Inflated billions

The biotech startup Theranos, which brought its founder Elizabeth Holmes the title of the youngest female billionaire, has new problems, they can threaten the company with major consequences, writes The Wall Street Journal (Deficences Found at Theranos Lab - VM).

U.S. health inspectors have found serious shortcomings in the Theranos laboratory in Northern California, if they are not eliminated, the 31-year-old Holmes' company faces exclusion from the Medicare program (a health insurance program in the United States that pays for the treatment of people over 65 and disabled), informed sources told the WSJ. According to them, the official publication of the results of the audit is expected soon.

In 2013, regulators had already discovered flaws in Theranos laboratories, but they were quickly fixed. 

Now, according to WSJ sources, we are talking about much more serious problems. They may be another blow to the reputation of Theranos, which in 2014 was estimated by investors at $9 billion (Holmes' controlling stake is more than half of this amount)

In October last year, the WSJ wrote that Elizabeth Holmes' company provides incorrect and incomplete data about its work to clients and investors. So, the unique Theranos blood analysis technology called "Edison", which requires only a drop of blood from the patient's finger, was used only in 15 types of tests with 200 stated in the advertisement. All other tests were carried out using conventional technologies, in particular, on Siemens equipment. At the same time, the collected blood had to be diluted to obtain the required volume of fluid.

In addition, often the results obtained using the patented technology did not coincide with the results of analyses conducted in the traditional way, the newspaper wrote with reference to former employees of the startup.

Currently, the only test that the company conducts on Edison equipment is an analysis for herpes, which is the only one approved by the US Food and Drug Administration (FDA).

After Elizabeth Holmes' startup attracted the attention of major investors, she was considered a rising star of Silicon Valley, she was often compared to Apple CEO Steve Jobs. Holmes claimed that she had created a new method of blood analysis, for which only one drop of blood taken from a finger is enough, and not numerous tubes of venous blood. Theranos has promised to make a breakthrough in the early diagnosis of diseases, because its tests are cheap, fast and effective.

However, after the WSJ investigation, which took several months, the enthusiasm of the press subsided a little. According to the results of 2015, Forbes magazine included Holmes in the top ten worst CEOs, since her company has not yet demonstrated impressive results to the market.

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27.01.2015