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Julia Belluz digs into the now-familiar "amazing origin story" of Theranos and Elizabeth Holmes:

Holmes, the company's founder, dropped out of Stanford as a sophomore in 2004. She said she'd started the company both to address her phobia of needles -- one that she realized many people shared -- and out of the desire to help people diagnose potential diseases faster and at more accessible prices.

Over the next decade, Holmes managed not only to get her own Stanford professor and mentor on board, but also to attract $400 million from venture capitalists, and assemble a star-studded board that included former US Secretaries of State Henry Kissinger and George P. Shultz.

Holmes became "one of the youngest self-made billionaires around" without having to deliver solid results:

Two years ago, the company started offering blood tests that it claimed required only a finger prick -- and could deliver results of up to 30 tests in hours using its own lab testing instrument (called "Edison machines"). In numerous interviews, Elizabeth Holmes, the 31-year-old founder of the company, argued that this technology would be revolutionary, slashing costs in the $75 billion-a-year blood testing industry. Investors and media loved it, and last year the company was valued at $9 billion.

"But recently," Belluz continues, "Theranos has started attracting doubters and critics"--including a prominent WSJ feature alleging false claims:

Theranos has allegedly been collecting blood samples the traditional way and then diluting them so they could be run on machines made by other companies -- not their much-hyped Edison technology.

What's more, the Journal's investigation, as well as a follow-up story, suggested there were major concerns about the accuracy of Theranos's test results. It's a messy story, full of wild claims and regulatory clashes.

More questions emerged regarding the lack of FDA and the absence of peer-reviewed results, and Belluz concludes that "This whole episode should be a cautionary tale:"

If a secretive tech company is claiming to revolutionize an entire industry with technology that still hasn't been validated, be skeptical.

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This page contains a single entry by cognitivedissident published on October 20, 2015 4:28 PM.

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