This article is important, because it is the moment when the Theranos’ last major defense of its image crumbled. Until now, Theranos and those close to the company could claim that its problems were limited to its laboratory in Newark, California, and that it had really done a fine job in Arizona, where most of its testing centers are. That claim lies demolished. The Journal reports that, in order to comply with regulators at the Centers for Medicare & Medicaid Services, Theranos has notified thousands of patients that test results it sent out in 2014 and 2015 were invalid.
In the past, Theranos has vigorously contested the Journal’s reporting. This time, it acquiesced, saying in a statement that it has taken “comprehensive corrective measures to address the issues CMS raised in their observations.” That the problems extended to so many people, and to Arizona, which Theranos had made its beachhead into the diagnostics market, leads to a simple conclusion: Theranos just isn’t very good at running a diagnostic testing business.
There will be other shoes to drop. Theranos’ chief executive and founder, Elizabeth Holmes, is trying to do what she needs to do to hold on to her company. CMS has threatened to ban her from the lab industry for two years, among other sanctions.
But Theranos’ argument that it can build a rival to LabCorp or Quest from the ground up is simply no longer credible. If it ever manages to do so, it will be far in the future. And the company is starting from scratch now–or worse. That leaves another question. What about Theranos’ revolutionary technology, which aimed to replace the vials of blood taken by phlebotomists with mere drops of blood, and the days of waiting for test results with hours. Does any of this stuff work?
Sadly, nobody outside Theranos knows. Maybe Holmes doesn’t know herself. The results from researchers at Mount Sinai revealed that the Theranos tests, which may or may not have been performed on its proprietary technology, were generally within spitting distance of those of LabCorp and Quest. The independent scientists Theranos recently added to its scientific advisory board say that they have seen promise in the data.
But Holmes and Theranos have dashed every opportunity they have been given to build trust. Way back in September, the company acted like an approval from the Food and Drug Administration for a single test, for herpes, validated its entire technology, when it did not. Before Carreyrou’s piece, first Holmes responded to criticism simply by insisting that larger rivals were out to get her.
That attitude continued until Theranos was facing the scrutiny of an alphabet soup of regulators, not only the FDA and CMS but also the SEC and DOJ.
Most importantly, Theranos has failed, again and again, to present any data outsiders can use to judge whether its systems work. Back in December, Holmes described in detail, on stage at our healthcare conference, a scientific paper she planned to soon submit. In April, Theranos said it had still not submitted a single scientific publication to a medical journal. If Theranos ever wants trust, it had better start earning it with science. That means releasing data.
Not only is it behind a paywall it's largely wrong.
The current dust-up over Theranos - as in, the past 24 hours of news - is the invalidation of the results from their Edison machines, which were their magic "we don't have to tell you how it works" boxes in California. They rolled back all the results from those things and some of the results from their conventional tests.
It has long been suspected that the Edison tests were absolute bunk, while the rest of their testing constellation was simply badly run and poorly conducted. The WSJ has been harping on the fact that their conventional tests kind of suck and the FDA told Theranos they couldn't use their Edison boxes like six months ago, as I recall. Theranos has been protesting this in a half-hearted sort of way while juggling board members, etc but this is the first time they've mea culpa'd their way into admitting that the Edison data was invalid.
I follow Theranos too closely due to a wife-driven hatred of Quest and LabCorps. They've been dead man walking for six months now. This latest bit of news is bad for them, but not for the reasons Forbes claims. They still have a shoddy conventional lab that Walgreen's is desperately attempting to distance themselves from and this news doesn't change that. What it changes is the notion that Theranos believes it has something new to offer the world of blood testing and now, in order to avoid criminal prosecution, they're throwing in the towel on their miracle device.