Stanford dropout Elizabeth Holmes set up biotech company Theranos and revolutionized blood tests, becoming the youngest female billionaire. Theranos claimed that their technology, which takes just a single drop of blood taken from the tip of a finger, could test for hundreds of diseases and transform global health. After investigative journalists scrutinized the company questioning the credibility of its technology, it was revealed to be a sham.
Biotech company Theranos was started in 2003 by Elizabeth Holmes, then a 19-year-old Stanford dropout with an engineering background. The firm aimed to popularize diagnostic biochemical testing outside the traditional settings of laboratories and hospitals, bringing blood testing directly to patients in locations such as pharmacies.
Ms. Holmes claimed to be empowering patients; her blood tests would help people to diagnose early disease, without having to consult a medical professional, allowing them to receive early preventative or therapeutic interventions. Not only would these tests be administered without medical professional oversight, Theranos technology aimed to run traditional blood tests with only a miniscule amount of blood, collected by a simple finger prick.
Everything was designed to be patient centered; no expertise would be needed to operate the so called “Edison machines”. This attractive concept attracted many influential investors and Theranos rose to prominence in the stock market, peaking at a net worth of US $9 billion in 2014.
Elizabeth Holmes was hailed as the next Steve Jobs, became the youngest ever billionaire and the poster child of Silicon Valley. The company was almost universally considered a smashing success by investors and media alike.
Scientist Eleftherios P. Diamandis from Mount Sinai Hospital and University Health Network, Toronto Canada learned about the Theranos phenomenon in early 2014 and decided to study its technology, business model and possible future. At that time, several investigative journalists also wrote about Theranos, criticizing its secrecy and pointing out there was no external validations of the product. Despite this, the US pharmacy giant Walgreens struck deals with Theranos in 2013 to establish “Theranos Wellness Centers” in dozens of stores across Arizona, USA.
Diamandis’ first paper published in Clinical Chemistry and Laboratory Medicine (CCLM) analyzed the Theranos technology in some detail and concluded its claims were exaggerated, since similar technology already existed in point-of-care settings 
Soon after Diamandis’ criticism, the Wall Street Journal reporters started to unveil other damaging details of the Theranos operation, accusing Theranos of delivering inaccurate results and using commercial instrumentation to test patient samples instead of their own technology.
This was the beginning of the end for Theranos: later came violations of quality assurance and other problems, prompting the intervention of government regulatory authorities who eventually took action against Theranos. In the end, Ms Holmes was prohibited from owning or operating a lab for two years while Theranos’ commercial partners broke away and sued Theranos for presenting misleading information.
In another one of their papers , the authors described the controversy surrounding the scientific presentation of Elizabeth Holmes at the Annual American Association for Clinical Chemistry (AACC) meeting in 2016. Despite being the major event of the whole meeting, product quality control accusations of Theranos reached a peak at that time. At the AACC conference, Theranos announced a change in direction to become a compact instrument company. They are yet to release any products to the market.
There are many lessons that can be learned from the Theranos incident:
1. In medicine, transparency of new technologies through publications and external evaluations is likely a better strategy than secrecy.
2. Weak health technologies are destined to fail, no matter how much marketing and other advertising may occur.
3. Misleading customers, the press and media will come back to haunt you.
4. Let the results speak for themselves; any manipulative action will likely be damaging in the future.
5. Be proactive. Hire knowledgeable advisors early; not when troubles arise.
The Theranos incident was probably the most highly publicized laboratory medicine story of all time and it can teach many lessons for the future of this discipline. The authors’ five papers in CCLM chronicle the history of the company and its rise and fall.
“Last but not least, we would like to highlight here that the Editors of the journal CCLM were brave enough to publish this series of reports despite opposition from laboratory medicine leaders who apparently had a conflict of interest with these stories (6),” stated the authors.
Read the original articles here:
1. Diamandis Theranos phenomenon: promises and fallacies – part 1, Clin Chem Lab Med. 2015;53:989-93.
2. Li M, Diamandis Theranos phenomenon – part 2. Clin Chem Lab Med. 2015;53:1911-2.
3. Li M, Diamandis Theranos phenomenon–part 3. Clin Chem Lab Med. 2016;54:e145-6.
4. Diamandis Theranos phenomenon – part 4: Theranos at an International Conference. Clin Chem Lab Med. 2016;54:e243-4.
5. Diamandis EP, Plebani M. Theranos phenomenon – Part 5: Theranos’ presentation at the American Association for Clinical Chemistry Annual Conference 2016. Clin Chem Lab Med. 2016;54:e313-4.
6. Lackner KJ, Gillery P, Lippi G, Melichar B, Schlattmann P, Tate JR, Plebani M. The Theranos phenomenon, scientific transparency and freedom of speech. Clin Chem Lab Med. 2016;54:1403-5.