Theranos, now valued at $9 billion, has claimed that its device, called Edison, can process 240 different lab tests detecting things like high cholesterol and cancer using just a few drops of blood.
The Wall Street Journal did some investigative reporting, and with input from four former employees, has uncovered some information that makes that claim entirely false, at least for the time being.
One former employee said that the device was only being used for 15 tests in December 2014.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
A Theranos employee also accused the company of not reporting test results that would have made the precision of Edison questionable – this could be a violation of federal rules for laboratories. In addition to that, the company reportedly uses traditional machines bought from companies like Siemens AG for the majority of its tests, which it has failed to publicly disclose.
When the Journal asked Theranos about how many tests the device is being used for, It disputed that its device could do just 15 tests, but would not say how many tests it now handles or answer questions about its lab procedures, citing “trade secrets.”
Theranos’s outside lawyer, David Boies, told the Journal that the company isn’t yet using the device for all the tests Theranos offers. The transition to doing every test with the device is “a journey,” he said. He also said that providing the “full range” of tests they claim the device is capable of is a goal for Theranos that they will eventually achieve.
During the Journal’s reporting, Theranos deleted a sentence on its website that said: “Many of our tests require only a few drops of blood.” It also dropped a reference to collecting “usually only three tiny micro-vials” per sample, “instead of the usual six or more large ones.” Heather King, the company’s general counsel, says the changes were made for “marketing accuracy.”
In addition to the discrepancy involving how many tests Theranos is capable of precessing, the accuracy of the device seems to be questionable as well.
All labs are required to prove to the federal Centers for Medicare and Medicaid Services that they can produce accurate results.The proficiency testing process is administered by accredited organizations several times a year. According to internal emails reviewed by the Journal, when Edison and an instrument from another company gave different results when testing for vitamin D, two thyroid hormones and prostate cancer. The gap reportedly suggested to some employees that the Edison results were off.
Senior lab employees showed both sets of results to Sunny Balwani, Theranos’s president and chief operating officer. In an email, one employee said he had read “through the regulations more finely” and asked which results should be reported back to the test administrators and government.
Mr. Balwani replied the next day, copying in Ms. Holmes. “I am extremely irritated and frustrated by folks with no legal background taking legal positions and interpretations on these matters,” he wrote. “This must stop.” He added that the “samples should have never run on Edisons to begin with.”
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.”
At the time, Theranos was using Edison machines to test samples for vitamin D, the two thyroid hormones and prostate cancer, according to the former employees.
The entire report put together by the Journal is fascinating, and indeed raises plenty of questions about Elizabeth Holmes’ diagnostic empire. Perhaps some of this will also be news to many of Theranos’ investors and shareholders.
Photo: Flickr user Steve Jurvetson
