Tag Archives: Theranos

Theranos: The Cards Fall

With recent news of Theranos voiding test results, and other revelations, there is now a definite possibility Theranos has been mortally wounded and that my earlier optimism may have been misplaced. But now even accusations of ‘fraud’ are being thrown around, and I think that’s where the line needs to be drawn.

From zr0h3dge: http://www.zerohedge.com/news/2016-05-18/elizabeth-holmes-admits-theranos-technolgy-fraud-restates-voids-years-test-results

And Seeking Alpha, or as some call Seeking Losses:

What Investors Can Learn From The Theranos Fraud

Hmmm..I’m not a lawyer, but I’m pretty sure intent to defraud (bad faith) can only be proven in a criminal court, not in an online opinion piece.

Mistakes and failures are an unavoidable part of capitalism, and is failure in itself is not proof of fraud. Fraud involves a deliberate, malicious intent to deceive investors, customers, and other entities. Attributing mistakes and misfortune to fraud can have consequences such as dissuading capitalism, for fear of being libeled if things go wrong. The left does not understand this.

The zr0h3dge one is even worse because it’s apparent ‘Tyler Durden’, who in playing the holiness card has some skeletons of his own in his closet, doesn’t even know what Theranos does:

In the process of commiting fraud and building up her valuation, Holmes repeatedly gambled with people’s lives, sending them clearly wrong results. As a result some patients have received erroneous results that might have thrown off health decisions made with their doctors, the WSJ reports. All this is needed is one death and there is a criminal case.

In other words, Theranos may have put as many as 890,000 lives per year in jeopardy with its fake technology.

The good news, this is now officially game over for if not Elizabeth Holmes, then certainly her company:

Talk about hyperbole. Theranos only offered basic blood panels and tests for Herpes Simplex 1. Theranos tests were never intended or marketed for life or death situations. The FDA does regulate, for example, the accuracy of glucose meters, but Theranos never offered such tests. Someone whose life hinges on test results would not use Theranos; they would go to a hospital or use FDA-cleared test kits. It would be very difficult to prove in a criminal court that Theranos test results endangered lives. More likely it would go to a civil court.

From Wired:

The bigger threat comes from consumers. Many people probably made medical decisions based on those two years of voided tests. Or perhaps they wrongfully decided to forgo medical treatment for a misdiagnosed condition. “If Theranos negligently did blood tests, then someone has a right to sue,” says Davidoff-Soloman. “And it looks like it might be a good case.” But so far, he says he has not seen any examples where a person has popped up and said they were adversely affected by the results from a Theranos test. So again, wait and see.

Also voiding test results not not prove fraud or that the test results are egregiously wrong, as no blood test is 100% accurate. If Theranos was promoting these tests to symptomatic people of a possible life-threatening condition, then perhaps there is a case if Theranos was egregiously inflating the accuracy of these tests. Like if someone was extremely fatigued, had petechiae, and then took a WBC Theranos test that came back normal, only to be later diagnosed with Leukemia. But in such a circumstances, most people would go to the emergency room or primary care physician, who would order tests using conventional technology.


…and outsourcing 94% to companies whose products actually worked and many of whom likely had a far lower valuation than the one at which a bunch of idiot billionaires “valued” Holmes’ worthless company.

Hmm yet those ‘idiots’ are billionaires and you’re not. Venture capitalists understand there is a non-zero risk that that their investment may, due to unforeseen circumstances, become worthless. The most spectacular implosion I can recall is Myspace, which went from being worth $5-10 billion in the Spring of 2007 to being nearly worthless by early 2009. That’s the risk associated with venture capitalism.

I mean, I guess there is a possibility of fraud, but imho it’s still too early to know.

Theranos, Part 2

part 1

From iSteve (STEVE SAILER) Theranos: The Elizabeth Holmes Reality Distortion Field

Another thing people have to realize about Theranos and other high-valued startups, these companies are funded by wealthy investors who are aware of the risks. They don’t need pundits lecturing them about the inherent risks of investing in hot startups. Everyone wants to play the nanny or the ‘I told you so’ game. It’s like going to the high roller table at MGM Grand and screaming at the gamblers there that the ‘expected value on baccarat is negative!’ Yeah, they know that, but enjoy playing anyway (though VC typically has a positive expected return).

Although there is a lot of hype, some of it is justified when you consider the enormous potential for savings using Theranos’ tests. According to the New Yorker, ‘a typical lab test for cholesterol can cost fifty dollars or more; the Theranos test at Walgreens costs two dollars and ninety-nine cents’, although the expansion of the partnership has been suspended in light of recent bad press.

More doubt: Theranos Trouble: A First Person Account

After two failed attempts to establish a Theranos account, I gain access to my numbers:

— Platelets: 430, given my condition, that’s high
— Hematocrit: 44.1, a passing grade, but uncomfortably close to the 45% limit

Stanford Hematology disagrees:

— Platelets: 320, no concerns, come back in two or three months
— Hematocrit: 41.1, ditto

However, the Theranos site for the CBC has 6 sub-tests:

Platelets, Automated
RBC Automated
WBC Automated
WBC Count, Automated Differential

A ‘complete blood count’ has at least ten sub-tests, not just the two (Platelet, Hematocrit) he listed. If he can’t list all of the items instead of the two examples he cherry picked, how can we trust his story? He’s probably omitting stuff. A CBC with only two results is by definition not a CBC. No hospital would run a CBC on only two items.

A normal platelet count is between 150-400, which his results fall within. Although the there is a large discrepancy between the Stanford platelet test and the Theranos results, that doesn’t mean discrepancies won’t exist for other testing methods and other hospitals. Certain tests work better with small blood volumes than others. Blood glucose levels can be reliably tested with a pinprick of blood using a home test kit, although the discrepancy is somewhat worse than under a controlled hospital setting, which is not too surprising.. Beyond the herpes test, which they have received FDA clearance for, Theranos has 120 tests in the works, and getting FDA clearance on maybe a dozen of them would be huge progress.

Theranos was founded in 2003; it took over a decade for Theranos to develop its proprietary testing machines and get its first FDA approval (for the herpes simplex 1 virus test). The media is treating this like a horse race, and don’t understand that biotech and healthcare, as an industry, is very slow – it takes many years and lot of money to get things going. This is because of regulation (human lives are at stake), high costs (lab equipment, computer simulations, employees, clinical trials, etc), and the innate complexity of human biology. It’s not like an app where you have have it coded in a month.

Giving Theranos the benefit of the doubt

From Social Matter Desperately Seeking Susan Jobs

My opinion is somewhat different. Keep in mind, the women SJWs tend to promote have zero redeeming qualities – think Sandra Fluke, Sandra Bland, Mattress Girl. Elizabeth Holmes, along with her accomplices, created this company that seems successful (it’s herpes simplex 1 virus test received FDA clearance), even though there is some warranted skepticism. Part of the skepticism arises from confusion about Theranos’ business model, which is not as much at the mercy of the FDA as some may assume, due to a loophole that allows Theranos to bypass the FDA:

In a profile in the New Yorker last December, Theranos revealed its plans to seek regulatory clearance, despite the fact that currently diagnostic labs are under no obligation to do so. This is something of a regulatory loophole; most diagnostic labs buy their equipment from companies like Siemens or Roche, and those vendors do need to get clearance to sell their devices. But Theranos manufactures its technology and uses it in-house, so it doesn’t actually require clearance. The FDA is considering a change to these rules, and even though Theranos has benefitted from the loophole so far, Holmes submitted a comment to the FDA encouraging them to require all testing labs to submit to review.

Class I medical-exempt devices, such as the blood tests developed by Theranos, may exempt from the FDA because Theranos uses their own labs to test the samples – as opposed to selling testing equipment. Theranos’ blood tests may have been marketed as ‘class 2′ devices (which when sold require FDA approval), which is why the FDA got involved, but that doesn’t prove the blood tests don’t work or that Theranos won’t eventually get clearance to market these as ‘class 2′ devices. In July, 2015, Theranos’ herpes blood test received FDA clearance, so that bodes well for future tests.

At the very worst, the blood tests don’t work as well as originally hoped, investors loose faith, and the company is liquidated at a large loss.

There is still a lot we don’t know, and it’s too soon to call Theranos a failure. The loss of the Safeway partnership and halting of the Walgreens partnership is a setback but not a mortal blow. My prediction is they will get through this.

Of course, the NYT trashed Theranos. The paper also trashed Tesla back in 2013.

The author of the hit piece, JAMES B. STEWART, omits the fact that Theranos is actually sending documents to the FDA. Theranos isn’t trying to evade peer review. Theranos plans to get FDA approval for up to 120 tests, even though such approval may not be necessary due to the loophole. From Forbes:

When critics say that Theranos should publish more data, Holmes responds that she is doing something better: getting approval from the Food and Drug Administration for 120 different Theranos tests. This is not standard practice in the industry.

Many blood tests are actually not FDA approved, because tests that are developed by the lab that uses them have been exempt from many regulations. Holmes argues that FDA approval is a much higher hurdle than simply publishing in a medical journal. It’s great that Theranos is doing this.


But the FDA has just made public its decision letter to Theranos and a far more detailed memo around the agency’s thinking. The 29-page memo doesn’t explain how the Theranos system works, but does compare samples on the existing technology and using Theranos’ new technology. Not only are the test results substantially the same, but Theranos’ device is able to replace a blood draw with just a drop of blood, as advertised.

Whether it’s Tesla, Uber, Theranos, or or any other successful start-up, the left are like bloodhounds drawn to the scent of failure of the successful, even when such failure does not actually exist. The liberal media is so desperate for the successful to fail that they have to make stuff up, turning molehills into mountains.