Overhyped second black turtle neck

 

Today I happened to see one news came on ‘The Wall Street Journal’. The news on the trial of Elizabeth Holmes, the second ‘Steve Jobs’.

Whenever I read about Ms. Holmes, I feel like reading a thriller novel. I have been thinking about writing the story of Ms. Holmes for 2 years. Now it’s the perfect time to write. I may miss some parts. But It will be a good time reading.

So, Let’s start...

3 February, 1984, Washington, D.C., Elizabeth Anne Holmes was born. From childhood onwards her biggest dream was to become a billionaire. 

She was interested in programming during her high school and started her first business by selling C++ compilers to Chinese Universities. In 2002, at the age of 18 she joined for Chemical engineering at Standford University. From the University she went for a tour in China, where she met Ramesh Sunny Balwani, 20 years senior to her. He was a successful entrepreneur and this made her fall for him. On her second visit to china, she was tested for SARS-CoV-1 through the collection of blood samples with syringes. Her story started from there. Upon returning home she decided to come up with new idea to change the world. She didn’t leave the house for five days and couldn’t sleep at night while working on a patent idea. She filed her first patent on a wearable drug-delivery patch in 2003.

After two semesters, she dropped out of the University to become a medical technology entrepreneur. She pitched the idea of “running hundreds of tests from one tiny drop of blood from a fingertip” to her professor of medicine Dr. Phyllis Gardener. Unlike most who encountered Holmes, Dr. Phyllis Gardener was not impressed by her ideas, and said about her in a later interview that- “She has no knowledge of medicine and a rudimentary knowledge of engineering. She thought she knew it all.” However, her advisor Channing Robertson, the dean at the School of Engineering supported her. Many small investors were impressed by her idea and started investing. By the end of the year 2003, she had 6 million dollars in funding. All of a sudden, she changed the idea to cartridge and reader system for blood testing- a ground breaking miniaturized testing device which would deliver faster, cheaper and reliable results. In this, patient will prick their finger, fill blood in a small cartridge and insert it into the machine. The test will perform on spot and the information will be send to the lab via internet where the expert personnel will interpret the data and sent back the report. This replaces costly and time-consuming lab analysis. Traditionally, the procedure involves collecting a syringe full of blood from the vein and sending it to the lab to perform multiple tests using sophisticated machines and the patients had to wait for few days after testing. Theranos thought of scaling down the components of the massive machines to fit into a small box. Practically it was impossible since placing the components in close proximity would interfere their working due to the heat, electrical and magnetic fields created. Medical scientist Dr. Darren Saunders from Sydney University was keenly following the rise of Theranos. He said “she tried to take an entire pathology lab and squish it into a little black box and promise to be able to do all the tests. It takes years to develop a single test up to standard where it can be accurate”.

In 2006, she appointed two groups of engineers to design a new version of the testing machine called ‘Edison’. However, it was not efficient enough to perform all the test claimed by Elizabeth and the test result were mostly inaccurate or misleading.

 

In 2009 Ramesh Sunny Balwani joined the company as second in charge. He came from a software background and knew little about the workings of a medical company. However, money flowing into Theranos was huge.

In 2010 Walgreens and Safeway became partners with Theranos to create wellness centres, the sections in their stores where patients could get blood test. The Edison machine claimed for 192 tests but half was theoretically possible.

There was no peer verification of Theranos technology. However, a review from John Hopkins medical school helped Theranos and Elizabeth Holmes to get more investors. Walgreens and Subway trusted every word she said and they gave a combine 105 million dollar in investment in loans. In 2012, Safeway renovated their store space across the stores in anticipation of Edison machines. But they were only met with constant launch delays and excuses. Holmes knew the power of PR. She gathered a war council to her board. So, no one doubted the company. This included three former U.S cabinet secretaries, two former U.S senators, a retired navy admiral and a retired marine corps general including George Schultz. Elizabeth even used Hilary Clinton as a fundraiser for her 2016 campaign. The company slowly grew to a nine-billion-dollar valuation one and Elizabeth became the youngest self-made female billionaire.

Back in the lab nothing was going right. Former lab associate and one of the key whistleblowers in the Theranos scandal Erica Chung in her TED talk this year shared her experience at Theranos. She said they were producing inaccurate and imprecise results on a consistent basis across many different types of blood test. Erica collected all the evidence and approached higher authorities including George Schultz, one of the board members. But they were all believing Elizabeth. Soon Erica quit Theranos.

Theranos was in a stealth mode with out any press releases or a company website unit the announcement of the in-store blood sample collection centres, in partnership with pharmacy chain Walgreens. Customers could get an in-store blood test off a simple finger prick and get the result in few hours.

A physician turned medical technology entrepreneur ‘Pallav Sharda’ went for the Theranos blood test at the Walgreens. Theranos was not using their Edison machine, instead they were secretly using traditional blood analyzers which required larger amounts of blood. The staffs were ordered to dilute the blood samples and this generated invalid and misleading results. Pallav was diagnosed pre-diabetic. However, his own Doctor was suspicious of the diagnosis and recommended for another blood test from a regular lab after two days. As expected by the Doctor, Pallav was completely fine and Theranos blood test result was misleading.

In 2014 fortune magazine released front page story titled ‘This CEO is out for blood’. Her fame sky rocketed after this. Forbes, USA today, NPR, fox business, CNBC, CNN and CBS news all took their turn to cover the success story of youngest self-made female billionaire. Barrack Obama made Elizabeth the US ambassador for global entrepreneurship. 

In 2015, Joe Biden, then Vice President visited Theranos labs as part of healthcare simmit and said "This is sort of the laboratory of the future". But everything was fake. The company was able to mask the real situation in labs by showing as many black boxes they could find.

In the same year an investigative journalist John Carreyrou from the Wall Street Journal exposed the sham by publishing a bombshell article with the testimonies of Dr. Phyllis Gardner, lab associate-Erica Chung, Pallav Sharda and many more. He detailed the inaccuracies with the Edison device, revealing that the company had been using commercially available machines for blood testing. Carreyrou later published a book in 2018 titled ‘Bad Blood: Secrets and Lies in a Silicon Valley Startup’.

After the story got published, people started questioning Theranos and its secrecy. Soon FDA made a surprise inspection at the company. Further investigations found that Theranos machine performed 12 out of the 250 test claimed and even those produced inaccurate results. Investors started suing Elizabeth. However, Elizabeth denied all the truths and responded, "This is what happens when you work to change things, first they think you're crazy, then they fight you, and then all of a sudden you change the world."

In July 2016, Holmes was banned from owning, operating, or directing a blood testing service for a period of two years. Theranos appealed that decision to a U.S. Department of Health and Human Services appeals board. The company once valued at nine billion dollars was now zero. Theranos was finally dissolved in 2018.

Elizabeth and her ex-boyfriend are now in the midst of a delayed criminal trial for defrauding investors, patients and doctors and could be jailed for up to 20 years if convicted. As she awaits trial, Elizabeth got engaged and married to William "Billy" Evans, a 27-year heir to a chain of hotels in California. The trial has been pushed so many times because of covid and then the news she was expecting her child.

Everyone is saying this might be her strategy to garner sympathy to try to keep herself out of prison. But anyway, her story will come to a climax on 31 August, this month.

I am also waiting to see how her story ends. The below video is John Carreyrou explaining the Elizabeth’s story in short.