
The 30-year-old health sector billionaire - schrofer
http://www.bbc.com/news/business-28756059
======
nimish
As far as I can tell, the stars aligned here.

You have a brilliant founder who has a background in the tech (Chem
Engineering) and the upbringing and connections to take research trips out to
Singapore.

Second, you have the tech: microfluidic assays, and the idea of collecting
them all in the same place.

Third, an existing industry that's been content to sit around and charge high
prices due to low competition: LabCorp & company.

Finally, a generous funding environment.

Unfortunately, their secrecy is kind of a turn off. How can I know to trust
their numbers?

~~~
ibisum
Their secrecy is a turn off - as well as the people who are orbiting around
the company. Do we really want the ideologies of the likes of Henry Kissinger
and Donald Rumsfeld - people who have extraordinary track records of _not_
doing good in the world - to be involved in the next generation of health care
technology innovation - particularly its control and application? Kissinger-
doctrine style politics and healthcare do not mix.

~~~
adventured
Rumsfeld was also the Chairman of Gilead. I doubt it's a question of "do we
want these people involved?" \- the reality is there's nothing that can stop
it. They're the ultimate insiders. Rumsfeld can easily clear the deck for
whatever approvals you need, and solve any problems you have, just as he did
for Gilead. In exchange, you make them richer. That's how the FDA system
works. You can't play in the medical / healthcare field without having a devil
on your shoulder protecting you from the other monsters that will use the
regulatory environment to destroy you. That's also how the business world at
large works in general now, ala Al Gore on Apple's board, helping to protect
Jobs from the options scandal. It's why Dropbox picked up Condoleezza Rice.
It's ugly, but it's what you get when you have extreme government regulation,
and when lobbyists can crush you by bribing the right people in DC, all major
businesses must have their own power brokers.

~~~
refurb
Oh please. The FDA loves antagonize Congress about it's independence. Are
there shady dealing? Sure, but don't make it out to be some secret cabal who
always gets their way through shady backroom dealings.

To me it sounds like you'd love to have some sort of "political leanings
filter" on people who do business. If their politics agrees with yours, great,
if not, we need to make sure those people don't get into positions of power.

~~~
adventured
Positions of power are of little concern in a free market economy. The
influence that comes with wealth is not the same as having political power,
which is power at the barrel of a gun. The problem is, America is not a free
market economy.

Hilariously I'm the exact opposite of what your false conclusion proclaims.

I'm neither liberal nor conservative - in fact I'm anti partisan - and I'm a
laissez-faire Capitalist. I'd prefer the government be completely outlawed
from creating economic regulations, and I believe in the separation of state
and economy for the exact same reason state and church is separate: they
infect each other. That instantly wipes out all lobbying for special
treatment, special laws, and competition-by-government. The government returns
to doing what it's only job should be: protection of individual rights.

The US is becoming a fascist oligarchy, dominated by a massive consolidation
of select few winners that are then protected by the government from
competition; this has occurred in nearly every segment of the economy.

The FDA rarely does anything that isn't shady. It is fully dominated by the
mega-corps that can afford to buy political influence, from Pfizer to Merck to
Gilead.

~~~
TheOtherHobbes
I'm baffled by why you don't understand that what you're describing isn't an
inevitable outcome of low-regulation, laissez-faire capitalism.

You only get stability with negative feedback. Capitalism is all about
positive feedback, and leads inevitably to systems that conglomerate,
stagnate, distort, and eventually either implode or blow up.

Where do you think the negative feedback to prevent that is supposed to come
from?

And please don't say 'markets' because there is no evidence that I know of
that markets have ever done any such thing, or even that a market economy is
capable of it.

------
jgrahamc
The important thing about this article is not her age, her gender or her net
worth: it's the enormous change her company is saying is possible in blood
testing.

Ignore the comparisons with Steve Jobs and other crap and think about what her
company is doing and what it means.

~~~
madaxe_again
It means...

INVALID. You are not eligible for this product/job/life.

~~~
dnissley
Hah, makes me think of Gattaca.

------
w1ntermute
Prior (~1.5 months ago) HN discussion on Theranos:
[https://news.ycombinator.com/item?id=7951019](https://news.ycombinator.com/item?id=7951019)

------
enziobodoni
I think what is important is the LACK of critical articles out there. Where
was the counterpoint in this article, or the recent Fortune article. I run a
hospital laboratory in Seattle, and I am a clinical pathologist. Like
Elizabeth Holmes, I studied Chemistry at Stanford, although I did graduate.
Everyone in the lab world is a-twitter about Theranos right now, up to the
CEOs of the big companies, largely because no one knows what they are doing.
Everyone who goes and talks to them, including interviews for a job, signs a
CDA, so this isn't surprising. However, there are several things we can know:
1- the big name folks on the board are Hoover Institution connections. No
surprise there, I knew all those guys were there when I was at Stanford, and
she was connected with them early. The person who commented about the
importance for these links when it comes to FDA problems is right on. 2- what
these people are doing for lab testing, in terms of technology, sounds totally
revolutionary IF YOU DON'T KNOW ANYTHING ABOUT CLINICAL LABS. If you did know,
you would understand that most of our routine instruments ALREADY use a couple
microliters for an assay, and that results are available in seconds to
minutes. There has never been an article about Holmes that mentions this. What
she has done with microfluidics is to reduce dead volume quite a bit to allow
overall lower sample volumes, but this is an evolutionary, not revolutionary,
change to instrumentation. It is also of dubious clinical value (more on this
later). 3- the fact that they list their prices IS revolutionary, and it's the
best thing about the company. I wish I could do at for my lab. Secrecy of
pricing is one of the major problems with Us healthcare. 4- no one writing any
of these articles about her understands that fingerstick blood is not the same
as venous blood. It is blood mixed with interstitial fluid from the tip of the
finger. The results of tests are different for analytes in venous bold and
fingerstick blood. Thus,they need to do a clinical validation that their
results are meaningful, in addition to an analytical validation to prove that
they're accurate. This is where the FDA, as they did to 23andme, is going to
get involved, unless Don Rumsfeld can head them off. If LAb Developed Tests
get regulated in the coming years, though, they are totally screwed, just like
I am. 5- many people don't know that you can already get lab tests done on
finger stick blood, ie prick your finger at home and mail in the blood or take
it to participating Walmarts. The reason for this, I suspect, is that the
companies that do this are not headed by an attractive blond woman and
enveloped in the shroud of mystery of a Silicon Valley.

I will be interested to see how long it takes before a serious "the emperor
has no clothes" article will come out in a mass media outlet, and someone who
actually runs a lab or knows any of the rules of running labs is asked even
one question. It is much less sexy of a story when told that way, so maybe
never.

~~~
dave_sullivan
Where do you see room for improvement, if any, for blood testing? As far as I
can tell based on what I've read and what you've said, they've basically made
certain types of blood tests easier, cheaper(?), and accessible via an app? Is
that accurate? If so, even without any new technology, that seems like it
could be interesting, if only as a business with a marketable product. Not
sure about $10B interesting, but hey...

~~~
enziobodoni
The 10b valuation is nuts. That's more than LabCorp or Quest, two companies
that already do lab actual lab tests on real instruments for hundreds of
millions of people. Yes, it looks like you can get results online from
Theranos, but you can do this for lots of labs, as well. Theranos' app is
undoubtedly slicker...Silicon Valley can afford better software people than
labs can. As for improvements in labs today.... Our financial structure is
crazy. Fee for service drives more testing, when in fact the main problem in
US medicine right now is that we do too much testing (overall...there are
still some areas where we need to do more). The solution to test
overutilization is not making tests cheaper so folks can get more tests at
Walgreens. One answer could be the current ACO model (or it's logical
extension, single payer or socialized medicine) in which the goal of care is
the health of the patient, not the profit. Once hospitals and labs are payed
by the person, not by the test, we're gonna find lots of surprising ways to
stop letting folks get tests they don't need, since the answers to those tests
will often be misleading, require expensive follow up, etc... To the folks on
this discussion who think that they would prefer to be able to go and get
frequent tests (or, god forbid, get frequent Lyme serologies, which borders on
outright quackery), I would say this: you can't handle the truth. Really.
There is a reason why we put doctors as gatekeepers between patients and
medical services like MRIs, lab tests, and chemotherapy. It's called Bayes
Theorem (it's on Wikipedia). If it's exceedingly unlikely that something is
wrong with you before you get a test, then it's still exceedingly unlikely you
have the condition even when you get a positive test for it. This breaks down
when the doctor does a bad job, since it's the doctor's job to select tests
only in those with higher pretest probabilities, but it is an inescapable
issue. I realize also that suggesting that laypeople are too ignorant to take
their own health into their own hands sounds not even a little elitist, but it
is sorta true. One of the main concerns for healthy people should be staying
OUT of the medical care system, because we hurt people sometimes, even when we
help them. The lab is a gateway to the medical care system, so unless you want
to go through the gate, stay away.

~~~
lauradhamilton
Is there really an over-utilization of blood tests? MRIs, yes, but I'm not
sure that right now we're really doing too many blood tests.

Regarding your point on Bayes Theorem, that's valid in some ways and invalid
in some ways. Suppose someone gets a vitamin D test back at 8 ng/mL. There's
not really a chance of a false positive. He's deficient and needs
supplementation. Making the test cheaper, faster, and more accessible can
really only improve the health of the population. It will likely also drive
down the cost of healthcare overall, because vitamin D deficiency has all
sorts of unpleasant effects.

Furthermore, the literature suggests that the vast majority of doctors do not
understand Bayes Theorem. Source:
[http://yudkowsky.net/rational/bayes](http://yudkowsky.net/rational/bayes)

~~~
enziobodoni
You are demonstrably wrong about the vitamin d. What if it was a specimen
swap, and the lab screwed up and tested someone else's blood instead of yours?
This happens.

~~~
DocSavage
The cheaper and faster the tests, the easier it is to reorder a confirmation
(or two or three).

~~~
enziobodoni
And then what.... Rock Paper Scissors for which one is correct?

------
dkural
The recent FDA ruling on lab-developed test means this company is now
massively disadvantaged, as their entire secrecy is based on not needing to
get FDA approval. Now they need it.

------
robbiep
As a practicing doctor (albeit a junior one) I simply cannot foresee any more
than 1 or two conditions where direct to consumer lab testing would actually
be of practical use.

If on the other hand her technology is radically cheaper than the hospitals
own lab then it would rapidly achieve huge market share and help cut
healthcare costs. Just yesterday I had 2 sets of coags on the same patient
sent back necessitating retaking (not an easy job on an elderly severely
demented woman), one because it had clotted (apparently) and another because
there was not enough blood. Smaller volumes required would be great for a
whole bunch of situations.

~~~
mrfusion
I see dozens of conditions this would be good for. I think you get biased once
you spend 8-10 years becoming a gatekeeper to healthcare.

People want to take their health into their own hands and not have to have
every test blessed by a $150 doctor visit plus a separate lab visit.

Conditions to test for:

Hemachromatosis Many other genetic conditions Vitamin deficiencies (D, B,
potassium) Blood sugar for people prone to diabetes Lyme disease (test after
every tick bite after waiting the required time period)

And that's just off the top of my head.

Many of those are tests I'd like to a few times a year, but don't want to
schedule a doctor appointment, take off work, make a copay, schedule a lab
test, take more time off, another copay, etc.

~~~
computerbob
I can't agree with you more. I go hiking a lot and have gotten tick bites.
There is nothing worse than having to schedule an appointment and going to the
doctor just to have something simple done. Biggest waste of time,
vacation/sick days and all to do something that is so easy.

------
RyanMcGreal
Ironic that a company focused on blood tests would have a board of directors
with so much blood on their hands.

------
ansgri
The shape of lab testing in the U.S. seems to be bad: from the article I get
that significant advantages include _upfront prices_, wide network of sampling
stations, and results being emailed within 24 hours. In Moscow (recently in
other cities as well) we've had InVitro Labs for several years, which do
everything mentioned. No doubts there are some billionaires.

------
GolfyMcG
I remember reading something quite awhile ago about her and her company, which
was very dismissive of the entire subject. Is anyone familiar with what this
was in reference to, because this articles does seem rather convincing to me!

~~~
mrfusion
Well I think it's a disruptive technology to traditional labs. So expect to
see a lot of dismissive articles.

------
applecore
The most important thing: Holmes still owns half the company.

It's extremely rare for such a young founder to still be in control of the
company, and to own 50% after more than a decade. That's not only a huge
accomplishment, it's a testament to the strength of Holmes' conviction in the
company's mission.

Getting rich all comes down to ownership—every single percentage point counts.

~~~
adventured
If you just want to get rich, a few points of a serious company would do.

She could have cashed out a long time ago and been very rich. The reason her
ownership is important isn't the substantially inflated valuation and digits
on her net-worth, it's the control it enables to steer such a young company
long-term.

Getting rich doesn't come down to counting every single percentage, it comes
down to creating a lot of value. If you do that, whether you own 14% or 40%,
you're going to be rich.

------
adventured
It's interesting they've pegged the company at a $9 billion valuation. Labcorp
at this moment has a $9 billion valuation (with $6 billion in sales, and $573
million in profit...).

~~~
rwissmann
Nice catch. However, Labcorp has almost no revenue and profit growth in an
increasingly competitive industry. A valuation at 15.5x LTM profit does not
seem unreasonable.

Comparing the valuation of a growing startup with a stagnant incumbent is
always going to look strange if you only consider a snapshot of financial
numbers.

~~~
adventured
I think Labcorp's valuation is perfectly reasonable.

I think Theranos is overvalued by a factor of ten fold.

The market eventually forces a sane valuation on companies based on revenue
and earnings. It's extraordinarily unlikely a company charging vastly less for
its products will produce a dramatically greater economic outcome than Labcorp
which dominates the industry (Labcorp has the best of both worlds, high
prices, and high market share, the only thing they could improve is volume).

Theranos investors have had all their future returns pulled forward. Even in a
wildly successful outcome, Theranos is unlikely to be worth much more than 2x
what they already are, 20 years from now. That assumes they can one day grow
to have ten billion in sales and a billion in profit, based on much lower
prices and higher volume. That day is so far off, there's zero chance of
Theranos sustaining their crazy valuation between here and there as capital
markets turn negative after this hyper bull market run.

------
roma1n
Well that would be awesome to monitor anticoagulation.

~~~
schrofer
yes indeed, this opens up new possibilities for monitoring what's going on in
our bodies. But we would need more knowledge / education so we don't jump to
conclusions when a value out of bounds.

~~~
roma1n
Sure, but that particular ship sailed a long time ago. Most patients track
their INR from the lab and simply ask when it swings too much.

------
dr3wid
Maybe this is why its possible - $10k for blood test

[http://www.washingtonpost.com/news/to-your-
health/wp/2014/08...](http://www.washingtonpost.com/news/to-your-
health/wp/2014/08/15/a-10000-blood-test-yes-
really/?Post+generic=%3Ftid%3Dsm_twitter_washingtonpost)

------
free2rhyme214
Why does she wear a turtle neck? lol

------
thedrbrian
On paper being the important bit of this piece.

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wintermute306
She is dressed like CEO if a dystopian ruling corporation.

