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Theranos
Theranos was a failed blood analysis company that became notorious for gaining a $10 billion valuation without actually having proven, functional technology.
Theranos was founded by entrepreneur Elizabeth Holmes. Its name is a combination of therapy and diagnosis. Holmes founded the company in 2003, dropping out of Stanford University as a sophomore to do so.
The company announced that it would leave the clinical laboratory business in 2016 after becoming the target of a major expose by the Wall Street Journal, CMS sanctions, and numerous lawsuits. Theranos was ultimately dissolved in 2018 by David Taylor, its CEO at the time.
Theranos claimed it could perform hundreds of laboratory tests using a finger-stick collection and a micro-specimen vial instead of a needle and several vacutainers of blood. The company said it could return results in four hours for about half of the typical Medicare Part B lab test fees. This would have been exponentially less painful, faster, and cheaper than conventional blood testing performed by clinical laboratories. Theranos partnered with Walgreens in late 2013, with 41 Walgreens testing centers participating in this partnership at one point.
Theranos problems began with an in-depth investigative report by The Wall Street Journal in October 2015. This report was the result of information provided by whistleblowers whose concerns were ignored by both Holmes and Theranos’s President and Chief Operating Officer, Ramesh “Sunny” Balwani.
The Journal’s report revealed aspects of Theranos that the secretive company had kept from public view. Based on interviews with several employees and others with knowledge of events at Theranos, the Journal disclosed that the company ran only a handful of tests using its proprietary technology, relying on traditional testing for most of its specimen work. Following this exposé, Theranos quickly lost its role as the darling of the media and Silicon Valley.
In July 2016, the U.S. Centers for Medicare and Medicaid Services applied the most stringent sanctions it could to Theranos for problems it reported at the company’s lab in Newark, Calif., including a two-year prohibition on Holmes owning any CLIA-certified lab.
As a result of in-depth investigations, the U.S. Security and Exchange Commission (SEC) filed charges on March 14, 2018, stating that Theranos, Holmes, and Balwani allegedly raised more than $700 million from investors through an elaborate, years-long scheme that involved exaggerating or making false statements about the company’s technology, business, and financial performance.
To settle the SEC’s charges, Holmes agreed to pay a $500,000 fine and to surrender almost 19 million shares of Theranos stock and voting control of the company, the SEC said. Also, she was barred from running a public company for 10 years. At the time, Holmes did not admit to nor deny the charges. Balwani said he would contest the charges.
Three months later, the federal U.S. Department of Justice filed indictments against Holmes and Balwani.
Holmes’ trial was delayed multiple times due to the COVID-19 pandemic and her pregnancy. On January 3, 2022, Holmes was found guilty on three counts of defrauding investors and one count of wire fraud. She is scheduled to be sentenced in September 2022.
Balwani’s trial concluded on July 7, 2022, with him being found guilty on two counts of conspiracy and ten counts of wire fraud. Balwani is scheduled to be sentenced in November 2022.
What will the future hold for Theranos?
This is an excerpt from a 1,900-word article in the July 25 issue of THE DARK REPORT. The complete article is available to paid members of the Dark Intelligence Group. …
July 5, 2016 Intelligence: Late Breaking Lab News
More developments have happened at Theranos, Inc., the beleaguered clinical lab company based in Palo Alto, California. On June 24, Brook Buchanan, Vice President of Communications at Theranos, resigned, giving personal reasons for the decision. Buchanan was hired in November 2015, …
Why Theranos Is a Big Test for CMS and CLIA
OFFICIALS AT THE FEDERAL CENTERS FOR MEDICARE & MEDICAID SERVICES are at what may be the most important crossroads in the history of clinical laboratory regulation since Congress passed the CLIA 1988 legislation. Will CMS pursue the severe sanctions it disclosed to Theranos, Inc.,…
Walgreens Tells Theranos: ‘Lab Deal Is Terminated’
BREAKING NEWS: As this issue of THE DARK REPORT went to press, it was learned that Walgreens had announced the termination of its lab testing agreement with Theranos, effective immediately. Theranos loses access to about 40 Walgreens pharmacies in Phoe…
Up to 30,000 Theranos test results voided; Walgreen dumps partnership
This is an excerpt from a 1,000-word article in the June 13 issue of THE DARK REPORT. The original article is available to paid members of the Dark Intelligence Group. …
Do Regulators Really Protect Patients, Consumers?
IMAGINE, FOR A MOMENT, THAT ONE OF YOUR LOVED ONES had gone to Theranos during the past two years to get lab tests. Assume that your loved one was being tested for significant biomarkers that directly affected the care provided to your family member for significant health issues and that your loved o…
Is Theranos Kowtowing To CMS over Pending CLIA Sanctions?
CEO SUMMARY: Having ignored the profession of laboratory medicine for nearly all of its 13-year corporate life, Theranos suddenly began engaging with expert laboratorians last month. The timing of this new outreach coincides with public disclosure that CMS proposed the severest sanctions …
Theranos CEO Elizabeth Holmes to Show Scientific Data at AACC Conference
CEO SUMMARY: Theranos Founder and CEO Elizabeth Holmes will be in Philadelphia to present to the American Association of Clinical Chemistry (AACC) data about the technology developed at Theranos. Conference organizers said Holmes would answer ques- tions to clarify the science, accuracy, …
AACC reveals details of its invitation to Theranos CEO
This is an excerpt from a 925-word article in the May 23 issue of THE DARK REPORT. The complete article is available to paid members of the Dark Intelligence Group. …
Theranos in the News, for Better and Worse
IT’S BEEN AN EVENTFUL COUPLE OF MONTHS for Theranos, the lab testing company that says its goal is to disrupt the clinical laboratory industry. Novelists cannot write fiction as compelling as the unfolding real story about this controversial company. During March and April, The Wall Street Jou…
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