
Theranos Dials Back Lab Tests at FDA’s Behest - raspasov
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CB8QqQIwAGoVChMItc_vrfjFyAIVStRjCh3A6AGZ&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2Fhot-startup-theranos-dials-back-lab-tests-at-fdas-behest-1444961864&usg=AFQjCNEQljk9gMya5WDjQPg1V_HRFDRuRA
======
learc83
Everything I've heard about this company is just weird. A biotech company
started by a 19 year old Stanford dropout. She didn't even finish her second
year in college, so she never made it past the intro courses.

I can understand a 19 year old starting a software company, but this is more
like a 19 year old starting a semiconductor fab. Someone just gave a her
millions of dollars and a decade to run what was basically an r&d lab with
almost no relevant experience?

Then the company's board is composed of 2 former Secretaries of State, a
former Secretary of Defense, 2 former Senators, a retired admiral, and a
retired general. They only have one currently licensed physician (who also
happens to be one of the former Senators), and no current CEOs [1].

[1]. [http://fortune.com/2015/10/15/theranos-board-
leadership/](http://fortune.com/2015/10/15/theranos-board-leadership/)

~~~
downandout
My guess is that in the beginning it had something to do with VC's being
desperate for an attractive, brilliant, successful female founder with world-
changing ideas that could be slapped on magazine covers to show everyone that
yes, they do invest in women. After the first round it's much easier to raise
subsequent rounds, and the whole thing may have fed on itself - investors
throwing good money after bad, both to save face and to chase the glimmer of
hope that they were getting somewhere with this. Elizabeth Holmes has somehow
kept the money flowing for a decade from extremely credible people, which
means she is far better at placating investors in the face of slow progress
than perhaps anyone in recent Silicon Valley history.

~~~
pushyriot
Yes. In 2003, when she started the company at 19, Draper etc invested & other
well known SJWs like Henry Kissinger & George Shultz joined her board because
of her gender. They both knew & give a shit that a decade later people would
be talking about diversity. For 12 years, she flipped her blonde hair & the
men were fooled-& the money just kept pouring in.

Do you really think VCs would invest $400 million & Walgreens & Cleveland
Clinic would do deals with this company, that put people's health at risk &
create massive liability, without diligence because she is a woman?

Maybe Theranos will fail. Obviously fraud is unacceptable. And the lack of
peer review helps no one. But, the idea that she was funded because of her
gender is absurd. If anything, given all the data on this topic, she was
funded in spite of it- because she was trying something very difficult &
potentially revolutionary--not some dumb app.

I hope you'll reconsider your thinking on this. Its hard enough for women to
get funded; maybe it's worth giving them the benefit of the doubt when they
do.

~~~
peteretep

        > Do you really think VCs would invest $400 million &
        > Walgreens & Cleveland Clinic would do deals with this
        > company, that put people's health at risk & create
        > massive liability, without diligence
    

Yes.

One way to help yourself swallow a bad decision is to look at all the other
people also making it, and convince yourself that if they're doing it, it must
be all right.

~~~
monopolemagnet
Investments in companies mostly make money evaporate _as a standard practice_.

Large-scale investors gravitate towards big risk/big reward ventures which
require significant capital because it's saves having to make a zillion angel-
scale deals. Plus, it seems sexier with extra-awesome brownie points to go
after something which _may_ be r/evolutionary.

PS: Color was a snausage clusterfuck of dbag, hubris behaviors that ruined the
team (and the venture). Hopefully, that elicited a corrective learning
experience.

------
msravi
Very smart. And very deceitful.

WSJ called them out for fraudulently gaming proficiency testing:

> The two types of equipment gave different results when testing for vitamin
> D, two thyroid hormones and prostate cancer. The gap suggested to some
> employees that the Edison results were off, according to the internal emails
> and people familiar with the findings.

> Former employees say Mr. Balwani ordered lab personnel to stop using Edison
> machines on any of the proficiency-testing samples and report only the
> results from instruments bought from other companies.

> The former employees say they did what they were told but were concerned
> that the instructions violated federal rules, which state that a lab must
> handle “proficiency testing samples…in the same manner as it tests patient
> specimens” and by “using the laboratory’s routine methods.”

And they were very very careful and deceitful in their response:

> The sources relied on in the article today were never in a position to
> understand Theranos’ technology and know nothing about the processes
> _currently_ employed by the company.

They were extremely careful in using the word "currently" \- admitting
obliquely that they'd changed their processes while making it seem that the
employees didn't know what they were talking about. In reality, it appears
that the former employees (and WSJ) rightly called them out for fraud, and
somewhere along the way they "pivoted" to using standard techniques instead of
the Edison snake-oil.

~~~
trhway
>> Former employees say Mr. Balwani ordered lab personnel to stop using Edison
machines on any of the proficiency-testing samples and report only the results
from instruments bought from other companies.

>> The former employees say they did what they were told but were concerned
that the instructions violated federal rules, which state that a lab must
handle “proficiency testing samples…in the same manner as it tests patient
specimens” and by “using the laboratory’s routine methods.”

sounds like they tried to pull Volkswagen.

------
specialp
I have commented on this in the past, but I have worked in the lab industry.
It is very highly regulated, and what is happening now is exactly what should
have been expected. The bottom line in the lab industry is you can market
yourself however you want, claim whatever tech, but it is completely worthless
unless you can get it FDA approved which is not easy.

Suddenly a company that looks like a Kickstarter page has the valuation of
companies like Quest Diagnositics. A problem here and in some investment
circles is that people think every industry is ripe for disruption from some
whiz kid but it is not always true. The lab industry is very competitive, and
HMOs drive the margins down a lot.

~~~
petra
The lab industry is not that technologically competitive, or else we would
have some lab-on-chip tech deployed by now.

~~~
blackguardx
Lab-on-chip tech exists. It is just very expensive.

~~~
petra
Why expensive ? in theory it was supposed to greatly reduce costs.

------
jackgavigan
I'm in two minds about this kerfuffle.

On the one hand, you have a mediagenic, celebrity CEO with little relevant
qualifications or experience (and a penchant for posing for photographs in
Steve Jobs-style turtlenecks) who raised millions at a stratospheric valuation
on the promise of revolutionising healthcare and disrupting the lab testing
industry, while making lofty claims about "scientific advancement", but has
ultimately failed to deliver on that promise, while appearing to erect a
facade designed to conceal the fact that the service they're offering isn't
all that different from the incumbents', and deflecting questions about the
technology they (claim to) have developed. The suggestion that they broke
federal rules by fudging proficiency-testing is the icing on the cake.

On the other hand, the suggestion that they broke the rules is merely an
allegation. On the topic of the company's progress towards it's stated goals,
science is hard and a ten-plus-year time horizon doesn't appear unreasonable
for achieving the objective Theranos is aiming for. Plus, they _have_
successfully rolled out the HSV1 test. It's seems reasonable to expect that
more will follow.

I am instinctively skeptical of founders who seem to focus more on cultivating
their media profile than on getting their heads down and actually delivering.
There _are_ people whose overriding motivation is maximising media exposure
but who completely lack the ability to deliver what they promise. Sometimes
their behaviour is down to naiveté, over-confidence, self-delusion or a deep-
rooted desire for celebrity, fame or recognition (such people seem to wear the
CEO "brand" in the same way that others wear Dolce & Gabbana or Prada).
Othertimes, they're simply con-artists, looking to fleece gullible customers
or investors.

Given that Theranos has gained FDA approval for the HSV1 test, and the
suggestion that they broke federal rules is unproven, I think Holmes deserves
the benefit of the doubt. Her principal crime appears to be that she was a bit
naive in making overly optimistic promises and embracing the celebrity CEO
role, which has made her a target for schadenfreude.

~~~
msravi
> Her principal crime appears to be that she was a bit naive in making overly
> optimistic promises and embracing the celebrity CEO role, which has made her
> a target for schadenfreude.

And the fraud committed in gaming proficiency-testing - does she deserve the
benefit of doubt in that too? Is it ok that many people at some point got back
erroneous results from their lab tests because of equipment that she knew gave
erroneous results?

~~~
jackgavigan
Strictly speaking, that's an unproven allegation so, on the principle of
"innocent until proven guilty", yes, I'm inclined to give the benefit of the
doubt.

If, on the other hand, it turns out that the allegations are true, then I
would hope to see people serving time in jail.

------
hkmurakami
Previous discussion on very related article (yesterday)

[http://www.wsj.com/articles/theranos-has-struggled-with-
bloo...](http://www.wsj.com/articles/theranos-has-struggled-with-blood-
tests-1444881901)

"Hot Startup Theranos Has Struggled With Its Blood-Test Technology"

~~~
gitah
Here's the HN discussion to go with yesterday's article:
[https://news.ycombinator.com/item?id=10391313](https://news.ycombinator.com/item?id=10391313)

Also here is Holme's interview with Jim Cramer tonight regarding yesterday's
article:

[http://www.cnbc.com/2015/10/15/theranos-ceo-fires-back-at-
ws...](http://www.cnbc.com/2015/10/15/theranos-ceo-fires-back-at-wsj-i-was-
shocked.html)

------
smt88
I'm very confused by this company and uBeam. Is it really possible that both
companies could raise so much money without an astounding breakthrough to
demonstrate to investors?

Or do investors really have enough cash that they can blow a few million on
companies that, if successful, should be worth many tens of billions?

~~~
raverbashing
To be fair I think Theranos might have a stronger case, but needs more money
to have it implemented

For uBeam I'm just waiting for it to blow up (I wonder if they only saw a high
impedance voltmeter showing a big number)

~~~
smt88
Did you see this? I didn't actually see it on HN for some reason:

[http://techcrunch.com/2015/10/08/how-ubeam-
works/](http://techcrunch.com/2015/10/08/how-ubeam-works/)

~~~
raverbashing
Interesting, but there seems to be no new concrete information (beyond some
easily speculated info)

The real issue is efficiency and charge time

------
artnep
Check out Theranos on Glassdoor starting on page 4. The insider scoop seems to
be that it's a horror show.

~~~
onedev
Wow, that's incredible. That's really really bad.

------
raspasov
I am very curious if someone who's familiar with medical devices and different
kinds of tests can explain the details of all of this.

~~~
OopsCriticality
Theranos is secretive and doesn't behave like other diagnostic testing
companies, and these deviations generate controversy.

Theranos have been very, very squirrelly on details about their testing
platform, claiming that they need to keep them as trade secrets in order to
maintain competitiveness. Ordinarily, the tests would be independently
evaluated in the peer-reviewed literature, and through the literature is how
scientists and physicians would assess the value of what Theranos is offering;
without peer-reviewed literature, there is little to go on. Maybe it works,
maybe it doesn't, only peer-reviewed literature counts so we don't know.

Theranos has an unusual board of directors for a diagnostic testing company,
with surprisingly little medical experience overall. Holmes herself is a
college dropout—it's very hard to compete in a highly specialized and
technical field without the proper knowledge base and experience, and
traditionally that would be with an M.D.+fellowship or Ph.D.+postdoc. In
interviews, when things get the least bit technical, Holmes sounds like she
doesn't know what she's talking about. Theranos' patents, of which Holmes is a
named inventor, are (IMHO) vaguely written. Could Holmes be a diagnostics
savant? It's possible, but I don't see credible evidence to suggest this is
the case.

The popular media has hyped up the company technology a lot, but in reality
microfluidics is not new to the diagnostics arena, and it remains unclear as
to what exactly Theranos offers as an advancement on what others are doing.
There are also many technical issues to be considered with fingersticks vs.
venipuncture samples, and Theranos has never explained how they have overcome
those issues other than unsubstantiated assurances that their tests match
standard lab tests.

There is also a fundamental problem with the entire hypothesis underlying
Theranos: which I very crudely summarize as more tests = better health. That
hypothesis is sophomoric and does not hold under the current thinking of
evidence-based medicine. One can over test, and it has real, proven
consequences towards the health of the patient in terms of invasiveness,
costs, and potential risks due to unneeded procedures.

Does Theranos have something unique? It's not impossible. My null hypothesis
is that they do not, and until I see something in the peer-reviewed literature
suggesting otherwise, I am thinking it's smoke and mirrors.

Edit: All that text and I didn't directly answer your question! Consider my
bloviation proof of my credentials as an academic. The earlier WSJ article
raised questions about irregularities in regulatory-mandated proficiency
testing, a serious allegation. My interpretation of this new, linked article
is that there might be something to the allegation.

~~~
petra
With regards to microfluidics, I've always understood the problem mostly to do
with business - nobody from the incumbents wants a Moore's law in an industry
without a lot of potential growth.

And that story fits the "new disruptive startup" story well.

~~~
joezydeco
I spent a few years with a major player in the diagnostics business. I worked
directly on their automated ELISA machines.

When I was there in the 1990s, they already had spent a decade or so of R&D on
microfluidic technology. They saw it as a hockey stick, but the technical
hurdles were (and continued to be) very large.

The idea that one very talented scientist could find a novel solution that
this company, with dozens of dedicated biochemists, could not find is
plausible. But I believe the reality is somewhat different.

~~~
petra
Assuming we're talking veni-puncture based measurements ,can you please expand
about the current technical hurdles of microfluidics, and what prevents them
from being solved , even after 20 years+ of effort by the research community ?

And all those interesting research paper ,we're seeing from the academic
community, aren't they targeting the issue ? or are mostly resume fillers ?

~~~
joezydeco
I'm not a biochemist, and it's been too long ago when I worked there to
comment on what the current state of the art is in this area.

What I recall is that at the microfluidic level, a lot of the work becomes a
mechanical issue not a biochemical one. You're working with very small samples
in a disposable system (obviously cleaning a capillary between samples is
practically impossible). Blood isn't the easiest substance to work with,
especially when trying to move it through small channels.

On top of that, now you're trying to detect very small amounts of antigen in
an even tinier sample size. Your technology needs to be incredibly sensitive
but have a decent resolution as well. Some antigens you want a simple
positive/negative outcome. But with some other tests you want a level or range
(like thyroid).

------
danso
Wow, it's as if the WSJ anticipated that Theranos was going to respond with
"the WSJ's reporting is a bunch of lies; we're passing the FDA's gold standard
of quality", and so purposely held back the revelation that an "inspection was
triggered by concerns the agency had about data Theranos had voluntarily
submitted to the FDA" for a second-day piece.

I understand PR is an exceptionally hard game when you want to be a
revolutionary company, but Holmes's response so far has been shameful.
Theranos's first public response last night was a tweet [1] to John McCain,
Joe Biden, and Arianna Huffington linking to a puff piece of bullet points and
unlabeled line charts. On Kramer's show, besides focusing on touting the
relationship to the FDA, she avoided answering the most basic questions that
required stating actual numbers or facts [2]. And instead of doing a point-by-
point response against the WSJ's claims [3], Theranos chooses to throw a bunch
of impressive sounding numbers -- ("more than 1,000 pages of statements and
documents"...because volume of printed paper is in itself evidence?) in the
same vague way that it has been bragging about its purportedly revolutionary
technology while refusing to even name the third-parties that they claim to
have audited them, even to friendly journalists [4].

It's sad, it really does sound like she hit on a worthy-billion dollar idea.
And she's put in the time and energy into it for many years to see it through.
But I hate the way the way her company's official response has been to kick up
a cloud of meaningless data in such a way to obfuscate true accountability,
hoping that most people will think "Well medicine is above my head, there's
probably just no way to test their genius inventions!"...good for the WSJ for
actually putting some time and thought into examining the claims while many of
its respectable peers have been publishing puff pieces, even as recent as this
week [5] (yes, I know the NYT's style section is not the same as its
investigative team, but it doesn't seem likely the NYT had an active
investigation into Theranos).

[1]
[https://twitter.com/theranos/status/654547567426928641](https://twitter.com/theranos/status/654547567426928641)

[2] [http://www.inc.com/kimberly-weisul/elizabeth-holmes-
refutes-...](http://www.inc.com/kimberly-weisul/elizabeth-holmes-refutes-wall-
street-journal-story.html)

[3] [https://theranos.com/news/posts/statement-from-
theranos](https://theranos.com/news/posts/statement-from-theranos)

[4] [http://www.newyorker.com/magazine/2014/12/15/blood-
simpler](http://www.newyorker.com/magazine/2014/12/15/blood-simpler)

[5]
[http://www.nytimes.com/interactive/2015/10/12/t-magazine/eli...](http://www.nytimes.com/interactive/2015/10/12/t-magazine/elizabeth-
holmes-tech-visionaries-brian-chesky.html?_r=0)

~~~
kzhahou
Wait, why did they tweet to Biden, McCain, and Ariana? They're not on the
board, they're not known advocated for the company, and they didn't just make
public statements about Theranos. That's just bizarre.

~~~
danso
I wondered that too (as in, why those people, and not all the other famous and
influential people who believe in Theranos). I think it's just timing:

The Huffington Post recently published an op-ed by Holmes, which was tweeted
out by Huffington:
[https://twitter.com/ariannahuff/status/654312511794212864](https://twitter.com/ariannahuff/status/654312511794212864)

Senator McCain apparently visited the lab "last night" (as of today). Also,
Arizona is the first state to allow people to get all the kinds of tests
Theranos does without a doctor's note, and McCain had something to do with
that:

[https://twitter.com/SenJohnMcCain/status/654714209360437249](https://twitter.com/SenJohnMcCain/status/654714209360437249)

[http://www.washingtonpost.com/news/wonkblog/wp/2015/07/02/fd...](http://www.washingtonpost.com/news/wonkblog/wp/2015/07/02/fda-
approves-theranos-9-finger-stick-bloodtest-for-herpes/)

Joe Biden visited the Theranos lab in July:
[http://www.usatoday.com/story/tech/2015/07/24/biden-
visits-t...](http://www.usatoday.com/story/tech/2015/07/24/biden-visits-
theranos-lab-part-healthcare-innovation-summit/30634739/)

Nothing wrong with having powerful friends -- including all the government and
military people on Theranos's board -- but making such an early, blatant
appeal to political authority instead of some kind of scientific or health
authority, when the controversy is exactly about the scientific part...that
doesn't feel like a convincing rebuttal.

------
jerryhuang100
it's fun to read the glassdoor reviews of Theranos:

[http://www.glassdoor.com/Reviews/Theranos-
Reviews-E248889_P2...](http://www.glassdoor.com/Reviews/Theranos-
Reviews-E248889_P2.htm?sort.sortType=OR&sort.ascending=true&filter.employmentStatus=REGULAR&filter.employmentStatus=PART_TIME&filter.employmentStatus=UNKNOWN)

------
ZanyProgrammer
Its fascinating that Holmes has made a successful career after dropping out
less than two years at Stanford, while there's a glut of biomedical
researchers, and people with actual (graduate) degrees (from much less
prestigious institutions than Stanford) have trouble getting jobs in the
field.

~~~
cowsandmilk
My theory:

Her success was much more due to connections through her father than people
acknowledge.

She grew up all over the world due to her father's government positions in
international aid.

Her board is made up of prominent people involved in US foreign relations.
Seemingly, these might be people her father dealt with working for the
government in international aid.

If you go to raise money and you have prominent people already on your board,
you're likely to find success.

------
etep
Thank you for linking this through google.

------
NN88
I just want to SEE something. And they have nothing.

------
rokhayakebe
Isn't this only a small part of the Theranos offering? As I understood their
biggest advantage is they can run many tests from one (or a few) blood drops.

~~~
aheilbut
According to these reports, there is only _one_ test that they are allowed to
run on the proprietary system that is supposed to provide that advantage. All
the others are being run using conventional methods.

~~~
rokhayakebe
I understand it as they can still ran all the tests they were running before
using other methods to get the blood sample. The only advantage of the
nanotainer was its ability to be less invasive.

~~~
aheilbut
I think the other factor was supposed to be the cost of the assays. If they're
just using the same machines as everyone else to do the same tests, they have
no competitive advantage.

------
pinaceae
i wonder if there will be an overall impact on VCs branching into non-software
areas. the software-is-eating-the-world kool aid might have gotten to some
heads. "disrupting" social media or ads is one thing - health, energy, etc is
a whole other ballgame. being of some sort of libertarian anti-gov mindset
might also create a blindspot for gov regulation and agencies. uber can skirt
the rules, but you don't fuck around with the FDA.

~~~
URSpider94
VC's fund pharma and medical device companies all the time. However, from what
I understand from friends in the business, there is usually a very standard
playbook that hinges around the FDA approval process -- your valuation is your
lifetime patent value for the drug or device, de-rated by the success rate of
other ventures at your stage in the process. Theranos seems to have broken
that mold.

~~~
pinaceae
different VCs in biotech, not the same as the software ones we discuss here
usually. isn't YC also dabbling in outlandish areas?

