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:

Hematocrit
Hemoglobin
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.

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