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Theranos Dials Back Lab Tests at FDA’s Behest

103 points by raspasov 11y ago

etep 11y ago
Thank you for linking this through google.
hkmurakami 11y ago
Previous discussion on very related article (yesterday) http://www.wsj.com/articles/theranos-has-struggled-with-blood-tests-1444881901 http://www.wsj.com/articles/theranos-has-struggled-with-bloo... "Hot Startup Theranos Has Struggled With Its Blood-Test Technology"
- gitah 11y ago
  Here's the HN discussion to go with yesterday's article: https://news.ycombinator.com/item?id=10391313 https://news.ycombinator.com/item?id=10391313 Also here is Holme's interview with Jim Cramer tonight regarding yesterday's article: http://www.cnbc.com/2015/10/15/theranos-ceo-fires-back-at-wsj-i-was-shocked.html http://www.cnbc.com/2015/10/15/theranos-ceo-fires-back-at-ws...
raspasov 11y ago
I am very curious if someone who's familiar with medical devices and different kinds of tests can explain the details of all of this.
- aheilbut 11y ago
  Nobody can, because none of the relevant data has been made available.
- OopsCriticality 11y ago
  Theranos is secretive and doesn't behave like other diagnostic testing companies, and these deviations generate controversy. Theranos have been very, very squirrelly on details about their testing platform, claiming that they need to keep them as trade secrets in order to maintain competitiveness. Ordinarily, the tests would be independently evaluated in the peer-reviewed literature, and through the literature is how scientists and physicians would assess the value of what Theranos is offering; without peer-reviewed literature, there is little to go on. Maybe it works, maybe it doesn't, only peer-reviewed literature counts so we don't know. Theranos has an unusual board of directors for a diagnostic testing company, with surprisingly little medical experience overall. Holmes herself is a college dropout—it's very hard to compete in a highly specialized and technical field without the proper knowledge base and experience, and traditionally that would be with an M.D.+fellowship or Ph.D.+postdoc. In interviews, when things get the least bit technical, Holmes sounds like she doesn't know what she's talking about. Theranos' patents, of which Holmes is a named inventor, are (IMHO) vaguely written. Could Holmes be a diagnostics savant? It's possible, but I don't see credible evidence to suggest this is the case. The popular media has hyped up the company technology a lot, but in reality microfluidics is not new to the diagnostics arena, and it remains unclear as to what exactly Theranos offers as an advancement on what others are doing. There are also many technical issues to be considered with fingersticks vs. venipuncture samples, and Theranos has never explained how they have overcome those issues other than unsubstantiated assurances that their tests match standard lab tests. There is also a fundamental problem with the entire hypothesis underlying Theranos: which I very crudely summarize as more tests = better health. That hypothesis is sophomoric and does not hold under the current thinking of evidence-based medicine. One can over test, and it has real, proven consequences towards the health of the patient in terms of invasiveness, costs, and potential risks due to unneeded procedures. Does Theranos have something unique? It's not impossible. My null hypothesis is that they do not, and until I see something in the peer-reviewed literature suggesting otherwise, I am thinking it's smoke and mirrors. Edit: All that text and I didn't directly answer your question! Consider my bloviation proof of my credentials as an academic. The earlier WSJ article raised questions about irregularities in regulatory-mandated proficiency testing, a serious allegation. My interpretation of this new, linked article is that there might be something to the allegation.
- seehafer 11y ago
  As OopsCriticality points out above, it's incredibly difficult to judge the potential of Theranos' technology because they have so far refused to perform and/or publish peer-reviewed randomized clinical data comparing themselves to the standard of care. I can add some nuance to the WSJ article as a veteran of medical devices and FDA inspections: The WSJ article quotes the inspection as a "surprise". There are only two reasons this inspection should have been a surprise to Theranos. Either in their conversations with FDA they appeared to be less-than-forthcoming, or if they were not familiar with how the FDA operated. Pre-approval inspections (i.e. you submit an application to FDA and before they make a judgment they do an inspection of your site) are very common for new technology and in some cases mandatory. When exactly they show up you don't know, but you plan for them to show up, and you expect it within a certain window of time. Theranos CEO Elizabeth Holmes has been vocal about the FDA exercising oversight over all "lab developed tests", i.e. novel testing methods developed by a laboratory for use only by that laboratory and not for sale to others. Currently, these tests are not regulated by FDA, but FDA's sister organization the Centers for Medicare and Medicaid Services (CMS), under a set of regulations called CLIA. CLIA regs are not as stringent as FDA oversight and are more about good laboratory practices as opposed to the safety and efficacy of any new technology. So, Theranos and Holmes are trying to hold themselves to a higher standard, which is admirable. The caveat with doing that is that you should be familiar with what that standard is going to be. I am suspicious that we're getting the full story from the Journal article, because I find it bizarre that no one at Theranos thought that FDA would consider their "nanotainers" a medical device: when FDA gets involved, anything that is part of a diagnostic system gets their oversight. Someone with 3 months experience in medical device regulatory could have told Theranos this.
rokhayakebe 11y ago
Isn't this only a small part of the Theranos offering? As I understood their biggest advantage is they can run many tests from one (or a few) blood drops.
- aheilbut 11y ago
  According to these reports, there is only one test that they are allowed to run on the proprietary system that is supposed to provide that advantage. All the others are being run using conventional methods.
  - rokhayakebe 11y ago
    I understand it as they can still ran all the tests they were running before using other methods to get the blood sample. The only advantage of the nanotainer was its ability to be less invasive.
    - aheilbut 11y ago
      I think the other factor was supposed to be the cost of the assays. If they're just using the same machines as everyone else to do the same tests, they have no competitive advantage.
- danso 11y ago
  I thought the main appeal was the ability to do so many tests, so cheaply, and so quickly -- and that doing it via finger prick was key. It's actually a brilliant concept for a business, the kind of thing that seems like other established players would just ignore since blood testing is already so profitable. But as I understand it, there was a high scientific bar to clear (less blood is, well, less blood to get a stable reading on -- and apparently blood from the fingertip has extra impurities compared to blood drawn from a vein)
- URSpider94 11y ago
  From yesterday's article, they are currently only capable of performing 15 tests on micro-samples, and leaked documents from employees indicate serious accuracy concerns for some of those tests. For many tests, the report stated that the way they measure micro-samples is to dilute them out and run them through regular lab equipment. Not only is it hard to see how there could be any product or IP behind this approach, it's also going to impact the accuracy and detection threshold of the test. All in all, it's hard to see what they have actually developed. They sure do have a honking huge new HQ on Page Mill Road in Palo Alto, though -- that must have cost them $50 million right there!
danso 11y ago
Wow, it's as if the WSJ anticipated that Theranos was going to respond with "the WSJ's reporting is a bunch of lies; we're passing the FDA's gold standard of quality", and so purposely held back the revelation that an "inspection was triggered by concerns the agency had about data Theranos had voluntarily submitted to the FDA" for a second-day piece. I understand PR is an exceptionally hard game when you want to be a revolutionary company, but Holmes's response so far has been shameful. Theranos's first public response last night was a tweet [1] to John McCain, Joe Biden, and Arianna Huffington linking to a puff piece of bullet points and unlabeled line charts. On Kramer's show, besides focusing on touting the relationship to the FDA, she avoided answering the most basic questions that required stating actual numbers or facts [2]. And instead of doing a point-by-point response against the WSJ's claims [3], Theranos chooses to throw a bunch of impressive sounding numbers -- ("more than 1,000 pages of statements and documents"...because volume of printed paper is in itself evidence?) in the same vague way that it has been bragging about its purportedly revolutionary technology while refusing to even name the third-parties that they claim to have audited them, even to friendly journalists [4]. It's sad, it really does sound like she hit on a worthy-billion dollar idea. And she's put in the time and energy into it for many years to see it through. But I hate the way the way her company's official response has been to kick up a cloud of meaningless data in such a way to obfuscate true accountability, hoping that most people will think "Well medicine is above my head, there's probably just no way to test their genius inventions!"...good for the WSJ for actually putting some time and thought into examining the claims while many of its respectable peers have been publishing puff pieces, even as recent as this week [5] (yes, I know the NYT's style section is not the same as its investigative team, but it doesn't seem likely the NYT had an active investigation into Theranos). [1] https://twitter.com/theranos/status/654547567426928641 https://twitter.com/theranos/status/654547567426928641 [2] http://www.inc.com/kimberly-weisul/elizabeth-holmes-refutes-wall-street-journal-story.html http://www.inc.com/kimberly-weisul/elizabeth-holmes-refutes-... [3] https://theranos.com/news/posts/statement-from-theranos https://theranos.com/news/posts/statement-from-theranos [4] http://www.newyorker.com/magazine/2014/12/15/blood-simpler http://www.newyorker.com/magazine/2014/12/15/blood-simpler [5] http://www.nytimes.com/interactive/2015/10/12/t-magazine/elizabeth-holmes-tech-visionaries-brian-chesky.html?_r=0 http://www.nytimes.com/interactive/2015/10/12/t-magazine/eli...
- 11y ago
learc83 11y ago
Everything I've heard about this company is just weird. A biotech company started by a 19 year old Stanford dropout. She didn't even finish her second year in college, so she never made it past the intro courses. I can understand a 19 year old starting a software company, but this is more like a 19 year old starting a semiconductor fab. Someone just gave a her millions of dollars and a decade to run what was basically an r&d lab with almost no relevant experience? Then the company's board is composed of 2 former Secretaries of State, a former Secretary of Defense, 2 former Senators, a retired admiral, and a retired general. They only have one currently licensed physician (who also happens to be one of the former Senators), and no current CEOs [1]. [1]. http://fortune.com/2015/10/15/theranos-board-leadership/ http://fortune.com/2015/10/15/theranos-board-leadership/
- adenadel 11y ago
  To be fair about having only one currently licensed physician, they do have Bill Foege on the board and he is a world renowned physician credited with coming up with the strategy that eradicated small pox. Just because he is retired doesn't mean he isn't still sharp. The man is brilliant and very thoughtful. The makeup of the board is pretty strange though.
  - jane_is_here 11y ago
    He is an epidemiologist. I would have expected haematologists, chemical pathologists, cytopathologists, clinical biochemists, histopathologists and other relevant specialists on the board. At the moment, there is just a trophy, retired epidemiologist.
    - encoderer 11y ago
      And a brain surgeon. But it's still strange.
- argonaut 11y ago
  You don't know what her coursework was a Stanford. She may well have skipped the intro classes. I don't think the makeup of the board is that weird. Yes, it may mean they're shady and are trying to leverage political connections as much as they can. But even if they had a great product, dealing with regulators would still be a huge problem/pain for them, and they would still ideally want a board with lots of politically influential people. There are many reasons to be wary of Theranos. I don't think the board makeup and Holmes being a dropout are among them.
smt88 11y ago
I'm very confused by this company and uBeam. Is it really possible that both companies could raise so much money without an astounding breakthrough to demonstrate to investors? Or do investors really have enough cash that they can blow a few million on companies that, if successful, should be worth many tens of billions?
- venomsnake 11y ago
  There are only 2 asset classes that yield reasonable ROI now - real estate bubbles in the mega cities and unicorns. Investors don't have a lot of choice.
  - codewithcheese 11y ago
    Imagine you took a time machine from 1900 to 2015 and could only read you statement. Fantastic! =D
- tzs 11y ago
  Is there a sound debunking of uBeam? The only one I've seen widely circulated is the one here [1] and it has problems [2]. [1] http://lookatmeimdanny.tumblr.com/post/101432017159/how-putting-10m-into-ubeam-illustrates-everything http://lookatmeimdanny.tumblr.com/post/101432017159/how-putt... [2] https://news.ycombinator.com/item?id=9984822 https://news.ycombinator.com/item?id=9984822
  - blackguardx 11y ago
    http://www.eevblog.com/forum/projects/the-ubeam-faq/ http://www.eevblog.com/forum/projects/the-ubeam-faq/
  - smt88 11y ago
    All of the uBeam debunking and de-debunking goes over my head. It all sounds convincing when I read it. I personally will probably have to wait until we get an ex-insider who blows the whistle (like Theranos) or the product just comes out.
- 11y ago
pinaceae 11y ago
i wonder if there will be an overall impact on VCs branching into non-software areas. the software-is-eating-the-world kool aid might have gotten to some heads. "disrupting" social media or ads is one thing - health, energy, etc is a whole other ballgame. being of some sort of libertarian anti-gov mindset might also create a blindspot for gov regulation and agencies. uber can skirt the rules, but you don't fuck around with the FDA.
- seehafer 11y ago
  >but you don't fuck around with the FDA As 23andMe found out the hard way.
- URSpider94 11y ago
  VC's fund pharma and medical device companies all the time. However, from what I understand from friends in the business, there is usually a very standard playbook that hinges around the FDA approval process -- your valuation is your lifetime patent value for the drug or device, de-rated by the success rate of other ventures at your stage in the process. Theranos seems to have broken that mold.
  - pinaceae 11y ago
    different VCs in biotech, not the same as the software ones we discuss here usually. isn't YC also dabbling in outlandish areas?
specialp 11y ago
I have commented on this in the past, but I have worked in the lab industry. It is very highly regulated, and what is happening now is exactly what should have been expected. The bottom line in the lab industry is you can market yourself however you want, claim whatever tech, but it is completely worthless unless you can get it FDA approved which is not easy. Suddenly a company that looks like a Kickstarter page has the valuation of companies like Quest Diagnositics. A problem here and in some investment circles is that people think every industry is ripe for disruption from some whiz kid but it is not always true. The lab industry is very competitive, and HMOs drive the margins down a lot.
- petra 11y ago
  The lab industry is not that technologically competitive, or else we would have some lab-on-chip tech deployed by now.
  - dalacv 11y ago
    well, you still have to worry about the science part.
  - refurb 11y ago
    I think you just proved the grandparent's point.
  - blackguardx 11y ago
    Lab-on-chip tech exists. It is just very expensive.
    - petra 11y ago
      Why expensive ? in theory it was supposed to greatly reduce costs.
  - specialp 11y ago
    There are tests that are done lab on chip but not everything can be done this way. Even a basic chem panel for your blood is 20 analytes. The mechanism for these tests are all different. Also the pre-testing prep for the blood is different. Some tests need whole blood with anti coagulant, some need serum spun down from whole blood, some need other treatments. This is a 50 billion dollar industry. If it was easy to prick someone's finger and run an entire comprehensive panel you better bet it is not going to be found by some teenager dropping out from college. Sure software has been done like this before, but this is hard science and engineering. If someone would have posted on HN that a college dropout without a computer engineering degree is making servers that run on 1/10th the power, people would laugh them off unless they really made one. As mentioned too cost is a big factor. It is at the point now where a basic blood panel is reimbursed at the same cost as a meal at a fast food restaurant. Even if this technology was not vaporware, it would have to be around the same price.
NN88 11y ago
I just want to SEE something. And they have nothing.
artnep 11y ago
Check out Theranos on Glassdoor starting on page 4. The insider scoop seems to be that it's a horror show.
- onedev 11y ago
  Wow, that's incredible. That's really really bad.
msravi 11y ago
Very smart. And very deceitful. WSJ called them out for fraudulently gaming proficiency testing: > 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. > Former employees say Mr. Balwani ordered lab personnel to stop using Edison machines on any of the proficiency-testing samples and report only the results from instruments bought from other companies. > The former employees say they did what they were told but were concerned that the instructions violated federal rules, which state that a lab must handle “proficiency testing samples…in the same manner as it tests patient specimens” and by “using the laboratory’s routine methods.” And they were very very careful and deceitful in their response: > The sources relied on in the article today were never in a position to understand Theranos’ technology and know nothing about the processes currently employed by the company. They were extremely careful in using the word "currently" - admitting obliquely that they'd changed their processes while making it seem that the employees didn't know what they were talking about. In reality, it appears that the former employees (and WSJ) rightly called them out for fraud, and somewhere along the way they "pivoted" to using standard techniques instead of the Edison snake-oil.
- trhway 11y ago
  >> Former employees say Mr. Balwani ordered lab personnel to stop using Edison machines on any of the proficiency-testing samples and report only the results from instruments bought from other companies. >> The former employees say they did what they were told but were concerned that the instructions violated federal rules, which state that a lab must handle “proficiency testing samples…in the same manner as it tests patient specimens” and by “using the laboratory’s routine methods.” sounds like they tried to pull Volkswagen.
jackgavigan 11y ago
I'm in two minds about this kerfuffle. On the one hand, you have a mediagenic, celebrity CEO with little relevant qualifications or experience (and a penchant for posing for photographs in Steve Jobs-style turtlenecks) who raised millions at a stratospheric valuation on the promise of revolutionising healthcare and disrupting the lab testing industry, while making lofty claims about "scientific advancement", but has ultimately failed to deliver on that promise, while appearing to erect a facade designed to conceal the fact that the service they're offering isn't all that different from the incumbents', and deflecting questions about the technology they (claim to) have developed. The suggestion that they broke federal rules by fudging proficiency-testing is the icing on the cake. On the other hand, the suggestion that they broke the rules is merely an allegation. On the topic of the company's progress towards it's stated goals, science is hard and a ten-plus-year time horizon doesn't appear unreasonable for achieving the objective Theranos is aiming for. Plus, they have successfully rolled out the HSV1 test. It's seems reasonable to expect that more will follow. I am instinctively skeptical of founders who seem to focus more on cultivating their media profile than on getting their heads down and actually delivering. There are people whose overriding motivation is maximising media exposure but who completely lack the ability to deliver what they promise. Sometimes their behaviour is down to naiveté, over-confidence, self-delusion or a deep-rooted desire for celebrity, fame or recognition (such people seem to wear the CEO "brand" in the same way that others wear Dolce & Gabbana or Prada). Othertimes, they're simply con-artists, looking to fleece gullible customers or investors. Given that Theranos has gained FDA approval for the HSV1 test, and the suggestion that they broke federal rules is unproven, I think Holmes deserves the benefit of the doubt. Her principal crime appears to be that she was a bit naive in making overly optimistic promises and embracing the celebrity CEO role, which has made her a target for schadenfreude.
- msravi 11y ago
  > Her principal crime appears to be that she was a bit naive in making overly optimistic promises and embracing the celebrity CEO role, which has made her a target for schadenfreude. And the fraud committed in gaming proficiency-testing - does she deserve the benefit of doubt in that too? Is it ok that many people at some point got back erroneous results from their lab tests because of equipment that she knew gave erroneous results?
ZanyProgrammer 11y ago
Its fascinating that Holmes has made a successful career after dropping out less than two years at Stanford, while there's a glut of biomedical researchers, and people with actual (graduate) degrees (from much less prestigious institutions than Stanford) have trouble getting jobs in the field.
- cowsandmilk 11y ago
  My theory: Her success was much more due to connections through her father than people acknowledge. She grew up all over the world due to her father's government positions in international aid. Her board is made up of prominent people involved in US foreign relations. Seemingly, these might be people her father dealt with working for the government in international aid. If you go to raise money and you have prominent people already on your board, you're likely to find success.
jerryhuang100 11y ago
it's fun to read the glassdoor reviews of Theranos: http://www.glassdoor.com/Reviews/Theranos-Reviews-E248889_P2.htm?sort.sortType=OR&sort.ascending=true&filter.employmentStatus=REGULAR&filter.employmentStatus=PART_TIME&filter.employmentStatus=UNKNOWN http://www.glassdoor.com/Reviews/Theranos-Reviews-E248889_P2...

103 points by raspasov 11y ago

etep 11y ago

Thank you for linking this through google.

Previous discussion on very related article (yesterday) http://www.wsj.com/articles/theranos-has-struggled-with-blood-tests-1444881901 http://www.wsj.com/articles/theranos-has-struggled-with-bloo... "Hot Startup Theranos Has Struggled With Its Blood-Test Technology"

gitah 11y ago
Here's the HN discussion to go with yesterday's article: https://news.ycombinator.com/item?id=10391313 https://news.ycombinator.com/item?id=10391313 Also here is Holme's interview with Jim Cramer tonight regarding yesterday's article: http://www.cnbc.com/2015/10/15/theranos-ceo-fires-back-at-wsj-i-was-shocked.html http://www.cnbc.com/2015/10/15/theranos-ceo-fires-back-at-ws...

raspasov 11y ago

I am very curious if someone who's familiar with medical devices and different kinds of tests can explain the details of all of this.

aheilbut 11y ago
Nobody can, because none of the relevant data has been made available.
OopsCriticality 11y ago
Theranos is secretive and doesn't behave like other diagnostic testing companies, and these deviations generate controversy. Theranos have been very, very squirrelly on details about their testing platform, claiming that they need to keep them as trade secrets in order to maintain competitiveness. Ordinarily, the tests would be independently evaluated in the peer-reviewed literature, and through the literature is how scientists and physicians would assess the value of what Theranos is offering; without peer-reviewed literature, there is little to go on. Maybe it works, maybe it doesn't, only peer-reviewed literature counts so we don't know. Theranos has an unusual board of directors for a diagnostic testing company, with surprisingly little medical experience overall. Holmes herself is a college dropout—it's very hard to compete in a highly specialized and technical field without the proper knowledge base and experience, and traditionally that would be with an M.D.+fellowship or Ph.D.+postdoc. In interviews, when things get the least bit technical, Holmes sounds like she doesn't know what she's talking about. Theranos' patents, of which Holmes is a named inventor, are (IMHO) vaguely written. Could Holmes be a diagnostics savant? It's possible, but I don't see credible evidence to suggest this is the case. The popular media has hyped up the company technology a lot, but in reality microfluidics is not new to the diagnostics arena, and it remains unclear as to what exactly Theranos offers as an advancement on what others are doing. There are also many technical issues to be considered with fingersticks vs. venipuncture samples, and Theranos has never explained how they have overcome those issues other than unsubstantiated assurances that their tests match standard lab tests. There is also a fundamental problem with the entire hypothesis underlying Theranos: which I very crudely summarize as more tests = better health. That hypothesis is sophomoric and does not hold under the current thinking of evidence-based medicine. One can over test, and it has real, proven consequences towards the health of the patient in terms of invasiveness, costs, and potential risks due to unneeded procedures. Does Theranos have something unique? It's not impossible. My null hypothesis is that they do not, and until I see something in the peer-reviewed literature suggesting otherwise, I am thinking it's smoke and mirrors. Edit: All that text and I didn't directly answer your question! Consider my bloviation proof of my credentials as an academic. The earlier WSJ article raised questions about irregularities in regulatory-mandated proficiency testing, a serious allegation. My interpretation of this new, linked article is that there might be something to the allegation.
seehafer 11y ago
As OopsCriticality points out above, it's incredibly difficult to judge the potential of Theranos' technology because they have so far refused to perform and/or publish peer-reviewed randomized clinical data comparing themselves to the standard of care. I can add some nuance to the WSJ article as a veteran of medical devices and FDA inspections: The WSJ article quotes the inspection as a "surprise". There are only two reasons this inspection should have been a surprise to Theranos. Either in their conversations with FDA they appeared to be less-than-forthcoming, or if they were not familiar with how the FDA operated. Pre-approval inspections (i.e. you submit an application to FDA and before they make a judgment they do an inspection of your site) are very common for new technology and in some cases mandatory. When exactly they show up you don't know, but you plan for them to show up, and you expect it within a certain window of time. Theranos CEO Elizabeth Holmes has been vocal about the FDA exercising oversight over all "lab developed tests", i.e. novel testing methods developed by a laboratory for use only by that laboratory and not for sale to others. Currently, these tests are not regulated by FDA, but FDA's sister organization the Centers for Medicare and Medicaid Services (CMS), under a set of regulations called CLIA. CLIA regs are not as stringent as FDA oversight and are more about good laboratory practices as opposed to the safety and efficacy of any new technology. So, Theranos and Holmes are trying to hold themselves to a higher standard, which is admirable. The caveat with doing that is that you should be familiar with what that standard is going to be. I am suspicious that we're getting the full story from the Journal article, because I find it bizarre that no one at Theranos thought that FDA would consider their "nanotainers" a medical device: when FDA gets involved, anything that is part of a diagnostic system gets their oversight. Someone with 3 months experience in medical device regulatory could have told Theranos this.

rokhayakebe 11y ago

Isn't this only a small part of the Theranos offering? As I understood their biggest advantage is they can run many tests from one (or a few) blood drops.

aheilbut 11y ago
According to these reports, there is only one test that they are allowed to run on the proprietary system that is supposed to provide that advantage. All the others are being run using conventional methods.
- rokhayakebe 11y ago
  I understand it as they can still ran all the tests they were running before using other methods to get the blood sample. The only advantage of the nanotainer was its ability to be less invasive.
  - aheilbut 11y ago
    I think the other factor was supposed to be the cost of the assays. If they're just using the same machines as everyone else to do the same tests, they have no competitive advantage.
danso 11y ago
I thought the main appeal was the ability to do so many tests, so cheaply, and so quickly -- and that doing it via finger prick was key. It's actually a brilliant concept for a business, the kind of thing that seems like other established players would just ignore since blood testing is already so profitable. But as I understand it, there was a high scientific bar to clear (less blood is, well, less blood to get a stable reading on -- and apparently blood from the fingertip has extra impurities compared to blood drawn from a vein)
URSpider94 11y ago
From yesterday's article, they are currently only capable of performing 15 tests on micro-samples, and leaked documents from employees indicate serious accuracy concerns for some of those tests. For many tests, the report stated that the way they measure micro-samples is to dilute them out and run them through regular lab equipment. Not only is it hard to see how there could be any product or IP behind this approach, it's also going to impact the accuracy and detection threshold of the test. All in all, it's hard to see what they have actually developed. They sure do have a honking huge new HQ on Page Mill Road in Palo Alto, though -- that must have cost them $50 million right there!

danso 11y ago

Wow, it's as if the WSJ anticipated that Theranos was going to respond with "the WSJ's reporting is a bunch of lies; we're passing the FDA's gold standard of quality", and so purposely held back the revelation that an "inspection was triggered by concerns the agency had about data Theranos had voluntarily submitted to the FDA" for a second-day piece. I understand PR is an exceptionally hard game when you want to be a revolutionary company, but Holmes's response so far has been shameful. Theranos's first public response last night was a tweet [1] to John McCain, Joe Biden, and Arianna Huffington linking to a puff piece of bullet points and unlabeled line charts. On Kramer's show, besides focusing on touting the relationship to the FDA, she avoided answering the most basic questions that required stating actual numbers or facts [2]. And instead of doing a point-by-point response against the WSJ's claims [3], Theranos chooses to throw a bunch of impressive sounding numbers -- ("more than 1,000 pages of statements and documents"...because volume of printed paper is in itself evidence?) in the same vague way that it has been bragging about its purportedly revolutionary technology while refusing to even name the third-parties that they claim to have audited them, even to friendly journalists [4]. It's sad, it really does sound like she hit on a worthy-billion dollar idea. And she's put in the time and energy into it for many years to see it through. But I hate the way the way her company's official response has been to kick up a cloud of meaningless data in such a way to obfuscate true accountability, hoping that most people will think "Well medicine is above my head, there's probably just no way to test their genius inventions!"...good for the WSJ for actually putting some time and thought into examining the claims while many of its respectable peers have been publishing puff pieces, even as recent as this week [5] (yes, I know the NYT's style section is not the same as its investigative team, but it doesn't seem likely the NYT had an active investigation into Theranos). [1] https://twitter.com/theranos/status/654547567426928641 https://twitter.com/theranos/status/654547567426928641 [2] http://www.inc.com/kimberly-weisul/elizabeth-holmes-refutes-wall-street-journal-story.html http://www.inc.com/kimberly-weisul/elizabeth-holmes-refutes-... [3] https://theranos.com/news/posts/statement-from-theranos https://theranos.com/news/posts/statement-from-theranos [4] http://www.newyorker.com/magazine/2014/12/15/blood-simpler http://www.newyorker.com/magazine/2014/12/15/blood-simpler [5] http://www.nytimes.com/interactive/2015/10/12/t-magazine/elizabeth-holmes-tech-visionaries-brian-chesky.html?_r=0 http://www.nytimes.com/interactive/2015/10/12/t-magazine/eli...

11y ago

learc83 11y ago

Everything I've heard about this company is just weird. A biotech company started by a 19 year old Stanford dropout. She didn't even finish her second year in college, so she never made it past the intro courses. I can understand a 19 year old starting a software company, but this is more like a 19 year old starting a semiconductor fab. Someone just gave a her millions of dollars and a decade to run what was basically an r&d lab with almost no relevant experience? Then the company's board is composed of 2 former Secretaries of State, a former Secretary of Defense, 2 former Senators, a retired admiral, and a retired general. They only have one currently licensed physician (who also happens to be one of the former Senators), and no current CEOs [1]. [1]. http://fortune.com/2015/10/15/theranos-board-leadership/ http://fortune.com/2015/10/15/theranos-board-leadership/

adenadel 11y ago
To be fair about having only one currently licensed physician, they do have Bill Foege on the board and he is a world renowned physician credited with coming up with the strategy that eradicated small pox. Just because he is retired doesn't mean he isn't still sharp. The man is brilliant and very thoughtful. The makeup of the board is pretty strange though.
- jane_is_here 11y ago
  He is an epidemiologist. I would have expected haematologists, chemical pathologists, cytopathologists, clinical biochemists, histopathologists and other relevant specialists on the board. At the moment, there is just a trophy, retired epidemiologist.
  - encoderer 11y ago
    And a brain surgeon. But it's still strange.
argonaut 11y ago
You don't know what her coursework was a Stanford. She may well have skipped the intro classes. I don't think the makeup of the board is that weird. Yes, it may mean they're shady and are trying to leverage political connections as much as they can. But even if they had a great product, dealing with regulators would still be a huge problem/pain for them, and they would still ideally want a board with lots of politically influential people. There are many reasons to be wary of Theranos. I don't think the board makeup and Holmes being a dropout are among them.

smt88 11y ago

I'm very confused by this company and uBeam. Is it really possible that both companies could raise so much money without an astounding breakthrough to demonstrate to investors? Or do investors really have enough cash that they can blow a few million on companies that, if successful, should be worth many tens of billions?

venomsnake 11y ago
There are only 2 asset classes that yield reasonable ROI now - real estate bubbles in the mega cities and unicorns. Investors don't have a lot of choice.
- codewithcheese 11y ago
  Imagine you took a time machine from 1900 to 2015 and could only read you statement. Fantastic! =D
tzs 11y ago
Is there a sound debunking of uBeam? The only one I've seen widely circulated is the one here [1] and it has problems [2]. [1] http://lookatmeimdanny.tumblr.com/post/101432017159/how-putting-10m-into-ubeam-illustrates-everything http://lookatmeimdanny.tumblr.com/post/101432017159/how-putt... [2] https://news.ycombinator.com/item?id=9984822 https://news.ycombinator.com/item?id=9984822
- blackguardx 11y ago
  http://www.eevblog.com/forum/projects/the-ubeam-faq/ http://www.eevblog.com/forum/projects/the-ubeam-faq/
- smt88 11y ago
  All of the uBeam debunking and de-debunking goes over my head. It all sounds convincing when I read it. I personally will probably have to wait until we get an ex-insider who blows the whistle (like Theranos) or the product just comes out.
11y ago

pinaceae 11y ago

i wonder if there will be an overall impact on VCs branching into non-software areas. the software-is-eating-the-world kool aid might have gotten to some heads. "disrupting" social media or ads is one thing - health, energy, etc is a whole other ballgame. being of some sort of libertarian anti-gov mindset might also create a blindspot for gov regulation and agencies. uber can skirt the rules, but you don't fuck around with the FDA.

seehafer 11y ago
>but you don't fuck around with the FDA As 23andMe found out the hard way.
URSpider94 11y ago
VC's fund pharma and medical device companies all the time. However, from what I understand from friends in the business, there is usually a very standard playbook that hinges around the FDA approval process -- your valuation is your lifetime patent value for the drug or device, de-rated by the success rate of other ventures at your stage in the process. Theranos seems to have broken that mold.
- pinaceae 11y ago
  different VCs in biotech, not the same as the software ones we discuss here usually. isn't YC also dabbling in outlandish areas?

specialp 11y ago

I have commented on this in the past, but I have worked in the lab industry. It is very highly regulated, and what is happening now is exactly what should have been expected. The bottom line in the lab industry is you can market yourself however you want, claim whatever tech, but it is completely worthless unless you can get it FDA approved which is not easy. Suddenly a company that looks like a Kickstarter page has the valuation of companies like Quest Diagnositics. A problem here and in some investment circles is that people think every industry is ripe for disruption from some whiz kid but it is not always true. The lab industry is very competitive, and HMOs drive the margins down a lot.

petra 11y ago
The lab industry is not that technologically competitive, or else we would have some lab-on-chip tech deployed by now.
- dalacv 11y ago
  well, you still have to worry about the science part.
- refurb 11y ago
  I think you just proved the grandparent's point.
- blackguardx 11y ago
  Lab-on-chip tech exists. It is just very expensive.
  - petra 11y ago
    Why expensive ? in theory it was supposed to greatly reduce costs.
- specialp 11y ago
  There are tests that are done lab on chip but not everything can be done this way. Even a basic chem panel for your blood is 20 analytes. The mechanism for these tests are all different. Also the pre-testing prep for the blood is different. Some tests need whole blood with anti coagulant, some need serum spun down from whole blood, some need other treatments. This is a 50 billion dollar industry. If it was easy to prick someone's finger and run an entire comprehensive panel you better bet it is not going to be found by some teenager dropping out from college. Sure software has been done like this before, but this is hard science and engineering. If someone would have posted on HN that a college dropout without a computer engineering degree is making servers that run on 1/10th the power, people would laugh them off unless they really made one. As mentioned too cost is a big factor. It is at the point now where a basic blood panel is reimbursed at the same cost as a meal at a fast food restaurant. Even if this technology was not vaporware, it would have to be around the same price.

NN88 11y ago

I just want to SEE something. And they have nothing.

artnep 11y ago

Check out Theranos on Glassdoor starting on page 4. The insider scoop seems to be that it's a horror show.

onedev 11y ago
Wow, that's incredible. That's really really bad.

msravi 11y ago

Very smart. And very deceitful. WSJ called them out for fraudulently gaming proficiency testing: > 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. > Former employees say Mr. Balwani ordered lab personnel to stop using Edison machines on any of the proficiency-testing samples and report only the results from instruments bought from other companies. > The former employees say they did what they were told but were concerned that the instructions violated federal rules, which state that a lab must handle “proficiency testing samples…in the same manner as it tests patient specimens” and by “using the laboratory’s routine methods.” And they were very very careful and deceitful in their response: > The sources relied on in the article today were never in a position to understand Theranos’ technology and know nothing about the processes currently employed by the company. They were extremely careful in using the word "currently" - admitting obliquely that they'd changed their processes while making it seem that the employees didn't know what they were talking about. In reality, it appears that the former employees (and WSJ) rightly called them out for fraud, and somewhere along the way they "pivoted" to using standard techniques instead of the Edison snake-oil.

trhway 11y ago
>> Former employees say Mr. Balwani ordered lab personnel to stop using Edison machines on any of the proficiency-testing samples and report only the results from instruments bought from other companies. >> The former employees say they did what they were told but were concerned that the instructions violated federal rules, which state that a lab must handle “proficiency testing samples…in the same manner as it tests patient specimens” and by “using the laboratory’s routine methods.” sounds like they tried to pull Volkswagen.

jackgavigan 11y ago

I'm in two minds about this kerfuffle. On the one hand, you have a mediagenic, celebrity CEO with little relevant qualifications or experience (and a penchant for posing for photographs in Steve Jobs-style turtlenecks) who raised millions at a stratospheric valuation on the promise of revolutionising healthcare and disrupting the lab testing industry, while making lofty claims about "scientific advancement", but has ultimately failed to deliver on that promise, while appearing to erect a facade designed to conceal the fact that the service they're offering isn't all that different from the incumbents', and deflecting questions about the technology they (claim to) have developed. The suggestion that they broke federal rules by fudging proficiency-testing is the icing on the cake. On the other hand, the suggestion that they broke the rules is merely an allegation. On the topic of the company's progress towards it's stated goals, science is hard and a ten-plus-year time horizon doesn't appear unreasonable for achieving the objective Theranos is aiming for. Plus, they have successfully rolled out the HSV1 test. It's seems reasonable to expect that more will follow. I am instinctively skeptical of founders who seem to focus more on cultivating their media profile than on getting their heads down and actually delivering. There are people whose overriding motivation is maximising media exposure but who completely lack the ability to deliver what they promise. Sometimes their behaviour is down to naiveté, over-confidence, self-delusion or a deep-rooted desire for celebrity, fame or recognition (such people seem to wear the CEO "brand" in the same way that others wear Dolce & Gabbana or Prada). Othertimes, they're simply con-artists, looking to fleece gullible customers or investors. Given that Theranos has gained FDA approval for the HSV1 test, and the suggestion that they broke federal rules is unproven, I think Holmes deserves the benefit of the doubt. Her principal crime appears to be that she was a bit naive in making overly optimistic promises and embracing the celebrity CEO role, which has made her a target for schadenfreude.

msravi 11y ago
> Her principal crime appears to be that she was a bit naive in making overly optimistic promises and embracing the celebrity CEO role, which has made her a target for schadenfreude. And the fraud committed in gaming proficiency-testing - does she deserve the benefit of doubt in that too? Is it ok that many people at some point got back erroneous results from their lab tests because of equipment that she knew gave erroneous results?

ZanyProgrammer 11y ago

Its fascinating that Holmes has made a successful career after dropping out less than two years at Stanford, while there's a glut of biomedical researchers, and people with actual (graduate) degrees (from much less prestigious institutions than Stanford) have trouble getting jobs in the field.

cowsandmilk 11y ago
My theory: Her success was much more due to connections through her father than people acknowledge. She grew up all over the world due to her father's government positions in international aid. Her board is made up of prominent people involved in US foreign relations. Seemingly, these might be people her father dealt with working for the government in international aid. If you go to raise money and you have prominent people already on your board, you're likely to find success.

jerryhuang100 11y ago

it's fun to read the glassdoor reviews of Theranos: http://www.glassdoor.com/Reviews/Theranos-Reviews-E248889_P2.htm?sort.sortType=OR&sort.ascending=true&filter.employmentStatus=REGULAR&filter.employmentStatus=PART_TIME&filter.employmentStatus=UNKNOWN http://www.glassdoor.com/Reviews/Theranos-Reviews-E248889_P2...