Promising technique for blood analysis without the use of a needle, after all, does not work. Investigations by the FDA, Medicare and Medicaid are already underway and Walgreen has entered into a partnership with the laboratory. More recently, hedging San Francisco fund , Partner Fund Management LP, sued by Theranos for lying to attract investors.
Elizabeth Holmes , founder of Theranos , announced to the world that she had discovered a revolutionary technique that would reinvent laboratory tests and allow more than 200 blood tests to be performed with just one drop of blood. The news caused a lot of ink, so it wasn’t surprising when, a year ago, Theranos was worth $9 billion. This made Holmes , who owns 50% of the company, top Forbes’ list of America’s richest women entrepreneurs. From the moment of the announcement to the present, Theranos has been involved in several scandals, which led a group of investors to reassess the company’s value, depreciating it from 9 billion to 800 million dollars.
Startup problems multiply. Holmes developed the Steve Jobs tactic and led the company enveloped in a cloak of secrecy. If the promise was to perform exams without the use of needles and make a profit from a drop of blood that would be used for hundreds of different tests, from cancer to cholesterol, the reality was quite reductive: little more than a dozen results were achieved. Even the discussion of these results was widely discussed, given the lack of publication of studies and research. Following the issues raised, Theranos submitted for approval to the Food It is Medicine Administration (FDA) a test for herpes, something that would prove that the technology was working. This would be the first of more than a hundred approvals. The result was completely the opposite, as the FDA imposed so many restrictions that Theranos was forced to suspend testing.
Theranos was accused of fraud, the very statement that it would be just a drop of blood was found to be false . The technology only requires 3 small vials, much less than the 6 large vials that are normally needed, but still more than a drop. Despite the lack of convictions and despite not having had his license revoked by Medicare or Medicaid , he is under investigation after errors were detected in blood tests. The largest pharmacy chain in the United States, Walgreens , decided to end its connection with Theranos , which meant the closure of 40 operations in the state of Arizona alone.
The worst challenges Theranos faces now are regaining trust and promises of lawsuits from both patients and investors. Oh partner Fund Management LP took the first step, but others are already on the horizon. Elizabeth Holmes has publicly stated that she believes she will be able to achieve the goals she initially set. In the event of the company’s bankruptcy, Holmes runs the serious risk of being left without a penny, as shareholders and investors will be the first to receive compensation.
