After Theranos

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Author: Emily Waltz
Date: Jan. 2017
From: Nature Biotechnology(Vol. 35, Issue 1)
Publisher: Nature Publishing Group
Document Type: Article
Length: 4,809 words
Lexile Measure: 1330L

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Author(s): Emily Waltz [1]

Imagine doing a raft of diagnostic tests from a finger prick of blood. This was the dream sold by billion-dollar blood-testing startup Theranos. The company claimed it could run over 200 tests on a few drops of blood, while the rest of the field was plodding along on only a few dozen such tests. Unfortunately, Theranos' claim turned out to be just that--a pipe dream.[illus. 1]

The debacle, which came to a head in late 2015 with the US Centers for Medicare and Medicaid Services (CMS) censuring Theranos, has heightened skepticism around the field of small-volume blood diagnostics, particularly products aimed at consumers. But the idea of recentering diagnostics on people, rather than using the widespread centralized diagnostic laboratory model, continues to gain traction. Investors are pumping money into startups chasing the holy grail of finger-prick diagnostics, and big players keep on acquiring innovators in the space. In November, San Diego-based Genalyte secured $36 million in financing for its blood-drop diagnostics; two months earlier, multinational Danaher announced the acquisition of Sunnyvale, California, diagnostics developer Cepheid. These are but the latest commercial players to chase the decades-long goal of measuring clinically relevant markers in a drop of blood.


Theranos founder Elizabeth Holmes, a well-connected 19-year-old Stanford University drop-out, claimed her company, launched in 2003, could do practically any diagnostic test on a few drops of blood from a finger prick. Yet while the company grew to a valuation of $9 billion, courting breathless media coverage and TED talks, skepticism grew at the company's refusal to disclose details on how its platform worked. "They never shared their data with the scientific community," says Ralph Weissleder, director of the center for systems biology at Massachusetts General Hospital in Boston. "They were extremely evasive." Members of the research community grew increasingly suspicious, as did Theranos' own employees.

In October 2015, an investigative report in the Wall Street Journal dropped the bombshell that many of Theranos' tests were being run on commercial machines from other companies, rather than its own 'Edison' platform. The investigation revealed that blood samples were likely being diluted to meet the specs of those instruments, leading to errors, the newspaper reported. The next month, the CMS inspected Theranos' laboratory in Newark, California, and found numerous deficiencies, some of which posed "immediate jeopardy to patient health and safety," CMS said in a letter to the company ([Box 1]).

The agency banned Holmes from running a laboratory for two years. Walgreens, which was hosting dozens of Theranos blood-draw sites in Arizona, severed its relationship with the company, shuttered the sites, and in November sued the company. Theranos now faces multiple fraud lawsuits, along with investigations by federal prosecutors and the US Securities and Exchange Commission.


The debacle cast a shadow over the entire field of small-volume blood diagnostics. "[Now] when I talk to people there's always a great deal of skepticism," says Cary Gunn, CEO and founder of Genalyte. "I get asked the question, How are you...

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Gale Document Number: GALE|A478856990