Theranos Under Fire: CEO Elizabeth Holmes Defends Company Amidst Accuracy Claims
Silicon Valley darling Theranos, the blood testing company promising to revolutionize healthcare, is facing a storm of controversy. The Wall Street Journal, in a scathing article published this morning, alleged that the company’s proprietary testing devices may be inaccurate and accused Theranos of deceptive practices. The article cites a former employee who claims that only 15 of the 240 tests offered by Theranos are actually performed on the company’s Edison machine, with the vast majority being conducted using traditional lab equipment.
In a fiery response to the allegations, Theranos founder and CEO Elizabeth Holmes appeared on CNBC’s Mad Money, vehemently denying the claims and calling the Journal’s article "completely out of context."
“This is what happens when you work to change things,” said Holmes. "First they think you’re crazy then they fight you and then all of a sudden you change the world."
Holmes asserted that Theranos provided the Journal with over 1,000 pages of documentation proving the article’s claims false, and that the publication ignored numerous sources who contradicted the accusations. She also revealed that the company offered to demonstrate its technology to the Journal’s staff but the offer was declined.
The Journal claims Theranos has not disclosed publicly that it performs the majority of its tests using traditional equipment. Holmes refutes this, stating that the company has been transparent about its use of both traditional and proprietary methods. She explains that while the Edison machine performs a specific set of tests, Theranos expanded its test menu to include rarer, expensive tests performed in traditional labs. These tests are offered at a dramatically reduced cost, providing expanded access to vital diagnostic tests.
Regarding the specific claim that the Edison machine can only perform 15 out of 240 tests, Holmes states that Theranos has submitted over 130 pre-submissions to the FDA for tests performed on its proprietary devices. The company prioritizes running tests on the Edison machine based on their frequency of use, and is aggressively pursuing FDA clearance for all of its proprietary tests.
When challenged on the Journal’s accusations, Holmes offered a bold proposition: a head-to-head study comparing Theranos’s testing results with Quest Diagnostics or LabCorp, two major competitors. “We’ve already done it,” she declared.
Holmes’s forceful defense appears to have calmed concerns from Theranos’s key partners. Neither Walgreens, a major retailer offering Theranos’s services, nor the Cleveland Clinic, a renowned healthcare provider, have expressed any intention to modify their existing partnerships with the company.
Theranos stands as a powerful example of the scrutiny faced by innovative companies attempting to disrupt entrenched industries. The company’s future hinges on its ability to effectively address the allegations, regain public trust, and deliver on its promises of affordable, accessible healthcare. The next few weeks will be crucial for Theranos’s fate, and the fallout from this controversy could have significant implications for the future of healthcare innovation.
Theranos Under Fire: CEO Elizabeth Holmes Responds to Scathing Wall Street Journal Article
Lately, one of the most exciting privately held companies in Silicon Valley, Theranos, has come under fire. This diagnostics company, with its ultra-fast fingerprint blood tech testing technology, aimed to upend the entire traditional healthcare establishment by making it easier, less expensive, and much less uncomfortable for patients to get tested for a wide range of conditions. For the last few years, Theranos has been viewed as a revolutionary company, its CEO, Elizabeth Holmes, has been touted as the next Steve Jobs, and the company has been valued as high as nine billion dollars in its most recent round of fundraising. But Theranos also has its critics, and just this morning, The Wall Street Journal ran a pretty scathing article about the company, alleging that the company’s proprietary testing devices may be inaccurate and basically accusing Theranos of deceptive practices. The Journal cites a former employee who claimed that of the 240 tests offered by Theranos, only 15 are actually performed on the company’s proprietary Edison diagnostic machine, with the vast majority of the rest being done on traditional lab equipment. The article was brutal, but as Jim Cramer, host of CNBC’s Mad Money, says, “We know there are two sides to every story.” In a rare move, Cramer invited Elizabeth Holmes to his show to address the accusations head-on.
Key Takeaways:
- Theranos, a Silicon Valley startup revolutionizing blood testing, faces allegations of inaccurate testing and deceptive practices.
- The Wall Street Journal claims Theranos uses traditional lab equipment for most tests, contradicting their claim of faster, easier, and cheaper testing.
- Holmes vehemently denies these allegations and challenges the Journal’s sources, accusing them of misrepresenting the truth.
- Holmes offers to demonstrate the Theranos technology to the Journal but they decline, raising further questions about their reporting.
- Holmes highlights partnerships with prominent institutions like Walgreens and the Cleveland Clinic, who seemingly stand by her company despite the controversy.
Facing the Critics: A Conversation with Elizabeth Holmes
"This is what happens when you work to change things," Holmes says on Mad Money, "First they think you’re crazy then they fight you and then all of a sudden you change the world." She expresses shock at the Journal’s claims, stating that they were provided with over a thousand pages of documentation to prove the inaccuracies in the article.
Holmes refutes claims that Theranos misleads the public about their testing methods. She explains that they initially offered traditional venous blood draws when they launched in 2013, but in 2015 expanded their test menu to include more specialized and esoteric tests, which are traditionally run infrequently but cost a huge amount of money. Theranos, she proudly declares, made these tests available at drastically reduced costs. While the traditional tests are typically done on standard lab equipment, they are clearly disclosed to the public, as indicated on the Walgreens website and in press releases.
Holmes addresses the Journal’s claim that only 15 out of 240 tests are conducted on Theranos’ proprietary Edison device. She clarifies that 130 tests are currently in the FDA submission process for the Edison device, and the company prioritizes pushing tests to this platform based on their frequency of use. She outlines their active commitment to promoting FDA regulation of lab-developed tests, highlighting the fact that Theranos was the first company to advocate for this. In fact, even for tests not fully run on their platform, Theranos is working to ensure that all assays are FDA cleared.
When pressed about the Journal’s call for a comparative study between Theranos and traditional labs like Quest or LabCorp, Holmes reveals that such a study has already been conducted. In an FDA-mandated study with 889 patients, Theranos’ technology was proven to be effective and consistent with traditional lab testing.
Navigating the Murky Waters of Controversy
While Theranos offers a strong rebuttal to the Journal’s accusations, the public is likely to have questions about the veracity of both sides. Despite Holmes’ confident assertions, the Journal remains unmoved, arguing that they stand by their reporting. The Journal’s refusal to investigate further, including declined access to Theranos’ technology, casts a shadow over their reporting and leaves the public to determine whether their claims are fair and accurate.
The clash between Theranos and the Wall Street Journal highlights the inherent tension between innovation and scrutiny. Theranos is attempting to disrupt the status quo in the healthcare industry, which naturally invites skeptics. This controversy also underscores the importance of transparency in the world of scientific and medical advancements. As Theranos continues to navigate this difficult stage, it’s critical for them to provide clear and concrete evidence to back up their claims and demonstrate the legitimacy of their technology. The public deserves answers, and the future success of Theranos depends upon providing them.
