Theranos – A recipe for disaster?


A lot has been said and written about Theranos. My goal in this blog post is not to reinvent the wheel but to guide the reader toward meaningful and relevant web content about this story.

Like everybody else I was fascinated by the rise of Elizabeth Holmes without questioning the technology itself. Why? First, at that time, it was not one of the company I was considering for analysis (and investment opportunity) and, second, because sometimes technical words and concepts are difficult to understand and you do not have the time to dig further.

Needless to say that my interest grew stronger when I saw that the company and its technology as well as its founder were under scrutiny… As I’m very curious I tried to understand.

My first objective was to find the timeline of the events. Interestingly, the fall started in October (2015) like the majority of stock market crashes… Autumn may be the season for distrust or maybe mistrust… (in this case for good reasons!).

Beyond what has been shown and written in the media, it is key to understand the path that led the company in this situation and the potential mistakes made so far. It seems that more experience on board could have helped and maybe avoided misdirection.

Management errors could have doomed the company but the most problematic issue may well be the reputation: not only the company’s one but also the ones of all the other diagnostic start-ups in US and Europe. Investors will be much more skeptical. On the other hand, it also shows that due diligence and analysis (not only financial but mostly technical and scientific) must be done before investing in order to limit and frame the risk.

The media obviously played a significant role in pushing, developing and supporting the hype behind Theranos. The reality of media pressure and the underlying celebrity fame are far from innocent.

Another point, which should have made us raised a red flag, is the fact that none of the big names in biotech investing took a single share of Theranos capital. Well-known investors are generally an excellent benchmark even if they are not immune to failure.

This story is really amazing and I will update this blog post each time I have relevant material to make it easy to follow the case.

So, stay tuned!


Relevant sources and articles:

The rise and fall of Theranos – A cartoon history – July 2016

Theranos Doomsday Clock – MedCityNews – February 2016

What Theranos and Elizabeth Holmes Have Always Misunderstood – INC – April 2016

Theranos debacle may scare investors away from diagnostic technology – STAT – April 2016

Theranos’ Lab Problems Go Way Deeper Than Its Secret Tech – Wired – April 2016

The secret culprit in the Theranos mess – Vanity Fair – May 2016

The Theranos Scandal Is Just The Beginning – Fast Company – May 2016

Theranos’ Voided Tests Could Make It a Magnet for Lawsuits – Wired – May 2016


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Scientists are developing an x-ray pill you can swallow for colonoscopy

Less invasive technology is clearly the future. It will allow more cases to be diagnosed and treated early leading to better care and cure.

Hacking the Human OS – IEEE


A mind-blowing report from IEEE about the human body’s operating system

Can we harvest digital health data from trackers and sensors to improve our health and well-being? I summarized below what you will find on the IEEE dedicated web page. I was amazed by the variety and depth of all the innovations presented in these pages. Some of them have certainly the power to be game changers in the health care world. I’m looking forward to seeing all the advances coming to life!

Reading the Code

Several technologies are close to the market and will help us monitor our health. A very good example is the biostamps developed by John Rogers from the University of Illinois. These tiny, stretchable and skin-like sensors are able to send information and data to our smartphone alerting us whether something is happening in our body. More and more complex data could be sensed such as blood oxygen, blood glucose and even muscle weakness or sleep patterns.

Another fascinating example that could change the life of Type 1 diabetes patients is the artificial pancreas. It links “data from an implanted blood-sugar sensor to a computer, which then controls how a pump worn on the hip dribbles insulin under the skin through a pipette. In its fully realized form, the machine would take the patient out of the decision-making loop”. Advanced versions of the system are currently in clinical trials. Continuous monitoring is a huge advance in the field of disease management. It could strongly lighten the daily burden of each patient.

Another field where wearable are very popular: athletes. They are always eager to test the last innovation in the wearables arena. Physiological measurements can be extremely useful to optimize training and rest periods, improve performance and avoid injuries. Sleeves, wristbands, sensors equipped with highest technology can really make a difference in the way we monitor and track performance.

A device rapidly diagnosing any medical condition or disorder… Sounds like science fiction, right? Like in Star Trek… Some of you may recall the tricorder. And guess what? It’s about to become reality thank to a competition launched by Qualcomm. 300 teams registered, 10 finalists which are about to deliver their prototypes very soon. Once the winner has been chosen, real life clinical trials will start and we will know if it’s really working as expected. It’s a huge step forward as it will allow the diagnosis (and maybe the start of a treatment) for a lot of people, not only in US or Europe but also in emerging countries where the lack of medical infrastructure is killing human beings…


Analyzing the Code

Technology companies showed their interest in healthcare only recently… It’s welcomed because without technology you cannot do anything with data sets. However, some people are afraid of their data becoming public and being hacked. I think that between these two extreme opinions, we can take the good from both sides and see what this can bring us. “Apple, Google, Microsoft, and Samsung, have all launched e-health initiatives, mostly based around smartphones and wearables. Indeed, the fast-growing health care business would seem a natural next step for the tech giants”. A lot of deals have been signed between pharmaceutical companies and technology firms: Google and Novartis; IBM, Apple, Medtronic & JNJ… These are deals to follow in order to analyze the outcomes. Great initiatives could really emerge and I think we are at the beginning of a new era!

Long term analysis could help us understand in a more detailed way how we get sick, how the disease develop and how we could have anticipated it by looking at biomarkers trends.

The new era of precision medicine is making a big difference for patients. An open-source platform has transformed the way patients are being treated. Surgery is not always the best option in oncology for example and sometimes drug treatment is much more effective. A thorough and careful analysis of all the parameters will help doctors taking the right decision for the right patient at the right time.

Real-time epidemics modelling could have saved lives. Building treatment centers at the right locations, anticipating the spread of the disease (in this case, Ebola) and how to limit the contagion were several of the criteria used to run the model. We will never know what would have happen without such a model but globally we can say that modelling is critical in disease management. Additionally, it is not the use of a single model that will be helpful but the customized and accurate modelling for each and every epidemic, according to its characteristics.


Changing the Code

Performing surgical interventions at very small scales is becoming a reality. “Thanks to developments in microfabrication and other areas, researchers are pushing the limits on the size and capabilities of objects small enough to move through the human body”. “With the right design, researchers say, a microrobot—or a swarm of them—could deliver a highly targeted dose of drugs or radioactive seeds, clear a blood clot, perform a tissue biopsy, or even build a scaffold on which new cells could grow”. For the time being, tests have only been run in animals.

A new emerging medical field: electrical therapy. Vagus nerve stimulation has the potential to treat several conditions from migraine to asthma, even immune diseases. Progress is very slow and several failures have made history… but new startups are created and renew the interest in this type of technology.

W like Watson, the digital MD. Watson is based on machine learning: “bringing together computer scientists and clinicians to assemble a reference database, enter case studies, and ask thousands of questions. When the program makes mistakes, it self-adjusts. Researchers also evaluate the answers and manually tweak Watson’s underlying algorithms to generate better output. Here there’s a gulf between medicine as something that can be extrapolated in a straightforward manner from textbooks, journal articles, and clinical guidelines, and the much more complicated challenge of also codifying how a good doctor thinks.” Progress is under way.


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New genetic testing will be inexpensive and democratized – NYT


New Genetic Tests Hold Promise

A new article published in the New York Times is really fascinating. A Silicon Valley start-up, Color Genomics, found a simple way to test for genetic mutations responsible for breast and ovarian cancers. They used saliva samples and full automation together with medical doctors interpreting the results for USD 250 per test, a tenth of the competitors’price. As women will be able to pay out-of-the-pocket themselves, the company will not even bother to negotiate with insurance companies. For women not able to finance the cost themselves, Color Genomics will give it for free.

It is only the starting point of a new trend. New diagnostics companies are emerging and finding new ways to deliver the same results but cheaper than the big firms. Illumina is one of the major companies understanding and capturing this trend with the launch of a low cost machine.

Another compelling example in the start-up world is Theranos, a firm able to perform a lot of lab tests on a single blood drop at very low prices; or Counsly, a company that develop low-cost genetic test for parents planning to have children.

However, some questions remain about the impact on healthcare costs, who should be tested,… Below are some recent resources bringing elements of response to these points.

Will lowering the price of genetic testing raise the cost of medical care? (Forbes Article)

What patients need to know about cancer genetic testing (American Cancer Society)

NYT Article

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