Imagine this, your doctors ask you to get your blood reports, and you start thinking about the big and scary injection and how that pierces your skin and sucks the blood out of you. Did you ever think that why not a small prick is enough instead of the big injections?

If your answer is yes, then let me tell you about Elizabeth Holmes who started a company “Theranos” at the age of 19 which claimed to perform 240 clinical blood tests with the just blood droplet from the prick in the finger!

She started in 2003 and with such a concept, major companies started investing in her, by 2013-2014 her product valuation was over 10billion$, she was on the cover of the Fortune 500 June edition and even some people referred her as the next Steve Jobs of the Silicon Valley. She was named "the world's youngest self-made female billionaire" by Forbes and "America's coolest billionaire" by Inc. magazine, and even made Time magazine's list of the "100 most influential people." And much more!

Forbes 2014 cover featuring Elizabeth Holmes

Now you might be wondering now if this thing exists and she was praised for this all over the magazines, why do the doctors still use the painful needles to take out so much of the blood out of us? It is because her idea had no base at all! The machines that they created to do the following test were just a concept! No machines that she claimed to be working existed! And the test reports that the patients used to receive were form the traditional machines! Surprised? Well so was I when I heard of it, so let’s dive into it and see what did really happened step by step.

 

Early Stages:

 

 Nineteen-year-old Stanford chemical and electrical engineering drop-out Elizabeth Holmes founded Theranos with the aim of revolutionizing blood testing. Using a "nanotainer" (a small device designed to draw, retain, and analyse a droplet of blood from a patient’s fingertip) and its proprietary "Edison" testing technology, Theranos claimed the device could run a multitude of tests on a patient’s physiology within minutes and at a fraction of the cost of current technology.

 

Rising Phase:

Over the next decade, Holmes managed not only to get her own Stanford professor and mentor on board, but also to attract $400 million from venture capitalists, and assemble a star-studded board that included former US Secretaries of State Henry Kissinger and George P. Shultz.

Interestingly, the company board included hardly any health care professionals

With all these good things happening with her company, the fishy thing was that she never really told to the world openly about how the machines work on such small samples. Let’s see in the next part how such a big start up crashed down

Declining Phase:

As said earlier her work was always silent and suspicious, because the machines that she claimed to be working on didn’t exist in reality and whenever someone amongst the company used to stand against her or just ask about how this thing works, she used to fire them on the spot, regardless of the position. For example: in November 2006, Henry Mosley was fired from the position of chief financial officer at Theranos after questioning the reliability of its technology and the honesty of the company. She used to write down a agreement before anyone who used to join the company, the agreement said that, the person shall never tell the world how the working of the machines are done, even when they leave the company.

Still some whistle-blowers didn’t looked think of the consequences of the breaking the agreement and stood for the right. According to the wall street journal Theranos employee accused the company of failing to report test results that raised questions about the precision of the Edison system. Such a failure could be a violation of federal rules for laboratories, the former employee said. Theranos also hasn’t disclosed publicly that it does the vast majority of its tests with traditional machines bought from companies like Siemens AG.

Whether labs buy their testing instruments or develop them internally, all are required to prove to the federal Centers for Medicare and Medicaid Services that they can produce accurate results. The process is known as proficiency testing and is administered by accredited organizations that send samples to labs several times a year.

Labs must test those samples and report back the results, which aren’t disclosed to the public. If a lab’s results are close to the average of those in a peer group, the lab receives a passing grade.

In early 2014, Theranos split some of the proficiency-testing samples it got into two pieces, according to internal emails reviewed by the Journal. One was tested with Edison machines and the other with instruments from other companies.

The two types of equipment gave different results when testing for vitamin D, two thyroid hormones and prostate cancer. The gap suggested to some employees that the Edison results were off, according to the internal emails and people familiar with the findings.

The New York State Department of Health confirmed that it got a formal complaint in April 2014 “in regard to testing practices at Theranos” and forwarded it to the Centers for Medicare and Medicaid Services.

Asked about the complaint, Theranos confirms that the Edison system produced results for several tests last year that differed from results obtained from traditional equipment.

It was John Carreyrou, twice-Pulitzer-prize-winning journalist of The Wall Street Journal who first broke the story in 2015.

from Theranos whistle-blowers, John was able to publish his report in The Wall Street Journal, revealing that Theranos was not using its own technology to run the majority of its tests due to the inefficiency of its own technology. FDA investigations ensued and all that was written in John’s report was proven correct.

In 2019, Elizabeth has been pleaded but not guilty of wire-fraud conspiracy and 10 counts of wire fraud. Which if proved convicted, can lead her to 20 years of prison.

As for now lawyers for Holmes asked the judge on 2 March to delay the start of jury selection to 31 August.

So, what do we learn from this? You can’t really get rid of the pain of the needle every time your doctor asks you for the blood report. Jokes apart, it shows us how a young lady went from being “The next Steve Jobs” to the biggest fraudster of the last decade. If you wish to read more about it, you can buy the book which is written by John Carreyrou himself, named “Bad Blood”. And also read the article from October 15^th,2015 on the wall street journal site. It was the officially the first article which shed light on this issue.