AMONG THE BEST-KEPT SECRETS at Theranos during its glory days of 2013, 2014, and 2015—when the news media hailed now-disgraced founder and ex-CEO Elizabeth Holmes as a business genius to match Apple founder Steve Jobs—was the actual revenue the company was generating from its clinical laboratory testing activities.
No less a respected business magazine than Fortune was happy to put Holmes on its front cover in June 2015 and tell readers that her laboratory testing company was valued at $9 billion and that her personal net worth was $4.5 billion, making her one of the richest women on the planet.
In recent weeks, however, during the federal criminal trial of Holmes now unfolding in San Jose, Calif., details about the company’s true revenue in 2015 were presented in documents and testimony.
Theranos Lost $585 Million!
“Evidence presented at the trial also revealed that Holmes had distributed financial projections calling for privatey-held Theranos to generate $140 million in revenue in 2014 and $990 million in revenue in 2015 while also turning a profit,” the Associated Press reported, adding that “a copy of Theranos’ 2015 tax return presented as part of the trial evidence showed the company had revenues of less than $500,000 that year while reporting accumulated losses of $585 million.”
As it reported to the government on its tax return for 2015, Theranos lost more than half a billion dollars while failing to generate even $1 million in revenue!
I have some insight to add to this fact. During 2014 and 2015, I went to multiple Walgreens retail pharmacies in Palo Alto, Calif., and Phoenix where Theranos operated patient service centers. On each of these visits, multiple tests were ordered and two things were consistent:
- Not once was my blood sample collected by the use of Theranos’ much- ballyhood “finger stick” (capillary) procedure. Instead, during each visit, all of my blood samples were collected by standard venous blood collection in multiple, full-sized vacutainer tubes.
- On multiple visits, I used my health insurance card to pay for the tests ordered on that visit, thus avoiding an up-front cash payment. My health insurer plan was never billed by Theranos for these tests. Effectively, Theranos tested me at no charge.
Moreover, on one visit in 2014, I ordered a qualitative RNA test as a challenge and paid $9.43 for this test. When the results were reported, it was ARUP Laboratories that performed that test. An ARUP manager told me that Theranos probably paid about $75 to ARUP for that test, although Theranos charged me less than $10.
For some of you who remember radio broadcaster Paul Harvey, sharing my Theranos lab testing experience with you allows me to say, “And now you know … the rest of the story!”