Theranos and its so-called finger prick blood testing
Theranos was a medical device company started by 19-year-old college dropout Elizabeth Holmes in 2003. The company’s device, called the Edison, was touted as being a blood test machine that could test for hundreds of things with only a small amount of blood.
The company was valued at nearly $10 billion before its downfall in 2015. The Edison device, which was only FDA approved to test for the herpes simplex virus outside of a clinical laboratory setting, was supposed to automate and miniaturize blood tests and offer in-home blood tests.
Theranos’s technology was never peer-reviewed despite the company claiming there was data backing the accuracy and reliability of the test results they did publish. In early 2016, Theranos allowed the Cleveland Clinic to perform validation studies. The findings of the Cleveland Clinic were that the device’s blood test results were outside their normal range about 1.6 times more often than other testing services. It also showed that lipid panel test results from the Theranos device and other clinical services were nonequivalent.
In 2015, John Carreyrou, a Wall Street Journal reporter, published a story saying that Theranos was using Siemens’s blood testing machine to run tests for its own devices. He also reported that the Edison device might have inaccurate results.
By 2016, Theranos and Holmes were under criminal investigation by federal prosecutors and the Securities and Exchange Commission for lying to investors about its technology. It was found that the company voided years of Edison test results and that 1% of its test results were voided or created from its machines.
Holmes reached a settlement with the SEC that required her to pay a $500,000 fine, as well as give up 19 million shares of company stock while agreeing to be banned from holding any kind of leadership position for 10 years. Facing other investigations and lawsuits, Theranos shuttered its doors officially in September 2018 and released all assets and remaining cash to creditors. Holmes and her business partner Sunny Balwani face multiple counts of wire fraud and conspiracy to commit wire fraud in federal court.
