9 ms·
Theranos didn’t work with the huge drug company it supposedly made money from
- uslic001 11y agoThe Emperor's New Clothes: the Emperor is wearing nothing at all. What a sham company.
- kefka 11y agoWhat emperor? You mean that homeless dude with schizophrenia? Yeah, that's VC funding for you.
- pen2l 11y agoWalgreens recently halted all Theranos expansions (currently only 41 Walgreens have Theranos centers... there were plans to expand to many more): http://techcrunch.com/2015/10/23/walgreens-halts-theranos-testing-center-expansion/ http://techcrunch.com/2015/10/23/walgreens-halts-theranos-te... And it recently came to light that Elizabeth Holmes was misleading people when she said her company voluntarily stopped using nanotainers -- it seems she was forced to stop by FDA: http://www.nytimes.com/2015/10/28/business/theranos-quality-control-was-questioned-by-fda.html http://www.nytimes.com/2015/10/28/business/theranos-quality-... Between all of this, FDA coming in for tests, and other strange things, it seems they have a lot of answering to do. Or, alternatively, them being in stealth mode is the reason for all of these strange happenings and lack of better information out there.
- joezydeco 11y agoHow can you perform live tests on patients and still be in stealth mode? At some point you have to come clean with the FDA about your technology, right? Or is this considered a wide-field clinical trial?
- tvladeck 11y ago> How can you perform live tests on patients and still be in stealth mode? That really hit the nail on the head for me.
- msandford 11y agoFrom an old article on the subject: http://fortune.com/2014/06/12/theranos-blood-holmes/ http://fortune.com/2014/06/12/theranos-blood-holmes/ The tl;dr is that Theranos makes their own machines, which makes every test that they perform technically a "Lab Developed Test" LDT which doesn't have the same oversight that machines which are sold to others. As long as they make their machines and use their machines, they're effectively exploiting a loophole. From the article: The backdrop for this dispute is an unusual regulatory structure that does, in fact, confer upon some–though not all–conventional lab tests an extra layer of validation that Theranos’s do not yet have. Most labs, like Quest and Laboratory Corp. of America, perform many of their routine tests using analyzers they buy from medical-device manufacturers, like Siemens, Olympus, and Beckman Coulter. Before those manufacturers can sell such equipment, they must obtain U.S. Food and Drug Administration approval for the tests those analyzers perform–a process that is in addition to, and more searching than, the audits and proficiency tests required to win CMS certification for the lab itself. At the same time, for other procedures conventional labs will devise their own lab-developed tests, or LDTs, which they do not have cleared by the FDA. While the FDA takes the position that it could require approval for LDTs, for many years it has said it would forgo that right in the exercise of its “enforcement discretion.” Theranos, which does not buy any analyzers from third parties, is therefore in a unique position. While it would need FDA approval to sell its own analyzers to other labs, it doesn’t do that. It uses its analyzers only in its own CMS-certified lab. All its tests are therefore LDTs, effectively exempt from FDA oversight.
- joezydeco 11y agoBeautiful explanation. Thanks.
- 7Figures2Commas 11y agoSince there's so much interest in unicorn valuations today, and Theranos is a prominent unicorn, anyone wondering about the potential implications of all this news on Theranos' valuation might find it useful to look at Valeant Pharmaceuticals, a publicly-traded company (ticker: VRX). It is facing a number of issues, a few of which have led some to speculate that it could become pharma's version of Enron[1]. In July, VRX hit a high above $260. Today it's trading at less than $110. [1] http://www.nytimes.com/2015/10/27/opinion/is-valeant-pharmaceuticals-the-next-enron.html http://www.nytimes.com/2015/10/27/opinion/is-valeant-pharmac...
- whatok 11y agoVRX really seems like it's much more smoke than actual fire; at least on recent specialty pharmacy news. It's definitely a complicated and shady-looking structure but it seems like they have shielded themselves from any fallout from fraud. That's not to say the stock won't take a hit in the meantime but Enron comparisons are really overblown right now. Management definitely screwed up by not clarifying things earlier. Theranos is in a completely different situation. They could easily lose Wallgreens among others over the current fallout and not get the FDA to go the way they want. Company would take a huge hit and given that their signature technology is not really usable right now, I don't know how much more leeway they would really have after this.
- seivan 11y agoWould you short it x10?
- eitally 11y agoI would totally short it. Speaking as a husband whose wife's company was bought then killed by Valeant....
- alexhu11 11y agoValeant is especially pernicious case of credulous investors looking at a rising stock price and skipping their due diligence. There's a lot of amazing blog posts from John Hempton and others outlining the problems with their story. http://brontecapital.blogspot.com/2015/10/some-comments-on-valeant-conference-call.html http://brontecapital.blogspot.com/2015/10/some-comments-on-v... http://brontecapital.blogspot.com/2015/10/simple-proof-that-philidor-has-shipped.html http://brontecapital.blogspot.com/2015/10/simple-proof-that-... http://brontecapital.blogspot.com/2015/10/valeant-and-its-captive-pharmacies-some.html http://brontecapital.blogspot.com/2015/10/valeant-and-its-ca... http://azvalue.blogspot.com/2015/08/valeant-detailed-look-inside-dangerous.html http://azvalue.blogspot.com/2015/08/valeant-detailed-look-in... http://azvalue.blogspot.com/2015/08/valeant-detailed-look-inside-dangerous_27.html http://azvalue.blogspot.com/2015/08/valeant-detailed-look-in...
- notacoward 11y agoThis company is looking less and less like they're struggling to develop new technology, more and more like a deliberate sham. Given that so much of their support thus far has been due solely to the Cult of Disruption, I can't help but wonder if news like this might make at least a few investors consider a return to good old-fashioned due diligence before placing their bets.
- minimaxir 11y agoWhat's interesting is that venture capitalists are slamming media outlets for reporting on the issue. Here's a rather silly rebuttal to a recent Theranos piece on The Information from Dave Morin: https://twitter.com/williamalden/status/658705178523258880 https://twitter.com/williamalden/status/658705178523258880 "Isn't it time as Millenials that we try to use the Internet to unearth deeper facts and see through these traditional smear campaigns?"
- OopsCriticality 11y agoMorin's rebuttal is all the more laughable in the light that Theranos may be deficient in their quality systems: https://www.theverge.com/2015/10/27/9621026/fda-theranos-lab-quality-inspection-elizabeth-holmes https://www.theverge.com/2015/10/27/9621026/fda-theranos-lab... These aren't trivial problems that can be fixed "at the time of, or within a week of, the inspection", as Theranos claims.
- semi-extrinsic 11y agoIt's also laughable that he thinks the volume of blood drawn for a standard test is what makes him pass out. Nope, that's a purely psychological reaction. If we're talking about donating blood, I'd believe it could be a physical effect, but that's equal to 50 vials in a blood test...
- volaski 11y agoIt's a conflict of interest only if there actually is a conflict of interest. Tell me, what "conflict of interest" does Dave Morin have with Theranos?
- saryant 11y agoHello Enron, nice to see you again!
- erobbins 11y agoBetween this and the "wireless energy over ultrasound" scam I'm starting to wonder if VCs actually do any due diligence at all.
- raverbashing 11y agoI bet they pour over and nitpick lots of minor details on the financials Tech? That's for the nerds. The light is blinking so it's fine I guess
- 7Figures2Commas 11y ago> I bet they pour over and nitpick lots of minor details on the financials What financials? Lots of these companies have little to no revenue.
- mmahemoff 11y agoProjections up and to the right.
- erobbins 11y ago"this graph looks like a hockey stick, how's $50 million?"
- cowsandmilk 11y agoto be fair, their competition has well-known financials. The size of the existing market for blood tests is already large; any penetration would give you a sizable business.
- 7Figures2Commas 11y ago"If this company obtains 1% of a $500 billion market, things will be great!" is not due diligence. Here, everything realistically comes down to the technology because the company's ability to gain and sustain market share is almost wholly dependent on it having a superior technology.
- ChuckMcM 11y agoI wonder what the real story is. A lot of questions, that if true make it look bad, but if those are just random guesses with no basis in fact? Then its just a hit piece.
- antr 11y agoMe too, but I'm also very curious to see the due diligence reports (if any), DFJ has on Theranos given that they've been in Serias A, B, and C.
- andyl 11y ago"Fake it till you make it."
- Overtonwindow 11y agoI feel like we've seen this before. Young startup, visionary founder, boat loads of money, then after lots of money burned, outright lies, false claims, or at the very least vaporware.
- Mimick 11y agoWait, but how the founder became a billionaire? I thought they are generating huge profit already...
- ksherlock 11y agoMake believe billionaire, based on Theranos having a $9 billion valuation, based on $90 million in VC investments.
- dnautics 11y agoCambrian Genomics?
- w1ntermute 11y agoHalcyon Molecular?
- dbcooper 11y agoBoth them and Theranos suffered the suicide of their technical lead ...
- learc83 11y agoThe funny thing is, this startup isn't that young. It's 12 years old. Someone basically gave a completely inexperienced founder tens of millions of dollars and over a decade to run an R&D lab.
- maxlamb 11y agohundreds of millions.
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- BiologyRules 11y agoI interviewed at Theranos a year ago, and found the employees to be smart and dedicated. However, the company was the most secretive I've interviewed at and the employees complained about being overworked. The fact the founder sold C++ compilers to Chinese universities when g++ is open-source sounded odd. But I still had hope in them even after they passed on me -- a Silicon Valley company actually making a difference in the people's health. I WANT TO BELIEVE. If this turns out to be smokes and mirrors, I'd be very saddened. Theranos' failure would confirm what everyone interested in biotech knows but wishes wasn't true: that advancements in this field do not move at the speed of the digital economy.
- khaki54 11y agoOne reason they are so secretive is because they are trying to maintain many of their technical advances as trade secrets rather than patent them.
- shas3 11y ago> maintain many of their technical advances as trade secrets rather than patent them. That... is true about most companies. Patents are almost always strategic disclosures.
- deleted 11y ago[deleted]
- tptacek 11y agoHolmes ran that business in high school. She was born in 1984, so that would put the date around 2000. There were good reasons not to use G++ in 2000. When Alexandrescu's book was published, in 2001, it was somewhat notorious on my team (shipping code on G++) for how much of it didn't work well, or at all, in G++.
- saidajigumi 11y agoHeck, virtually any C++ compiler was a big pile of sharp edges back then, by comparison to just a few years later. Especially if you dared to use it for embedded work, not so much due to the "embedded" part but just because the embedded suite compilers were just so much further behind the C++ curve.
- ameyamk 11y agoI just wonder instead of going back and forth and create more controversy - why don't they just show which tests are working right now - and which don't. Demonstrating with data is the best defense they can put forth. its ok - if only small portion of tests are valid at this point but if they show progress with data - this validates they are on the right track.
- semi-extrinsic 11y agoThey have one test which is FDA approved, for herpes simplex.
- deleted 11y ago[deleted]
- uptown 11y agoIf their tests work, why not just show the world? Invite the press. Invite doctors. Livestream it. Whoever it takes to validate what they say. What's the downside?
- deleted 11y ago[deleted]
- kyrre 11y agohopefully this isn't an example of a biotech startup embracing the silicon valley 'fake it until you make it' mentality.
- kyrre 11y agohopefully this isn't an example of a biotech startup embracing the silicon valley 'fake it until you make it' mentality.
- maxerickson 11y agoIs there somewhere a clear indication that the extent of the relationship with Phizer or GSK was misrepresented to reporters by someone from Theranos?
- univalent 11y agoI never understood what was unique about this company. I worked for a company over a decade ago that did a clinical trail for a bacterial pneumonia micro-assay at Arup Labs in SLC. This seemed like the same thing but with a lot more fanfare. I called some folks I used to work with to check if I was missing something and they felt the same. (I'm not a biologist, I wrote the software and did the stat research).
- stvswn 11y agoThe "dress like Steve Jobs" thing is starting to feel kind of messed up, am I right? (I read somewhere that she claimed that she hadn't considered that Steve Jobs used to wear black turtlenecks, that she was more inspired by Sharon Stone... which is really hard to believe)
- seansmccullough 11y agoYou probably have better funding rounds if you dress like Steve Jobs. /sarcasm
- pbreit 11y agoSo Theranos definitely worked with Pfizer and probably worked with GSK. I am not a Theranos apologist but this is lousy reporting.
- untilHellbanned 11y agoDead unicorn list 1. Homejoy 2. Theranos 3. ....
- strebler 11y ago3. Evernote 4. Fab
- adharmad 11y agoThere should be a dying unicorn list too..
- toomuchtodo 11y agoI'm working on rolling out fuckedunicorns.com (a nod to pud's fuckedcompany.com). As someone who lived through the first boom bust, very interested to watch things play out again.
- dwfox 11y agoThey're called a "unicorpse".
- slr555 11y agoI seem to detect the familiar odor of negative PR wafting over this entire series of articles. The New Yorker has one of the most famously rigorous fact checking policies in journalism. Things rarely ever slip past them. Companies like Quest Diagnostics and Labcorp have immense amounts of revenue to lose to a new, more efficient entrant like Theranos. No surprise they would go negative to undermine a new competitor. As far as the company ferreting out journalistic mistakes and correcting them, the onus should be on the media to get the story right.
- exegesis 11y agoYes, agreed, except that micro-assay isn't new, and is actually used on newborns all the time. It isn't used in adults because it tends to be wildly inaccurate/variable, even under the best of circumstances.