The Theranos Story, ch. 18: Is the ‘miniLab’ the Real Edison, or The Great Oz 1.0?

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/04/Yak_52__G-CBSS_FLAT_SPIN.jpg” thumb_width=”150″ /]Is the Great Oz Behind the Curtain? Updated for The Box and additional articles. Before a skeptical audience Monday afternoon at the American Association for Clinical Chemistry‘s (AACC) annual meeting in Philadelphia, Theranos‘ CEO Elizabeth Holmes, due to be banned from the industry by CMS for lab violations, unveiled a new lab technology. According to Ryan Cross in the MIT Technology Review, “Holmes claimed her company had developed a sophisticated “miniLab” capable of carrying out an array of tests, including detecting the Zika virus, from a finger prick of blood.” A cube-like box, developed in secrecy, she called it a “single platform” able to carry out a wide array (or several–depending on what quote you read!) of different test types using small volumes of blood (apparently finger sticks). The device will be small, portable and directly connected to the internet to centrally send and verify test results. Ms Holmes actually took questions from a three-person scientific panel. When asked if she would be sharing the device with other researchers, she said she was “working on it right now.” It is not, of course, FDA-approved or in production.

Updated for video and new articles (as of 8/19/16).

  • MedCityNews’ Stephanie Baum must have some OSS/CIA blood in her, because it appears she’s beaten everyone on the miniLab Box picture plus posting the Theranos presentation video, which went up via AACC’s YouTube site within hours of the presentation. Other commitments prevent me from an analysis of the hour until later, but gone is the black turtleneck, remaining is the talent for tap dancing around hard facts. The comments in the article and from elsewhere echo the profound skepticism and cynicism found in the MIT and WaPo articles. Yes, the ‘Sympathy for the Devil’ intro was dark humor, served up the way we like it!
  • Bloomberg interviews attendees (scientists, clinical directors, professors, doctors) who believe they were baited and switched. The bait was the justification for Edison performance. The switch was The Box–a new technology, untested, untried and not even peer reviewed–that simply crunched down multiple existing tests into one container.
  • (Updated 8/19) AACC’s published article was short and straight up. “(Dr Steven) Master told Holmes that her data “fell far short” of what he expected based on the wide menu that Theranos promised previously.” Plenty of promises from Ms Holmes at the end, but if CMS has their way, which is likely, Ms Holmes’ “I’ve made the decision to double down and stick by it no matter how hard the path” and to be involved with AACC in the future, will be more empty Theranos promises.

Also WaPo, TechCrunch and POLITICO Morning eHealth

Is Theranos–and Ms Holmes–too far ‘gone’ to be credible or funded? Will there even be a Theranos company to develop this? Will Ms Holmes remain in the business through successfully appealing her imminent ban? The only sensible conclusion is that we’ll believe the technology–and her–when we see it is properly and independently verified–and operated by a company with proper governance and controls.

Stay Tuned to See if The Fix Is In.

Thumb through the prior 17 chapters of the Theranos Story here. Hat tips to @EdifInstruments and Editor Chrys Meewella for the links (WaPo and MIT respectively).

The Theranos story, ch. 17: closing the barn door after the horse

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/04/Yak_52__G-CBSS_FLAT_SPIN.jpg” thumb_width=”150″ /] And it may work, though the horse is in the next county. Late last week, with American eyes elsewhere, Theranos announced that they hired two executives with regulatory responsibility–a chief compliance officer and an VP regulatory and quality–and formed a new board committee focused on same. The CCO is Dave Guggenheim, the former assistant general counsel for regulatory law at HIT/medical distribution giant McKesson. The VP, Daniel Wurtz, comes from a similar senior director position at biotech Thermo-Fisher Scientific.

The country maxim, ‘closing the barn door after the horse has bolted’, applies. In fact, the horse is in town and having a growler of beer at the local tavern. The Newark, California lab is shut and the principals, including the CEO Ms Holmes, are technically prohibited from operating a lab for at least two years (that means you, Ms Holmes) starting in a month. Messrs Guggenheim and Wurtz (or similar) should have been on board years ago. Even small companies in our field realize they HAVE to do this!

This also doesn’t affect the interesting interest that DOJ and SEC have in Theranos. [TTA 10 July]

However, this Editor will take the contrarian view that somehow, some way, the ‘fix’ is being worked out, if not in. Don’t make reservations for the fire sale quite yet. The ban on Ms Holmes won’t take place for another month, minimum. That gives time for David Boies, their legal supremo, and his firm to stall for more time, and time for some calls to ask favors from friends, of which he has many in this administration. More than likely, Boies on behalf of Theranos will appeal the CMS rulings to an administrative judge. Ms Holmes may take the hit, but may get a handsome payday to depart despite her reported control, if the investors can salvage something out of the company.

At HQ, they may be rehearsing saying ‘mea culpa, mea culpa, mea maxima culpa’ three times, kneeling deeply, in preparation to Going Forth And Sinning No More.

The Object Lessons taught by the Theranos Troubles, to us in healthcare tech, continue.

WSJTheranos Hires Compliance, Regulatory Executives  (more…)

The Theranos Story: now as a cartoon strip, not so ‘funny as a heart attack’ lawsuit

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/04/Yak_52__G-CBSS_FLAT_SPIN.jpg” thumb_width=”150″ /]The absolutely funniest take that this Editor has seen is a funny paper–literally a (scroll down) cartoon strip that serializes the Theranos story. ‘The Rise and Fall of a Health Care Tech Unicorn’ lampoons CEO Holmes’ dropping out of Stanford, the Rube Goldberg-esque (=UK Heath Robinson) Edison Machine to the Wall Street Journal Exposé. $9 billion to $9. Depicted by Fiore for KQED San Francisco’s Future of You blog.

Unfortunately, for one now-plaintiff, Theranos isn’t funny at all. According to a lawsuit filed Monday in the US District Court in Arizona against both Theranos and Walgreens Boots Alliance, the patient’s doctor-ordered blood lipid and sugar levels came back normal. Based on these results, the doctor recommended remaining with ‘R.C.’s  medication regimen. Less than one month later, R.C. suffered a heart attack, requiring surgery to implant two stents in his arteries. The additional blood testing led his doctor to believe that the Theranos results were dangerously inaccurate. These were the same results which were voided in May [TTA 19 May]. This is the ninth lawsuit over Theranos’ testing.

The sanctions which will close Theranos’ labs and prohibit Ms Holmes from the lab testing business will take effect 5 September, according to Ars Technica. (Article includes PDF of the court filing)

Theranos denouement: CMS closes lab, fine, 2-year ban on Holmes (breaking)

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/04/Yak_52__G-CBSS_FLAT_SPIN.jpg” thumb_width=”150″ /]Breaking News. Theranos has been slapped very soundly by the Centers for Medicare & Medicaid Services (CMS) for violations arising from operations at their Newark, California laboratory. The fine is not disclosed. CMS has revoked the lab’s certificate and also prohibits the owners and operators of the lab from operating a lab for at least two years. That means that Elizabeth Holmes, the CEO, her management and anyone immediately involved with the Newark lab is effectively out of a job.

As the Theranos press release was issued well after hours Thursday night US Eastern Time, there’s no mention of the board actually removing her, but that is another shoe that this Editor expects to drop sooner, not later. COO Sunny Balwani was removed in May [TTA 19 May] Who is not tainted who can actually run the company? Is there a capable person in the industry who wants to touch it? As has been revealed, Ms Holmes still controls the company [TTA 27 Apr].

The revocation will be in effect in 60 days, according to the Wall Street Journal*, but the Newark lab has been closed. There is no mention of the Palo Alto lab which was also under scrutiny [TTA 20 Apr].

The details appear to be lifted or nearly lifted from the CMS order, and are quoted directly from the Theranos release: (more…)

Theranos flunks CMS review. Is there a there, there?

There is no kinder way to put it. The impression that Theranos is equivalent to what writer Gertrude Stein said of her vanished home in Oakland, California–‘there is no there there’–is building. The US Center for Medicare and Medicaid Services (CMS) after multiple inspections in 2014 and 2015, found that the company failed its own standards on its proprietary Edison blood-testing and analysis system. Cited by the Wall Street Journal, which had access to the full 121-page report, is that “erratic quality-control results for Edison-run tests were frequent in July 2014 and from February 2015 to June 2015.” Overall, Edison devices produced test results that differed widely from traditional lab machines for the same blood samples. Additional problems were unqualified staff, blood samples at the wrong temperature and delays in notifying patients of flawed tests.

Theranos has promised to make further corrections at its Newark, California testing site but it may be too late. “CMS has deemed the company’s plan inadequate and plans to impose sanctions against Theranos, according to people familiar with the matter. In January, the agency said the punishment could range from fines to suspending or revoking the lab’s certification to legally test human samples.” (WSJ)

No stronger case has been made for an early-stage company under-promising and over-delivering than this, especially in health. There is no joy in hearing the grand slam of its $9 billion valuation cratering, but on the other hand, there are a lot of other worthy startups and early-stage companies which could have used the funding. A high profile fail such as this scares off investors from angels to VCs worldwide and tarnishes the entire health tech sector as well as young entrepreneurs. Also many of us looked forward to inexpensive, retail driven, minimally sampled blood testing.

In this Editor’s view, the wide-eyed CEO Elizabeth Holmes should attend more to the integrity of her company’s operations and less to working political connections such as Hillary Clinton fundraisers (last month) and putting everyone from Henry Kissinger, George Shultz and retired Marine Gen. James Mattis on the company’s board of governors (BioSpace). In Marine-speak, knock it off.

Ed. note: If the WSJ is paywalled (search on the headline “Theranos Devices Often Failed Accuracy Requirements” to get around it), see BioSpace. Previous coverage in TTA here.

Update 7 Apr: Some effort in the operations integrity area was made with another Theranos announcement of eight Scientific and Advisory Board members appointed (only two with any previous connection to the company) and three scientific review sessions at their Palo Alto HQ. MedCityNews

Is Theranos’ ‘blood testing for all’ a responsible selling proposition?

Theranos’ recent troubles on their blood testing (Walgreens halting expansion, FDA halting nanotainers as ‘uncleared medical devices’ and last week chain grocery/drugstore Safeway dropping their $350 million deal for 800 locations) have been well covered in media both here and elsewhere. But what if their Unique Selling Proposition–that people should have the ‘basic human right’ to order up their own inexpensive blood tests and then be responsible for their own interpretation–is counter-productive for many patients? After all, it’s what Theranos has been organized and raised $400 million+ on. Dr Robert Wachter of UCSF, who is no top-down Ezekiel-esque ‘nanny stater’, lends a caution: “There are a lot of companies, including Theranos, that have an interest in making you believe that more data will magically make you healthier. It won’t, at least not in the short-term.” When is ’empowerment’ confusing without recourse to interpretation? Some results are easier to read than others. Does having the data make the average person healthier for real? Personally, this Editor would welcome the ability to walk into her local Walgreens and order up a few to see what’s up–but then again she can do her own research and ask a doctor or nurse to help. Who can (inexpensively) close the interpretation gap? Theranos is wrapped in scandal but goes hard to change laws to its advantage (Mashable)

Theranos/FDA update: nanotainers are ‘uncleared medical devices’

And the battering of their USP continues. On the heels of Walgreens Boots Alliance (which this week proposed a merger with #3 Rite Aid to create the largest by location US drugstore chain) putting a screeching halt on expanding its 41 Theranos testing locations, the FDA has told Theranos that its nanotainers are actually ‘uncleared medical devices’ which further violate because they are being shipped over state lines. The company was also scored on handling complaints poorly, keeping poor records and failing to conduct quality audits including on the manufacture of the nanotainers. These were revealed on redacted FDA Form 483s filed as a result of a month-long inspection ending in mid-September, which were published per a Freedom of Information Act (FOIA) request. According to MedCityNews, the nanotainers were mistakenly classified as Class I and not II. Fortune quotes one of the reports: “The design was not validated under actual or simulated use conditions,” (more…)

Is Theranos a $9 billion question mark?

Breaking News. According to an exposé published yesterday in The Wall Street Journal*, low-cost and fast growing small sample blood testing company Theranos [TTA 28 Aug] is not ‘doing what it says it does’. Four former employees allege that Theranos’ testing system, dubbed the Edison, which processes small finger-pricked blood samples collected in ‘nanotainers’, only handles a fraction of the tests claimed–19 out of 205. In a complaint to regulators, one Theranos employee accused the company of failing to report test results that raised questions about the precision of their proprietary Edison system–and that most of the tests were being run on traditional testing machines which required dilution of the tiny samples. The article reports on serious questions which have been raised on the accuracy of the Edison testing versus conventional testing, including the integrity of finger-pricked blood and sample dilution. Gaps in results were seen last year on tests for vitamin D, two thyroid hormones and prostate cancer, though Theranos has been reporting its tests to CMS in a process that all labs go through called proficiency testing, and has one test for herpes that has been FDA cleared.

In a follow up article, Theranos reportedly is no longer collecting nanotainers except for the FDA cleared herpes test.

Theranos is currently valued at $9 billion and has raised over $400 million in VC funding.

According to the first article, British biochemist Ian Gibbons, (more…)