The Theranos Story, ch. 35: Arizona lab in violation, is there a biotech ‘Theranos effect’?

click to enlargeAnd we were starting to grow nostalgic for our Weekly Episodes! One would expect Nary A Peep from Theranos until the lawsuits start to move forward, they set up another Board of Experts, and/or if the Alphabet Agencies (FDA, SEC, DOJ) decide to take their own actions. A short article out of the (thoroughly paywalled) Wall Street Journal, summed up in MarketWatch, confirms that as suspected, the September 2016 Federal inspection of the Scottsdale, Arizona lab turned up multiple lab and patient notification violations. According to a Federal inspection report cited in the WSJ article, lab staff inaccurately configured a machine processing blood coagulation tests; “Theranos additionally failed to verify that devices’ precision or accuracy were in line with their manufacturer’s instructions for tests such as those for blood-glucose, pregnancy and triglycerides.” Patients were not notified of potentially inaccurate diabetes test results. This provides an extra entreé for the dining pleasure of the Arizona Office of the Attorney General (OAG), which last month put out a bid solicitation for outside counsel to assist in planned actions against Theranos for fraudulent blood testing [Ch. 33]. Hat tip to Bill Oravecz of Stone Health Innovations

No Theranos Effect? The biotech, VC and investor community has put on its Game Face and declared everything’s just fine, and move on. Theranos–now seen as an outlier. After all, they didn’t present their data and kept everything tightly under wraps. (But two years ago, who questioned that? Few.) Unicorns continue to romp, with the Business Insider article mentioning Samumed’s $12 billion valuation for alopecia and wrinkle drugs, none past Phase 2 clinical trials, plus others like Neon Therapeutics and Unity Biotechnology with sizable raises. So no more Theranoses…till the next time.

See here for the 34 previous TTA chapters in this Continuing, Consistently Amazing Saga.

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