Oct 15, the Wall Street Journal published a blockbuster piece by investigative reporter John Carreyrou raising important questions about the diagnostic startup Theranos and its young founder, Elizabeth Holmes.
Holmes is the youngest self-made woman billionaire, which aims to use new technology she helped invent to make blood tests quicker, more painless, and less expensive. Famously, Theranos’ gadgets, called Edison machines, are supposed to be able to get good results with only a drop of blood. There have been questions about how accurate Theranos’ tests are. Is going to Walgreens and getting a Theranos finger prick really the same as going to Quest Diagnostics and getting blood drawn from a vein?
Those are the kinds of questions that Carreyrou asks in the Wall Street Journal today, citing former employees of Theranos. It’s known that Theranos has started doing some tests that require using needles. But the Wall Street Journal article alleges that only 15 of Theranos’ existing tests are conducted on its Edison machines. The rest use the same machines, used by other laboratory testing companies. Worse, the WSJ alleges that Theranos is making some of the tests work by diluting drops of blood and running them through these machines. Carreyrou also talks to a doctor and a patient who got what seem to be erroneous results on a potassium test. And he alleges that Theranos skimped on testing required by the Centers for Medicare & Medicaid Services to prove that Theranos’ tests were accurate.
Theranos has issued a statement saying the Wall Street Journal story “is factually and scientifically erroneous and grounded in baseless assertions by inexperienced and disgruntled former employees and industry incumbents.” It says that it gave the Journal 1,000 pages of documents that Carreyrou did not use.
“We’re under real attack from the lab industry which is seeding all sorts of stuff about us into the press,” Holmes told me, as you can see in the video above. Wait, I said to her. A lot of the people with questions Theranos are good, thoughtful people who are not in anybody’s pocket. She doubled down: “To be clear, the commentary in the press is 100% instigated by the lab industry and it showed up in the press about us last year and it’s just been repeated. What I would say is that we’re the only laboratory company that is really focused on transparency.”
Holmes points to the fact that Theranos is doing something other companies aren’t: submitting each of its tests to the Food and Drug Administration, and that, for the one test that has been approved, for herpes simplex 1, the FDA’s full analysis is available on the Internet for anyone who wants it. If people are really interested in the accuracy of its tests, why aren’t more people talking about that?
But Holmes and Theranos need to stop blaming every question that’s asked them on a conspiracy. Of course their competitors say bad things about them. That’s what competitors do. But how many Theranos tests are conducted using Edison? How does accuracy compare to other tests? What, praytell, is factually inaccurate and erroneous in the Journal story? These are fair questions, and deserve a better answer than simply that Theranos has submitted 130 tests to the FDA (reminder: only one is approved) and that it is under attack from the laboratory industry.
Great companies aren’t paranoid about their competitors. They’re paranoid about their products, and they know that if they did everything right, their competitors can’t touch them. It’s time for Theranos to provide some answers.
