How Do You Become A Billionaire Without A Product?

Every time I see a story about Elizabeth Holmes and Theranos, I get that little feeling in my gut that says that “something isn’t right.”

http://www.businessinsider.com/elizabeth-holmes-still-wont-explain-how-her-9-billion-technology-actually-works-2015-6?utm_content=buffer3914a&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

I see the billions being invested, but there doesn’t seem to anything to show for it.  Now I’ve worked with scientific instruments of various types as an engineer for some time now and I know what to look for when activity is going on.  I also know what budgets look like and I’ve never seen an instrument that requires a  billion dollar investment before startup. The last time I looked Theranos didn’t seem to be hiring engineering staff for their ramp up.  In order to spend that much money you would be sucking up the engineering talent from across the country and that doesn’t seem to be happening.  From experience, I know what you can do with what budget and for an instrument to do what Theranos is claiming they can do you can do the development for less than 10 million and the total rollout for about 100 million for all the FDA requirements. That’s based on the Mass spectrometers I’ve worked on, one of which IS used for diagnostics.

I also looked at Theranos’s  patents and there was no there there.  The only ones I could find were process patents that didn’t do very much. I’m going to note that I’ve been working in this industry and on a similar instrument. Well similar in what it does.

Ibis Biosciences Plex-ID® Pathogen Detector

So I know the kinds of things involved in getting a class 1 medical device through the warrens of regulation.  As well as amount of sheer work involved in design and development of any kind of new instrument, let alone something as supposedly revolutionary as what Theranos was supposed to be doing.  Furthermore if this technology from Stanford really existed you would find evidence of it and there would be some public notice of it. Worse, as far as I could find, and I looked through stuff from all sorts of sources, nothing seemed to be out there that actually laid out how the technology actually worked.

http://www.techinsider.io/how-theranos-revolutionary-technology-works-2015-10

Looking at this, I understand why.

https://www.aacc.org/~/media/files/annual-meeting/2016/theranosaaccpresentation.pdf?la=en

For all the talk about nano this and micro that, the actual instruments in the box are pretty much the same ones that are already out there doing the same kinds of tests. It’s a nice little machine, but new fundamental new technology, not really.

Theranos Continues Damage Control Messaging

The issue with conducting blood test isn’t how they are analyzed, but keeping the sample separate and the tracability to the patient maintained. It appears that Theranos had some problems with that.

The federal report hasn’t been made available to the public, but WSJ reporters have spoken to people who are familiar with it. They claim that Theranos ran an important hematology blood test on over 80 people during a six-month span from April to September 2015 despite getting erratic results from quality-control checks that were meant to ensure the test’s accuracy.

The new report is supposedly more detailed than the January 2016 summary letter that followed a federal inspection of Theranos’s lab in Newark, California, led by the by the federal Centers for Medicare and Medicaid Services (CMS). The feds cited deficient practices in five categories, saying the company was putting patient health and safety and jeopardy. The new report expands on these accusations.

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The lab test in question is a hematology test called “prothrombin time” that measures the length of time it takes blood to clot. It’s an important step in the treatment of patients who are at risk of strokes or who have blood disorders. Failure to properly perform hematology tests can be hazardous for patients who are taking blood thinners, such as wafarin (which goes under the tradename Coumadin). Too much of these blood thinners can cause fatal bleeding, and too little can leave patients vulnerable to clots and strokes.

Theranos “ignored quality-control results for the blood-clotting test that fell short of its own criteria,” reported the WSJ. Lab technicians at Theranos apparently deviated from the typical result by more than two standard deviations. (Most labs use the two-standard deviation criteria but no more.) A person familiar with the report told the WSJ that there were typically up to seven quality-control failures in a single day.

An expert cited by the WSJ said that doctors should disregard results from patients who received the blood-clotting tests from Theranos, saying “Those results are not worth anything.”

 

 

http://gizmodo.com/theranos-was-even-more-reckless-with-patients-than-we-t-1763491762

Frankly I think that the largest issue was that the VC types in the Valley wanted to believe the hype.  I doubt that something like Theranos would have come off in my area where we do a lot of the kind of instrumentation and lab test equipment.  Here there are too many people close at hand in the Universities and existing companies to tell you if something isn’t right.  In silicon valley they don’t do the kind of tech for medical laboratories and there’s a lot of money ready to be thrown at dreams, usually with no common sense behind it.

http://www.vanityfair.com/news/2016/09/elizabeth-holmes-theranos-exclusive

The problem with that is how do you separate the big dreams with true vision from the snake oil.  Or even the snake oil that actually works(check the history of the Chinese in the US) from stuff made from the wrong kinds of snakes.  You don’t want to get bitten.

Silicon Valley Snake Oil

When somebody insists on playing everything so close to the vest, It does not inspire confidence.  Technology is not magic and any new tech has to have a foundation based on existing tech.  If somebody claims that they have something that’s so great that it’s revolutionary, even if it’s an attractive young woman, make sure that yo get to see what’s under the hood.  If you don’t understand what’s under the hood and if you don’t know how it works consult with somebody who should.  If they can’t figure it out, keep your wallet closed.

Tech insider has a ton of Theranos stuff.  Another in the long line of too good to be true stories.

 

http://www.techinsider.io/category/theranos

If anybody wants to spend some money on real research on real instruments, let me know as I’ve got some ideas kicking around in the back on my head.  I can write up a business plan and find the people needed to do the work fast as the people I used to work with at my last employer were laid off.

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