”
September 8, 2014
September 8, 2014
“Elizabeth Holmes takes Theranos’ blood test to tech movers, shakers.”
“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.”
“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.”
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
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.”
December 8, 2014
Fortune/Youtube – Theranos Billionaire Founder Talks Growth. VIDEO.
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.”
February, 2015
“Top 10 Most Innovative Companies in Health Care, 2015: #7, Theranos”
February, 2015
“Vetting Theranos”
February 2, 2015.
“CEO Q&A: Craig Hall.”
February 3, 2015
“Breakthrough Branding: Theranos, with Walgreens, Revolutionizes Healthcare.”
February 3, 2015
“Will Theranos Turn the Lab Industry Upside Down?”
February 6, 2015
“Ten Things to Know about America’s Youngest Female Billionaire.”
February 5, 2015
“Disruptive Technology Main Focus at Clinton Health Conference.”
February 10, 2015
“Elizabeth Holmes – Theranos”
February 10, 2015
“Theranos CEO: Avoid Backup Plans.”
“I think that the minute that you have a backup plan, you’ve admitted that you’re not going to succeed.”
February 17, 2015
“Stealth Research: Is Biomedical Innovation Happening Outside the Peer-reviewed Literature?”
February 27, 2015
“Tech company Theranos pushes consumer lab-testing bill.”
February, 2015
“Theranos: Blood Tests that Need Just a Tiny Sample.”
March, 2015
“Secret Shoppers Disappointed by Theranos.”
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.”
March 5, 2015
“Millennials and Money: New Kids in the Forbes Billionaires Club.”
March 6, 2015
“Theranos Files Comment In Support Of Food and Drug Administration Oversight Of Laboratory-Developed Tests.”
March 7, 2015.
“Health care in America: Shock treatment. A wasteful and inefficient industry is in the throes of great disruption.”
March 9, 2015
“Theranos and Cleveland Clinic Announce Strategic Alliance to Improve Patient Care through Innovation in Testing.”
March 9, 2015
“Cleveland Clinic Taps Theranos, Bets on Cheaper Diagnostics.”
March 9, 2015.
Fox News Cleveland Clinic/Theranos Interview. VIDEO.
March 9, 2015
“Cleveland Clinic Enters ‘Long-Term Strategic Alliance’ with Theranos, Inc.”
March 9, 2015
“Elizabeth Holmes: 2015 Horatio Alger Award Winner.”
March 13, 2015
“Theranos Seeks FDA Approval for Early-detection Ebola Test: George Schultz.”
March 17, 2015
“Mark Cuban Talks Healthcare Investing: Soon Our Bodies Will Be Big Math Equations.”
“Sensors are the next opportunity,” Cuban said. He also voiced his enthusiasm for companies like 23andMe and Theranos.
March 23, 2015
“Boies Schiller Set to Open Palo Alto Outpost.”
April 7, 2015
“Patients Can Soon Get Lab Tests Without Doctors’ Orders.”
April 8, 2015
“Theranos One Step Closer to Consumerizing Health.”
April 9, 2015
“Arizona Health Law Could Boost Theranos’ Biotech Prospects.”
April 16, 2015
“Elizabeth Holmes.”
April 17, 2015.
“How Elizabeth Holmes became inspired to transform blood testing.” VIDEO
April 20, 2015
“The Doctor is Out: LabCorp to Let Consumers Order Own Tests.”
April 20, 2015
“What News at Theranos? Lab Firm Expands in AZ.”
“In Arizona, New Consumer Direct Access Law is a First Win for California-Based Theranos.”
“Theranos: Many Questions, but Very Few Answers.”
“World’s Youngest Billionaire – Another Steve Jobs?”
April 27, 2015
“Occam’s Razor and the Secrecy of Theranos. A Bunch of Crock? No.”
April 28, 2015
“Guest List, State Dinner, Prime Minister Shinzo Abe, Japan.”
May 5, 2015
“Theranos Sticks It to Critics, Plans Expansion of Lab Services.”
“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.
May 7, 2015
“Theranos Jump Starts Consumer Lab Testing.”
“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.”
May 7, 2015
“Silicon Valley Lab Testing Startup Hires Clinton Advisor.”
May 11, 2015
“Our Editor Describes Visit to Theranos Test Center.”
Sidebar: “Comparing Patient Visit with Advertised Benefits.”
May 11, 2015
“Airbnb Chesky, Theranos Holmes among presidential entrepreneurs.”
Winners met with Commerce Secretary Penny Pritzker and President Obama.
May 11, 2015
“Elizabeth Holmes on Joining the Presidential Ambassadors for Global Entrepreneurship Initiative.”
June 2, 2015.
Elizabeth Holmes: Charlie Rose. VIDEO.
June, 2015
“Collecting More Dollars From Patients: Why It’s Time For Clinical Labs and Pathology Groups to Move To The Retail Model.”
This white paper does not mention “Theranos” but covers the topic of retail access to laboratory tests.
June 19, 2015
“Personalized Technology Will Upend the Doctor-Patient Relationship.”
June 21, 2015
“The Benefits to Your Brain of a Work Uniform.”
June 22, 2015.
“With Carlos Slim, Billionaire Elizabeth Holmes Brings Innovative Blood Testing Method To Mexico.”
June 23, 2015
“Theranos’ New Deal with Billionair Carlos Slim May Take It to Another Level.”
July 2, 2015
“Controversial Multibillion-Dollar Health Startup Theranos Just Got a Huge Seal of Approval from the US Government.”
July 2, 2015
“Disruptive Diagnostics Firm Theranos Gets Boost from FDA.”
July 3, 2015
“Theranos Blood Test: The Insanely Influential Stanford Professor Who Called the Comapny Out for its ‘Stealth Research.’ “
July 24, 2015
“Biden Visits Theranos Lab as Part of Healthcare Innovation Summit”
July 24, 2015
“Theranos Pushing Direct to Consumer Blood Testing.”
July 30, 2015
“Theranos’ Holmes Marks 50th Anniversary of Medicare and Medicaid with Vision for Next 50 Years.”
August 11, 2015
“Nickles Takes On Theranos.”
August 17, 2015
“A Good Month for Blood.”
August 19-20, 2015
“Leveraging Pharmacies for Rapid Diagnostics.”
7th Annual Next Generation Diagnostics Summit (Two-Day Track on Pharmacies).
While not specific to Theranos, a two-day meeting on lab tests in the pharmacy space.
August 24, 2015
“Labcorp is Reaching Past Doctor’s Office to the Patient.”
October 5, 2015
“Elizabeth Holmes on Using Business to Change the World.”
October 6, 2015
“Self Made Billionaire on Re-inventing Blood Tests: It’s Like Cocaine.”
October 6, 2015
“How Theranos is Disrupting the Health Care Industry.”
“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.”
October 12, 2015
“Theranos’ Elizabeth Holmes Call on Women to Help Each Other.”
October 12, 2015
“CME Group Announces Elizabeth Holmes as the 2015 Melamed-Arditti Innovation Award Receipient.”
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