The Theranos Story, ch. 66: Walgreens and Safeway aren’t investors, they’re business partners!

October 8, 2020 | by

The difference is not hair-splitting in the defense effort to have charges tossed. In Federal District Court on Tuesday (6 October) in San Jose, Elizabeth Holmes’ defense made the case to Judge Edward Davila on dismissing some of the prosecution’s charges against her. As petitioned in late August, the defense maintains that two of the entities, Walgreens Boots and Safeway (a Western regional supermarket chain), were unfairly classified as investors versus ‘business partners’. As investors, the prosecution could charge Holmes with fraud crimes with a longer statute of limitations. If they were to be classified as business partners and ‘transactions’, while there were crimes committed, the statute of limitations has expired.

The prosecution’s rebuttal is that Walgreens and Safeway could be considered as both investors and partners. The defense response was that the government took too much time to file the charges and failed to get the proper consent, which may be the hair that splits the ability of the prosecution to use these charges.

Let’s look back at both companies’ involvement with Theranos. 

  • Walgreens reportedly invested over $140 million in Theranos. This consisted of direct funding (a $40 million loan convertible into equity), and an “innovation fund’ designed to fund the rollout of Theranos Wellness Centers in Walgreens US locations starting in 2013. Walgreens filed suit against Theranos in November 2016 to recoup that investment based on breach of contract, after civil lawsuits were filed against them jointly, halted development, and settled for $25 to 30 million in late July 2017 when Theranos assets were dwindling to barely breathing status [TTA 3 Aug 17]. More details on their Partnership from Hell are recapped here from the 2016 lawsuit.
  • Safeway’s involvement as the exclusive supermarket partner was planned to be even more extensive. Their 2012 deal was $350 million for building 800 clinic locations in Safeway stores. This was dropped in November 2015 [TTA 20 Nov 15], around the same time as Walgreens halted the expansion of the Theranos Centers. According to reports at the time, Safeway had already built out the 800 locations, later repurposing them for flu shots and similar. Direct investment was estimated at $10 million (WSJ). Safeway settled with Theranos for $30 million in June 2017. 

The publicly available history shows that both funded Theranos directly in addition to being business partners. Both took substantial additional risk investments from building out facilities to showcase Theranos’ services for their customers. Both settled civilly for amounts far below the fair recoupment of their investment.

While this sounds like legal nitpicking, the defense strategy, in this Editor’s layperson’s calculation, is to erode the number of charges against Holmes and their seriousness so that her inevitable sentence becomes lighter. Another move in this vein is the mental defect defense [TTA 18 Sept] alleging Holmes’ psychic inability to discern right from wrong in her business dealings. Start with something over the top like ‘insanity defense lite’, and then chip away at the rest of the charges. Fox Business, Mercury News. 

News roundup: Amwell’s socko IPO raises $742M, Walmart and the Clinic Wars, Taskforce on Telehealth Policy report released, Israel’s Essence releases fall detection sensor system

September 18, 2020 | by

Telehealth bullishness shows no sign of diminishing. On Wednesday, Amwell‘s (the former American Well) IPO stunned markets by not only debuting at $18 per share (a price only large investors received) but also opening at $25.51 on the NYSE (AMWL) and floating more than 41 million shares for a raise of $742 million. If underwriters exercise all their options, the raise could exceed $850 million. Only last week, the SEC filing projected a sale of 35 million shares at $14 to $16 a share. Back in August, the raise was estimated to be only about $100 million. (One could consider this a prime example of ‘sandbagging’.) Friday closed at $23.02 in a week where Mr. Market had a lot of IPOs and hammered traditional tech stocks. As reported earlier, Amwell is backed by Google via a private placement and also Teva Pharmaceutical.

Smaller and lower profile than Teladoc, Amwell provides services for 55 health plans, 36,000 employers, and in 150 of the nation’s largest health systems, with an estimated 80 million covered lives. Like Teladoc, Amwell has yet to be profitable, with 2019 losses of $88 million and $52 million in 2018. FierceHealthcare, Marketwatch. Meanwhile, the Teladoc acquisition of Livongo has gone quiet, as is usual.

The Clinic Wars continue. Another front in the consumer health wars (and repurposing retail) is more, bigger, better clinics onsite. CVS drew first blood early this year with the expansion of MinuteClinics into fuller-service HealthHUBs, with a goal of 1,500 by end of 2021. Walgreens flanked them with 500 to 700 Village Medical full-service offices [TTA 9 July]. In this context, the expansion of Walmart Health locations looks limp, with their goal of 22 locations in Georgia, Florida, Arkansas, and Chicago metro by end of 2021. Another concern is with scale and modularizing the Walmart Health locations’ construction via constructor BLOX,  One wonders with recently reported layoffs of 1,000 at corporate and the replacement of industry innovation veteran Sean Slovenski with Lori Flees, whether there’s some radical rethinking of their clinic business investment as not mass but targeted to underserved areas that avoid CVS and Walgreens. FierceHealthcare, Walmart blog  CVS also announced the doubling of their drive-thru COVID-19 testing sites to 4,000 by mid-October. FierceHealthcare

More Weekend Reading. Here in the US, the Taskforce on Telehealth Policy, a joint effort between the National Committee for Quality Assurance (NCQA), the Alliance for Connected Care, and the American Telemedicine Association, has issued a report that focuses on maintaining quality care, fitting telehealth into value-based care models, enforcing HIPAA for patient privacy, and ensuring widespread and equitable access to broadband and technology. The involvement of the NCQA is a major step forward in advancing policy in this area. Press release/summary, Report page, Powerpoint slides, and webinar recording  Hat tip to Gina Cella for the ATA.

New entrant in passive fall detection. Israel’s Essence SmartCare is launching MDsense, a multi-dimensional fall detection solution for the residential market. It is sensor-based, using wall mounted intelligent sensors rather than wearable devices that statistically are not worn about half of the time and have their own well-documented performance concerns. The release also mentions it can differentiate between multiple persons and pets, which this veteran of QuietCare would like to see. MDSense is part of Essence’s Care@Home system which uses AI and machine learning to continuously collect actionable data to respond to fall events and manage care better towards improved outcomes.

The Theranos Story, ch. 61: Elizabeth Holmes as legal deadbeat

October 9, 2019 | by

Did her lawyers expect otherwise? This weekend’s news of Elizabeth Holmes’ legal team at Cooley LLP withdrawing their representation services due to non-payment should not have caused much surprise. Cooley’s attorney team petitioned the court to withdraw from the case, stating that “Ms. Holmes has not paid Cooley for any of its work as her counsel of record in this action for more than a year.”

Cooley was representing Ms. Holmes in a class-action civil suit in Phoenix brought against her, former Theranos president Sunny Balwani, and Walgreens, charging fraud and medical battery. (When they withdraw, will she seek public representation based on poverty?)

Perhaps Ms. Holmes is the one who’s setting priorities, as the civil suit would be for monetary damages, and no money means there will be none for the plaintiffs to collect. The DOJ charges are a different story. She is on the hook for nine counts of wire fraud and two counts of conspiracy related to her actions at Theranos. Conviction on these could send her to Club Fed for 20 years plus a fine of $250,000 plus restitution for each charge. [TTA 16 June]. 

Last Wednesday, both Ms. Holmes and lawyers for her and Mr. Balwani were in Federal court in San Jose on the wire fraud and conspiracy charges, demanding that the government release documents from the Food and Drug Administration (FDA) and the Centers for Medicare and Medicaid Services (CMS) that allegedly would clear them. After an hour, Judge Davila set 4 November as the next hearing date. 

Defending oneself does not come cheap, but after your company’s value crashes to $0 from $9bn, one might be looking for change in your Roche-Bobois couch and wondering if your little black Silicon Valley-entrepreneur formal pantsuit/white shirt ensembles will last through the trial. CNBC 2 Oct, CNBC 4 Oct, Fox Business, Business Insider

DNA-based personalized food choices to prevent Type 2 diabetes onset in test with Imperial College, London and Waitrose (UK)

October 18, 2018 | by

Can DNA analysis and an app help prevent Type 2 diabetes onset in the pre-diabetic? The problem of preventing Type 2 diabetes in people determined to be pre-diabetic is multi-factorial, but one approach is diet to control 1) obesity and 2) improve glucose regulation. DnaNudge, which has developed a DNA analysis from a cheek swab, is being used in a clinical trial conducted by Imperial College London’s NIHR (National Institute for Health Research) Imperial Clinical Research Facility to determine whether DnaNudge’s scanner and app, used while shopping at Waitrose & Partners stores, can prevent the development of Type 2 diabetes in prone individuals.

To this Editor’s knowledge, this is the first time that personalized DNA testing and an app have been used in conjunction with retail food choices.

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2018/10/MyDNA-Report-Sample.png” thumb_width=”125″ /][grow_thumb image=”https://telecareaware.com/wp-content/uploads/2018/10/product-feedback-recommended.png” thumb_width=”150″ /]How it works is that the individual’s DNA is analyzed first and then used to match what food choices are best for that person via a simple thumbs up or down indicator on the app. 

  • Using a sterile cotton swab, users sweep the inside of their cheek to capture a sample of saliva.
  • The swab is inserted in a processing cartridge plugged into the DnaNudgeBox, a small instant DNA analyzer
  • The analysis of specific genetic traits related to nutrition is completed in minutes and uploaded to the DnaNudge app on the smartphone via a wearable ‘capsule’, the DnaBand (left #1)
  • The wearer then can scan individual food items as that person shops, receiving the ‘thumbs up’ for good choices and ‘thumbs down’ for ones not so good, with alternatives suggested for the latter (left #2)

The 12-month clinical trial was launched last week, with Waitrose contacting customers in the North London area with information on how to take part. Professor Nick Oliver from Imperial College London, who is leading the clinical study at the NIHR Imperial Clinical Research Facility, stated in the release: “This key trial with DnaNudge allows us – for the very first time – to study in detail the outcomes of DNA-personalised food choices for pre-diabetic individuals, and to explore whether this type of accessible technology can deliver a proactive and sustainable solution to managing nutrition, and preventing the development of Type 2 diabetes in people at highest risk of this long-term condition.” It is not clear from the release whether there’s further information provided on the food choices or other education.

DnaNudge was co-founded by Regius Professor Professor of Engineering at Imperial College London Chris Toumazou and published geneticist and leukemia researcher Dr. Maria Karvela. Waitrose has staked out a healthy food position with the introduction of 100 Healthy Eating Specialists, shop floor specialists who direct customers who ask towards healthier choices. This tie-in is interesting, and if it works, this Editor can see it in use in a CVS-Aetna test or Walgreens, as both have edged into food retailing in many locations, albeit with not many apparent healthy choices, unless one considers Milky Ways fine food.

The Theranos Story, ch. 55: ‘Bad Blood’s’ altered reality on ‘Mad Money’; it was all Bad Blitzscaling

August 29, 2018 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2018/07/Rock-1-crop-2.jpg” thumb_width=”150″ /]

She lied and the lies got bigger and bigger and eventually the lies got so big relative to reality that it became a pretty massive fraud. 

The hyperbolic Jim Cramer of CNBC’s ‘Mad Money’ settled down for a chat with John Carreyrou, the author of ‘Bad Blood’, to dissect what Mr. Cramer touted as ‘the best business book since Phil Knight’s book about starting Nike, ‘Shoe Dog”. Mr. Carreyrou outlines Elizabeth Holmes and Sunny Balwani went ‘live’ with fingerstick tests far too prematurely, burned through money, lied to the board, and (schadenfreude alert!) lied to attack dog David Boies, her attorney. There was also a real lack of ‘due diligence’–real diligence–on the part of companies like Safeway and Walgreens. A reveal coming out of this interview is that Walgreens hired a lab consultant, Kevin Hunter, as early as 2010, who ‘smelled a rat’ even then–and Walgreens executives ignored him, frightened that Ms. Holmes would go to CVS. Wrapping Ms. Inexplicable Me up, Mr. Carreyrou attributes her mindset to ‘noble cause corruption’; she really did believe that her blood testing machine would do good because the outcome would be good for society. Thus every corner cut was justified….which explains a lot, but really excuses nothing. The ten-minute video is over at ValueWalk (the transcript is only partial).

LinkedIn’s hyperbolic co-founder Reid Hoffman, like him or not, does have a way with words, and this article in Fast Company is a decent discussion of a new term that he actually coined, ‘blitzscaling’ which is pursuing rapid growth by prioritizing speed over efficiency in the face of uncertainty. It’s quite a lure he sets out to his classes at Stanford, that the only way to have a successful business in winner-take-all (or most) markets is to do this, and if you do it right you’ll have the next Google, completely ignoring the fact that 99.99 percent of businesses don’t need to change the world, just to get to breakeven, get to profitability, and endure (or get bought out). He springboards off this to where Ms. Holmes and Mr. Balwani Went All Wrong. The answer? Product failure=Mortal Risk–to the patient. They needed to meet a Walgreens deadline thus went out prematurely with their nanotainer testing knowing it did not work. The best quote in the article?

There’s a big difference between being embarrassed and being indicted.

The Theranos Story, ch. 50: DOJ indicts Holmes, Balwani for fraud (updated)

June 16, 2018 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/11/jacobs-well-texas-woe1.jpg” thumb_width=”150″ /]The other shoe drops into this bottomless well. If Elizabeth Holmes and Sunny Balwani thought that the March SEC action [TTA 15 Mar] would be it, they were misinformed. Today, the Department of Justice, US Attorney’s Office for the Northern District of California, charged them with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. According to CNBC, they were arraigned in US District Court in San Jose Friday morning. Both were released on $500,000 bond each and ordered to surrender their passports. Holmes’ parents appeared with her in court.

If found guilty, both Ms. Holmes and Mr. Balwani face up to 20 years in prison, plus $250,000 in fines and clawing back of investor funds. 

“Wire fraud” in US law is fraud that is enabled and takes place over phone lines or involves electronic communications. By appearing online, making phone calls, emailing materials such as marketing materials, statements to the media, financial statements, models, and other information, Ms. Holmes and Mr. Balwani defrauded potential investors. Patients and doctors were defrauded by ads and other types of solicitations to use Theranos’ blood testing services at Walgreens, despite the fact that they knew the test results were unreliable.

Both Ms. Holmes and Mr. Balwani will have plenty of time to explain their sincere belief that their test devices and methods would be validated with time…but they had to, in Silicon Valley parlance, fake it till they made it. Indictments of this type take about two years to conclude, especially if they are big (as a formerly $9 bn valued company is) and tangled. Ms. Holmes will undoubtedly release statements on how she is being martyred like Saint Joan, how this doesn’t happen to men in Silicon Valley, and that they are allowed to fail but she can’t. Perhaps she was under the spell of the 19 years-her-senior Svengali Balwani. (Minus the Jobsian black turtlenecks, one anticipates her next choice of wardrobe. Sackcloth tied with a rope? Chain mail?)

Expect the doors to shut soon. Fortress Investment Group, which loaned Theranos $65 million (of a reported $100 million) in December 2017, was reportedly coming for the assets (as they are wont to do) by the end of July, according to the Wall Street Journal and other sources. 

Ms. Holmes is–finally–removed as CEO. Theranos announced that David Taylor, the company’s general counsel, has been appointed CEO as well as general counsel, while Ms. Holmes will remain as founder and board chair. None of this is reflected on their website. In fact, Mr. Taylor is nowhere to be found on the website’s leadership page. 

The estimable John Carreyrou, who broke the story in the WSJ and is the author of Bad Blood [TTA 13 June], on The Street’s Technically Speaking podcast at 06:00 shared this insight on how Theranos got away with bad tests. While both FDA and CMS highly regulate lab testing and the machines that perform them, neither actively police “lab-developed tests, which refer to tests fashioned with their own methods and devices” for blood testing. Basically, according to Mr. Carreyrou, Holmes and Balwani, our Bonnie and Clyde, “drove a truck right thru that loophole and took advantage of it.” Far beyond B&C, $1 bn of investors’ money is the Federal Reserve of banks.

On the indictment: WSJ, CNBC. The Northern District release on the indictment is here. Another essay by Mr. Carreyrou published 18 May is available to those who can get past the paywall. Hat tip to Bill Oravecz of WTO Consultants.

Updated: For additional coverage of what’s next in the legal vein for Holmes and Balwani, see the NY Times on potential defense strategies for the duo, including that they truly believed what they were saying to investors was true and they were bamboozled like everyone else, ‘materiality’–that investors didn’t use the statements as a basis for investing, and ‘prove it’. Will they take a plea deal? Stay tuned. 

The Theranos Story, ch. 47: the post-mortem, blaming–and ghost chasing–begin

March 21, 2018 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/04/Yak_52__G-CBSS_FLAT_SPIN.jpg” thumb_width=”150″ /]Now that Elizabeth Holmes is the former CEO of Theranos, many of the publications who huzzahed their ‘revolutionary’ blood testing system three short years ago are publishing their post-mortem analyses, often of how the wool was pulled over their eyes.

Jenny Gold from Kaiser Health News and NPR has a short ‘alarming’ tale of her press visit in November 2014 to a Theranos testing site at a Palo Alto Walgreens for an NPR feature. At Walgreens, she spoke with patients on the record and was invited to witness their blood draw–not the finger prick Theranos (and Walgreens) promoted, but a standard volume blood draw. After multiple and telling upset reactions from her company press handlers, including demanding Ms. Gold erase her audio recording (!) and accusing her of harassment, alarms went off at the Walgreens store for a non-existent fire. She was baited with an interview with Ms. Holmes–which never happened–and wound up with a corporate attorney instead who made unsupported statements. Ms. Gold canceled her story, which if she tracked the bad smell would have been likely the first press shot across the bow. What this post-mortem tells us is the extent of the coverup and the sheer (and unethical) fawning flackery that appeared in places like the New Yorker, Forbes, Inc., and Fortune.  NPR

The FT further digs into our gullibility, our wanting to believe that someone in a black turtleneck could put the Big Labs out of business,  how we in the press hungered for a new and female Steve Jobs to shake up the status quo. Andrew Hill: “Trouble often hits, though, when leaders stick to their story after it has diverged from reality, swerving into embellishment, mythmaking and, in Ms Holmes’s case, apparently fraud.”

But we were no smarter than those who gave Ms. Holmes and Mr. Ramesh ‘Sunny’ Balwani $700 million in Mad Money. (more…)

Rounding up what’s news: LindaCare, TytoCare funding; Medicare telehealth parity, Norway’s big cyberhack, Virta reversing diabetes, DARPA’s 60th birthday

February 9, 2018 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2017/12/Lasso.jpg” thumb_width=”100″ /]Your Editor’s been away and then largely out of pocket over the past two weeks. Here’s our roundup/catchup beyond the bombshells:

In remote patient monitoring for chronic disease, Philips, PMV, and other investors invested €7 million ($8.6 million) in Belgium’s/Hartford CT’s LindaCare. The Series B funding will accelerate its US expansion of OnePulse for remote monitoring of chronic heart failure and cardiac arrhythmia patients with Cardiac Implanted Electronic Devices (CIED). It is in use in major European hospitals and in US trials, though there is no mention in the release or on their website on CE Marking or FDA clearance/clinical trials. Previously from its 2013 founding, it had €1.6 million in funding. Also Mobihealthnews.

TytoCare, a remote monitoring telehealth/video consult platform which integrates peripherals for a virtual physical exam, raised $25 million in a Series C round led by large Chinese insurer Ping An via their Global Voyager Fund plus Walgreens, Fosun Group, OrbiMed, LionBird, and Cambia Health Solutions. Release. Their total raise is $45.6 million since 2012 (Crunchbase). Their most current partnership is with Long Island-based Allied Physicians Group which is featuring at-home telehealth visits at its pediatric practice in Plainview.

More favorable Medicare reimbursement for telehealth is the subject of four US Congressional bills. The one furthest along is the ‘Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act of 2017’ (S.870), which aims to improve at-home care, increases Medicare Advantage flexibility, gives ACOs more options and expands telehealth capabilities for stroke and dialysis patients. It passed the Senate in September and now goes to the House Subcommittee on Health of the Committee on Energy and Commerce. The effect of all four is on Medicare payment parity with in-office visits, which does not currently exist and is not affected by the various state parity bills on insurance for those below 65. American Well touts a 10-fold growth in revenue, but the likelihood of any of these four bills being signed into law is small, particularly with a pending report from the Medicare Payment Advisory Commission. Becker’s Hospital Review

Norway released at end of January news on an “advanced and persistent” 8 January cyberattack on Health South East RHF. This has both a health breach and military twist.

(more…)

CVS-Aetna: It’s not integrated healthcare, it’s experiential retail!

January 12, 2018 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2017/12/canary-in-the-coal-mine.jpgw595.jpeg” thumb_width=”150″ /]This very interesting take on financial analysis site Seeking Alpha draws another insight from the CVS-Aetna merger–it’s actually part of the rising commercial real estate trend of experiential retail. Here’s the logic. CVS MinuteClinics increase traffic to CVS stores. If they are part of a shopping center, that means those patients might grab a meal, coffee, or shop. Reportedly CVS and Aetna will add nurses and nutritionists, which will further increase attraction, stickiness, and traffic. 

CVS and Walgreens‘ clinics have started, in the new model, to become significant, even anchor, tenants of shopping centers, filling up the empty storefronts left by traditional retail. Doctors’ offices, urgent cares like CityMD, and hospital-run outpatient clinics are filling retail spaces and anchoring new developments. Another part of the experience–fitness clubs, which are also converting vacant office spaces–a line extension increasingly popular with health systems. CVS also bought out department store Target’s drugstores and in-store clinics, which is another model (fill a prescription, buy socks or a TV). Another line extension is partnerships with urgent cares or outpatient clinics, not much of a stretch since CVS already has affiliations with health systems in many areas.

Add telemedicine (Aetna’s partnership with Teladoc) to the above: both MinuteClinics and in-home become 24/7 operations. Not mentioned here is that Aetna can add in-person or kiosk services in CVS stores to file claims, answer questions, or sell coverage.

As this model becomes clearer, big supermarket operators like Ahold (Stop & Shop, Giant), Wegmans, Publix, Shop Rite and others, which have pharmacies in most locations, may ally with or merge with insurers or health systems–or partner with CVS-Aetna. There is also the 9,000 lb. elephant called Walmart, which is 2/3 of the way to an experiential model including nutrition, diet, and fitness (ask any WalMartian). Further insights on how this merger is forcing retailers to adapt are in Drug Store News.

CVS-Aetna could very well be a major mover in experiential retail, which may save all those strip malls. But this article points out, as this Editor has already, that the full shape of what could be experiential healthcare will take years to work and shake out, assuming the merger is approved. Our prior coverage is here.

The ‘health kiosk’ idea is alive and kicking from New York to France

December 15, 2017 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2017/12/Kiosk1.jpg” thumb_width=”200″ /][Photo: NYP] The $40 million+ failure of HealthSpot Station last year [TTA 14 June 16] might have signaled the demise of the health kiosk (telemedicine + multiple vital measurement devices) concept. Basic stations with consumer engagement/mobile tie-ins such as Higi have been gaining traction at retail locations [TTA 30 Mar] such as RiteAid (which bought the assets and IP of HealthSpot) and Publix supermarkets. CVS MinuteClinics in northeast Ohio and Florida have allied over the past two years with Cleveland Clinic and American Well to integrate records and telemedicine. But the kiosk model is gaining a second life with these recent iterations.

  • NewYork-Presbyterian, Walgreens (Duane Reade) and American Well: Kiosks located in private rooms at select Duane Reade drugstores (left above) connect to NYP OnDemand using American Well telemedicine and Weill Cornell Medicine emergency medicine physicians. In addition to the live consult, the patient can send select vital signs information to the doctor using a forehead thermometer, a blood pressure cuff, a pulse oximeter, and a dermascope for a high-resolution view of skin conditions. Pediatric emergency physicians are available through NYP OnDemand weekdays between 6 – 9pm. Prescriptions are e-prescribed to the patient’s preferred pharmacy. The first kiosk opened this week at 40 Wall Street with additional locations to open in 2018. NYP OnDemand telemedicine consults are also available to NY area residents through the Walgreens website. American Well release, Healthcare IT News, MedCityNews
  • H4D (Health for Development): French doctor Franck Baudino wanted to reach those who live in what the French term ‘health deserts’ in their rural areas. Over the past nine years, he developed a booth-type kiosk connecting to a live doctor and with vitals instrumentation. The Consult Station is fully equipped with a wide range of vitals instrumentation, including vision, audio, eye, and blood glucose, functioning almost as a remote doctor’s office. In France, to gain access, all users need do is pop in their carte vitale. Reportedly the kiosks can treat 90 percent of common illnesses. Prescriptions are printed out in the booth. Consult Stations are now in France, Italy, Portugal, Philippines, Canada, Belgium, UAE and were recently cleared by FDA as a Class II device. ZDNet  

The Theranos Story, ch. 34: It’s a conspiracy! It’s a vendetta!

January 20, 2017 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/11/jacobs-well-texas-woe1.jpg” thumb_width=”150″ /]Updated Well, that is what one of her major investors says, and he would know! Just when we thought that a week would go by with not a peep about Theranos, we get three. Peeps, that is.

First, the Conspiracy Theory. This is being propounded by early Theranos investor Tim Draper of Silicon Valley VC Draper Fisher Jurvetson. It was all John Carreyrou’s ‘strange vendetta’ against her, to wit: “Elizabeth is the victim of a witch hunt.” The Wall Street Journal reporter set off a cascade of press coverage that compelled, nay, forced Federal regulators (FDA, CMS, SEC, DOJ) and state counterparts to go after Theranos and CEO Elizabeth Holmes. Mr Draper bluntly accused Mr Carreyrou of doing it for money; “the guy is getting $4 million to continue this charade”, referring to the advance on his book proposal “Bad Blood”. The most nauseating part of the Ars Technica interview is this mock-libertarian rejoinder from Mr Draper: “It’s the press creating a series of events that negatively impact technology, progress and our economy.”

So it was all a mistake, an illusion–there was nothing significantly wrong with the Edison Lab, or Theranos’ business practices! (Hat tip to Bill Oravecz of Stone Health Innovations)

Mr Draper perhaps did not consider that Mr Carreyrou’s reporting blew up the $100 million investment of the WSJ‘s owner, Rupert Murdoch (Ch. 27), not just DFJ’s. And Safeway, Walgreens, Larry Ellison, Cox Enterprises, Bechtel Group….

Second, the belated reporting of deficiencies at the Scottsdale lab found by CMS (Centers for Medicare and Medicaid Services) on 29 September. According to the Wall Street Journal report (co-authored by Mr Carreyrou), “Theranos responded to the inspection findings in Arizona with a plan to correct its lab deficiencies, but the lab regulator in November rejected the plan and proposed sanctions for the Arizona lab as well.”  This preceded the closing of all labs and the ‘refocusing’ of Theranos on the miniLab. Their general counsel stated, “After months of careful consideration, and prior to CMS’s unannounced inspection in Arizona, Theranos decided to close its laboratories.” Usually, these CMS reports are issued after 90 days. Theranos is appealing the sanctions arising from the California lab inspection with an administrative law judge, which include lab license revocation and a two-year ban on Ms Holmes from blood-testing operations.

Third, Theranos announced an eight-person Technology Advisory Board (TAB) to be led by Dr. Channing Robertson and Howie Rosen. The academics, executives, and entrepreneurs will be charged with “reviewing specific Theranos technology initiatives associated with product development, design and deployment” as well as four other mandates. Analogies concerning horses, roads and the status of barn doors come to mind. Release.

And finally another Theranos Washington connection, besides new SecDef and ‘Warrior Monk’ James Mattis, now an alumnus. It seems that the vetting of Betsy DeVos, nominee for Secretary of the Department of Education, uncovered that she has an investment in Theranos of more than $1 million. However, the Office of Government Ethics also reported her whopping earnings of less than $201. Since others like Rupert Murdoch, Bechtel, Walgreens, Cox, and others ponied up $50 to $100 million, hers is a mere bag of shells by comparison. MedCityNews, who has dubbed it the ‘As Theranos Turns’ soap opera. Hat tip to Bill Oravecz of Stone Health Innovations.

See here for the 33 previous TTA chapters in this Continuing, Consistently Amazing Saga, including Arizona’s lawyering up for a prospective Theranos lawsuit (Ch. 33) the firing of 155 remaining staff (Ch. 32), the resignation of now-DOD Secretary General Mattis from the BOD (Ch. 31), and Theranos’ annus horribilis (Ch. 30).

Walgreens partners with Chicago health tech incubator MATTER (US)

December 24, 2016 | by

Walgreens, the US retail pharmacy part of Walgreens Boots Alliance, on 20 December announced its own alliance with Chicago healthcare incubator and innovation community, MATTER. This Editor believes it is the first retail partnership with a health tech-focused incubator or accelerator in the US; most of these partnerships are with angel networks, VCs, health system venture arms or large commercial healthcare partners such as Qualcomm, Allscripts or GE Healthcare. Walgreens’ contribution will be to mentor and collaborate with MATTER entrepreneurs. Reportedly they have or have had more than 150 startups in their program. They are also part of Chicago’s push to slice itself some health tech cake versus cities like San Diego, Palo Alto, Dallas, Boston and New York via the recently launched Health Care Council of Chicago (HC3), which was co-created by MATTER and Leavitt Partners. Hopefully, Walgreens will get some of their $140 million back via their Theranos lawsuit ending their blood testing misadventure [TTA 17 Nov, Ch. 24] and spread their bets with legitimately promising startups. Press release, ChicagoInno

The Theranos Story, ch. 29: Blame the scientists! Bring on the lawyers!

December 23, 2016 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/11/jacobs-well-texas-woe1.jpg” thumb_width=”150″ /]It was the fault of the scientists and the investors! That is the speculation of Quora poster Drew Smith, a former R&D director at biotech firms MicroPhage and SomaLogic. It was a round robin of founder/CEO Elizabeth Holmes’ all-too-rosy forecasts and scientists not wanting to toss a wet wool blanket on the fun by telling her what she didn’t want to hear. Mr Smith, from where his experience lies, believes that the scientists discarded the testing with bad results, passing on only the good even if flawed, in a delusional circle that ultimately went pear-shaped. Then there were the investors, who didn’t apply the usual Deep Discount to the Big Hype that all entrepreneurs weave around the Revolutionary Whatevers, for whatever reason. On this, Mr Smith doesn’t speculate. It must have been those wide-screen blue eyes, black turtlenecks, and nanotainers that kept them mesmerized. Theranos wouldn’t be the first company that failed because they believed their own press releases and pictures! Forbes  Hat tip to reader Bill Oravecz of Stone Health Innovations and WTO Associates.

And the law firms multiply. Continuing to fight Theranos’ many lawsuits in multiple courts are a bevy of Big Law firms. In Chapter 26, Boies Schiller exited, stage left, and Wilmer Hale (formally Wilmer Cutler Pickering Hale and Dorr) entered. Wilmer Hale is representing Theranos in the California class action lawsuit described in Chapter 27 and what we’ve deduced is the Partner Fund Management lawsuit filed in Delaware (Chapter 21). Here’s where Santa unloads his jolly pack of toys for the Law Boys. Cooley LLP (32nd on The American Lawyer’s 2016 Am Law 200 ranking) is busy representing Ms Holmes, who has been separately sued by Partner Fund Management, and defending an Arizona lawsuit (Chapter 22). And on deck for Theranos in the Walgreens action, also in Delaware? (Chapter 23) Newcomer Wilkinson Walsh + Eskovitz, founded earlier this year by top trial lawyers from larger firms. All those billable hours add up to gold in their stockings, coal in Theranos’. Law.com

See here for the 28 previous TTA chapters in this Continuing, Consistently Amazing Saga.

Categories: Latest News, Opinion, and Soapbox.

The Theranos Story, ch. 24: looking for the nadir in Walgreens’ lawsuit

November 17, 2016 | by

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/11/jacobs-well-texas-woe1.jpg” thumb_width=”150″ /]When will we find the nadir of Theranos’ business practices? Between the excruciating details of the Walgreens lawsuit and the treatment of an employee who knew the truth in 2014 (part 2), the bottom, like Jacob’s Well in Texas at left, may be unfindable.

The first is what is revealed in the public version (filed 15 Nov) of the civil complaint filed with the US District Court, District of Delaware (PDF). While heavily redacted in parts of text and in the exhibits, it is damning if all true–and there is little available information that does not fit Walgreens‘ narrative, though this Editor was left wondering why red flags about Theranos didn’t flap ‘n’ fly at Walgreens much earlier, especially with a reported $140 million investment at stake.

The relationship began in January 2010. A March presentation by Theranos included some astonishing claims: the Theranos finger-stick blood draw lab analysis had been comprehensively validated by ten of the leading fifteen pharmaceutical companies over seven years; that bio-pharma companies, “prominent research institutions, and US and foreign government health and military organizations” had already used the technology; that Theranos was capable of launching it in retail stores by end of 2010. They also represented that they were positioned with FDA to introduce the technology outside of clinical studies. Johns Hopkins, contracted by Walgreens to validate their methodology, could only work with data provided by Theranos.

Did anyone at Walgreens think to check with said pharmas, researchers, government health and military organizations? There was time. The master agreement was not signed until 2012 and pilot stores opened in 2013.  (Pages 5-10, section 24 through 50). Interestingly, pages 11-12 which may deal with the labs, as well as many other parts, are heavily redacted.

In short, there is a gap of at least two years when Walgreens could have double-checked Theranos’ claims and methods, especially in the crucial period before pilot locations were opened. (To be fair, Theranos successfully maintained a veil of secrecy and a wall of PR smoke.) But the repercussions were huge.  It seems that Walgreens only woke up from the dream when the Wall Street Journal published its investigation another two years later in October 2015. In the immediate aftermath of the article, Walgreens learned that Theranos had abandoned the finger-stick draws…and that the head of the Newark CA lab was a full-time dermatologist onsite once a week (page 15).

After that point, the Theranos fan dance with Walgreens accelerates.

  • Theranos concealed the January and March 2016 CMS notices and subsequent reports on its labs to Walgreens until again the WSJ publicly revealed it (pages 17-18, 25). They also attempted to conceal the CMS rejection of the Plan of Correction for its labs (page 24).
  • Theranos accused Walgreens of breaching the agreement and confidentiality to the WSJ , and also cited delay in building out Wellness Centers–in February 2016 (pages 20-21)
  • Walgreens received nothing but evasions from Theranos including no notification of ‘tens of thousands’ voided results, including critical PT/INR coagulation results, until after the WSJ broke that bit of news on 18 May (page 26).

By 12 June 2016, the wheels were fully off (and the world was minding, indeed) and Walgreens called the breach of warranty. But even then, this was not until a final push–lawsuits were filed against both Theranos and Walgreens starting in late May.

One wonders how many reputations are on a stake (to mix two metaphors) at Walgreens Boots. Details in Ars Technica (which obtained the PDF and broke the story) and of course Neil Versel’s acerbic POV in MedCityNews. Hat tip to reader David Albert MD of AliveCor.

See here for the 23 previous TTA chapters in this Continuing Saga.

The Theranos Story, vol. 23: Walgreens drops the $140 million contract breach hammer

November 9, 2016 | by

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2015/11/upside-down-duck.jpg” thumb_width=”150″ /]Walgreens Boots Alliance has finally sued Theranos in Delaware Federal Court in for breach of contract.  Walgreens is seeking $140 million, supposedly equivalent to their amount invested, according to sources cited in the Wall Street Journal article. Not many details are available, since Walgreens moved to seal the civil suit under their mutual non-disclosure agreement.

Allegations are flying, of course. Walgreens is officially mum, but according to the WSJ‘s ‘close to the matter’ sources, Walgreens claims that Theranos misled them about the state of their technology during their three-year partnership and even after the blood-draw centers were closed in June, which put their customers at risk. This sounds like the fraud and misrepresentation cited by Partner Fund Management, which moved in October to get its $96 million back like Lee Marvin as Walker in Point Blank. Earlier reports confirmed that patients did not learn for weeks or months, often not until forced to, that their Theranos test results were unreliable. There are reports that at least 10 patient lawsuits have been filed in Arizona and California.

(This Editor notes that their Theranos agita hasn’t soured Walgreens on funding health tech. They are a substantial investor in TytoCare, an all-in-one vital signs device with retail potential, and MedAvail, a kiosk dispenser for prescription and OTC medications)

Theranos has, no surprise, said a great deal, aggressively–the trademark of their legal supremo David Boies. They claim to be the aggrieved party: “Over the years, Walgreens consistently failed to meet its commitments to Theranos. Through its mishandling of our partnership and now this lawsuit, Walgreens has caused Theranos and its investors significant harm.” Theranos has exited the blood-testing business and is supposedly refocusing on developing technology to sell to outside labs. Also MedCityNews ‘coughs’, The Verge.  See here for the 22 previous TTA chapters.

The Theranos Story, ch. 22: the human cost of lab error (updated)

October 26, 2016 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2015/11/upside-down-duck.jpg” thumb_width=”150″ /]Save this one for the coffee or lunch break. What is the cost of a lab error on the human psyche? It can be mildly upsetting to you and your doctor, warning of a developing condition and some changes have to be made–or make for a very bad day/week/months. It can be falsely reassuring or simply confusing.

We know that in April, Theranos flunked a CMS review, and in May voided all test results from its proprietary Edison devices from 2014 and 2015, as well as some other tests it ran on conventional machines. The results were not only off, but way off, according to the WSJ. “Notes from the CMS inspection show that 834 out of 2,890 quality-control checks run on the Edison in October 2014, or 29%, exceeded the company’s threshold of two standard deviations from its average result. Standard deviation is a statistical measurement of variation. In addition, 80% of the 834 quality-control checks that raised a red flag under Theranos’s internal standards were more than three standard deviations from its average result, the inspection notes show.”

They also failed to notify patients for weeks or months, and often not until forced to. At least 10 lawsuits have been filed in Arizona and California. Some of the human stories of Theranos’ improbable lab results, which included tens of thousands of patients, with the cost of retesting, repeated doctor visits and agonizing suspense :

  • After five widely different Theranos blood coagulation tests in six weeks, a retired marketer living in Arizona and his doctor so distrusted the results that the latter recommended that he stop taking warfarin and switch to a milder medication. This patient found out only last Friday that Theranos had corrected a September 2015 test showing his blood taking more than six times longer than normal to clot. The other four tests showed the warfarin wasn’t thinning his blood enough. Contradictory results confusing both doctor and patient on treatment.
  • A thyroid cancer survivor got thyroxine results (T4) from three tests conducted in October 2014. The extremely high results could have indicated hyperthyroidism at the least, or a more serious condition. The results–false after retesting failed to confirm.
  • A breast cancer survivor had extremely high levels of estradiol, which could have been produced by a rare adrenal tumor that can secrete estradiol or an elevated risk of breast-cancer recurrence. Again, false results but found only after retesting.

The comments under the article are worth the long scroll. (They are running 98 percent in favor of Holmes for Prison 2017. Also there are a few shots at Walgreens’ role in legitimatizing Theranos by putting their centers in store; this embarrassing part of the story isn’t over, in this Editor’s opinion.) What is evident–fraud perpetrated on patients and doctors–and anyone who invested. David Boies, their legal supremo and board member, is gonna have a full docket between this and the various legal actions taken by the Alphabet Agencies.

Agony, Alarm and Anger for People Hurt by Theranos’s Botched Blood Tests. If the WSJ is paywalled, search under the headline text.

See here for the agony of TTA’s 21 previous Theranos chapters. We hope that John Carreyrou and the WSJ investigative team, which we’d assume includes Mr Weaver, this article’s author, are awarded the Pulitzer Prize.