Sad Postmortem on Theranos Inc.

donheff said:
Read John Carreyou's, "Bad Blood."
Click to expand...

Great tip, thanks. I enjoyed the book - it brought back memories of the times in my career when my technical 'power' collided with managerial or ownership 'power'. Usually, I lost. :( Thank goodness those days are long past. :dance:

Regarding the unfortunate Theranos investors who lost their entire investment, this just reinforces what I've witnessed repeatedly throughout my life: low-effort thinking and great wealth are a recipe for disaster. :nonono:

I have a feeling that I'm not going to enjoy the Bad Blood movie as much as I did the book, but we'll see. :D
 
I just finished the book Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou.

Surely enough, what I surmised was correct.

NW-Bound said:
I glanced through the patent list, and the ones I saw were all recent, or at least after 2010. She would have many real researchers working for her, and it is quite customary to put your boss's name on the inventor list. :)

Her first patent in 2004 is for sure her own. She is most likely a bright woman, and had some new innovative ideas, and needed some money to develop it (along with many coworkers that she would hire with the invested money).

As with any venture, it may or may not pan out. In this case, she decided to fake it until she made it. And she was caught.
Click to expand...


The 1st patent was her own. However, it requires technology that is simply not available. For people who do not know how patent laws work, you can be granted a patent without showing a working prototype. That's why people can dream up a lot of things, claim them first, and get licensing money from people who really can build one.

Yet, she got some seed money to hire real technical people to develop it, and quickly changed it to something that was reasonably within the realm of science. Even that is too tough if not impossible, and she cheated in order to bring in more money.

Real patents were developed by people she hired, and her name was put on nearly all of them. This is really not allowed by patent laws, but who was going to say no to Holmes?

She fired all workers who said no to her, or asked about the cheating that they saw. She spent a lot of money on lawyers to intimidate the fired workers. When the WSJ broke the news, her lawyers even managed to intimidate doctors who reported bad test results, in order for them to recant their stories told to the book's author.

Holmes is a pathological liar. Her lies were so blatant that nobody would think that they were outright lies, hence thought there had to be some truth in it. For example, she lied that many hospitals, and pharmaceutical companies, even the US Army were testing and loving her products, while no such things happened. Very few have the audacity to lie like that. And to do it with such a straight and convincing face!

What an amazing story! She managed to fool a lot of people. Some really believed that she would be a savior to mankind by reducing the cost of healthcare by offering cheap and easy fingerpricked blood tests that could screen for cancers, not just replacing all the current blood tests. She lied that the users were raving about the accuracy of her tests, while the few pharmaceuticals that she signed up early quickly dropped her products because the results were so bad.

One should read the book to see how money can buy legal power, read hordes of attorneys, to intimidate would-be whistleblowers, even victims. I am sure that pharmaceuticals that knew her products were bogus had to be quiet due to confidential agreements that they signed. So, it is not that nobody could see through her BS. It's just that they were silenced.
 
Last edited:
NW-Bound said:
I just finished the book Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou.

Surely enough, what I surmised was correct.




The 1st patent was her own. However, it requires technology that is simply not available. For people who do not know how patent laws work, you can be granted a patent without showing a working prototype. That's why people can dream up a lot of things, claim them first, and get licensing money from people who really can build one.

Yet, she got some seed money to hire real technical people to develop it, and quickly changed it to something that was reasonably within the realm of science. Even that is too tough if not impossible, and she cheated in order to bring in more money.

Real patents were developed by people she hired, and her name was put on nearly all of them. This is really not allowed by patent laws, but who was going to say no to Holmes?

She fired all workers who said no to her, or asked about the cheating that they saw. She spent a lot of money on lawyers to intimidate the fired workers. When the WSJ broke the news, her lawyers even managed to intimidate doctors who reported bad test results, in order for them to recant their stories told to the book's author.

Holmes is a pathological liar. Her lies were so blatant that nobody would think that they were outright lies, hence thought there had to be some truth in it. For example, she lied that many hospitals, and pharmaceutical companies, even the US Army were testing and loving her products, while no such things happened. Very few have the audacity to lie like that. And to do it with such a straight and convincing face!

What an amazing story! She managed to fool a lot of people. Some really believed that she would be a savior to mankind by reducing the cost of healthcare by offering cheap and easy fingerpricked blood tests that could screen for cancers, not just replacing all the current blood tests. She lied that the users were raving about the accuracy of her tests, while the few pharmaceuticals that she signed up early quickly dropped her products because the results were so bad.

One should read the book to see how money can buy legal power, read hordes of attorneys, to intimidate would-be whistleblowers, even victims. I am sure that pharmaceuticals that knew her products were bogus had to be quiet due to confidential agreements that they signed. So, it is not that nobody could see through her BS. It's just that they were silenced.
Click to expand...
Thanks for the book recommendation/review. I will probably read it because it sounds fascinating.
 
audreyh1 said:
Thanks for the book recommendation/review. I will probably read it because it sounds fascinating.
Click to expand...

As mentioned, I knew about the Theranos fiasco from the Web headlines, but did not follow it until this thread. And I read the book, due to the mentions from posters DonHeff and Sweetana3. I am always in the lookout for good non-fiction books, and this is a must-read. I reserved it from the local library and read it in two sittings.

Mdlerth said:
...
[*]"That same month, Theranos agreed to pay $4,652,000 in consumer restitution — more than Theranos had in fact collected for all lab tests throughout the life of the company." Under what collective hallucination is a company with only 4.6 million in sales valued at 9 billion? I have difficulty feeling sympathy for the [-]investors[/-] speculators who got burned dumping truckloads of cash into a company that produced neither any products nor a valid financial statement for a decade....
Click to expand...

If it were just a blood-testing service, it would not be so exciting to get that valuation. What Theranos promised was an eventual home device, no larger than a toaster, which will take a drop of blood from a fingerprick and run hundreds of tests including cancer screening. No more driving to Lab Corp, or Quest and waiting for an hour to have your blood drawn. You can have a far more comprehensive blood test everyday if you wish, with just a fingerprick the same way people test for blood glucose for diabetes control. And the machine will be affordable too. It will use microfluidic technology.

How much such a disruptive technology is worth? Your health will depend on it. A superduper comprehensive personal blood tester is arguably more important than a personal computer, and you know how big that whole industry has grown since the IBM XT days.

Of course, it turned out to be just a wet dream.
 
Last edited:
NW-Bound said:
Of course, it turned out to be just a wet dream.
Click to expand...

I suspect you mean pipe dream, although since we're talking about blood testing your version isn't too far off the mark. :popcorn:
 
NW-Bound said:
As mentioned, I knew about the Theranos fiasco from the Web headlines, but did not follow it until this thread. And I read the book, due to the mentions from posters DonHeff and Sweetana3. I am always in the lookout for good non-fiction books, and this is a must-read. I reserved it from the local library and read it in two sittings.



If it were just a blood-testing service, it would not be so exciting to get that valuation. What Theranos promised was an eventual home device, no larger than a toaster, which will take a drop of blood from a fingerprick and run hundreds of tests including cancer screening. No more driving to Lab Corp, or Quest and waiting for an hour to have your blood drawn. You can have a far more comprehensive blood test everyday if you wish, with just a fingerprick the same way people test for blood glucose for diabetes control. And the machine will be affordable too. It will use microfluidic technology.

How much such a disruptive technology is worth? Your health will depend on it. A superduper comprehensive personal blood tester is arguably more important than a personal computer, and you know how big that whole industry has grown since the IBM XT days.

Of course, it turned out to be just a wet dream.
Click to expand...

that wouldn't catch on with me , the ( nearly every ) monthly blood test is the highlight of the month .. a the 70 yard walk to the clinic , buy any needed pills from the nearby pharmacist while there , a chat with the cutie drawing the blood ... whether a pin prick or up to 4 attempts to draw 10 ml of blood, the problem is the same ... stopping further bleeding in a reasonable time .

the saga does raise bigger questions on medical research and investing though , i hope some regulators learned some extra lessons
 
socca said:
I suspect you mean pipe dream, although since we're talking about blood testing your version isn't too far off the mark. :popcorn:
Click to expand...

I should have simply said that the promised device remained in the realm of science fiction. Maybe we can get there some day, but not any time soon.

Oz investor said:
that wouldn't catch on with me , the ( nearly every ) monthly blood test is the highlight of the month .. a the 70 yard walk to the clinic , buy any needed pills from the nearby pharmacist while there , a chat with the cutie drawing the blood ... whether a pin prick or up to 4 attempts to draw 10 ml of blood, the problem is the same ... stopping further bleeding in a reasonable time .

the saga does raise bigger questions on medical research and investing though , i hope some regulators learned some extra lessons
Click to expand...

There were pharmaceutical companies that were interested in Theranos machines. They were testing new cancer drugs, which could have very bad unknown effects on patients. If outpatients could self-administer more frequent (daily?) blood tests of the right types, it would be a godsent to alert the treating doctors of any developing danger to the patients (the machines could send data back to the treating clinics via the Internet). The trials were terminated when the results were found to be erratic.

About regulations, of course the FDA has the authority over such machines. I just saw on Youtube an appearance by Holmes on CNBC Jim Cramer show. This was right after the very first WSJ article that broke the news on the flim-flam. Holmes said on TV that the tests were made on machines that were fully approved by the FDA.

Now, who would have thought someone could be so blatantly lying like that on a public broadcast? Cramer appeared to be satisfied with her answer.

PS. Holmes' interview on that show - remotely as she was not in the studio - was right after she got out of a meeting at Harvard, where she was inducted to the Harvard Medical School Board of Fellows. Totally amazing!
 
Last edited:
i have an Abbott's Absorb III stent ( implanted two weeks before it was withdrawn from use )

Abbott Pulls Troubled Absorb Stent From European Market

https://www.cardiobrief.org/2017/04/06/abbott-pulls-troubled-absorb-stent-from-european-market/

ABSORB III at Two Years: Jury’s Still Out on Bioresorbable Stent Vs. DES

https://consultqd.clevelandclinic.org/absorb-iii-two-years-jurys-still-bioresorbable-stent-vs-des/

however it could be worse it could have been an Abbott electronic enhanced product

FDA recalls close to half-a-million pacemakers over hacking fears

https://www.engadget.com/2017/08/31/fda-pacemakers-abbott-hacking/


FDA Warns on Abbott’s St. Jude Pacemakers and Defibrillators

https://www.wsj.com/articles/fda-warns-on-abbotts-st-jude-pacemakers-and-defibrillators-1492110804


might i suggest the ambitious young lady only exploited existing weakness

might be less amazing but hint at systemic flaws
 
No medical expert here, but I can see that any government regulation purpose is to make sure that the people putting out products have done reasonable research, study, and tests to ensure public safety. They have to submit a lot of paper work to show that they have done their homework. There might still be long-term side effects that they did not know of. That is where court cases for product liability come in.

In the case of Theranos, they knew their product/process was faulty, and still used it on the public. This is more than a case of product liability, because the product does not even do what it is claimed to do, let alone any side effect.

It's criminal, hence the current indictment on Holmes and her boyfriend Balwani. It appears that the government is combing through the records that have been subpoenaed to look for more perpetrators to indict. This was a grand case of fraud and record falsifying, and there were more employees involved in the scam, some no doubt willingly and enthusiastically doing it for stock options.
 
Last edited:
bobandsherry said:
I dunno, maybe because of the success from people like these?

10 ultra-successful millionaire and billionaire college dropouts

entrepreneurs-who-dropped-out-infographic.png
Click to expand...

Wow, all 10 people here who became successful. Those are so really great odds considering there are 6+ billion people. lol
 
For those too lazy and cheap to get the book Bad Blood.

News video
 
athena53 said:
Or, as Buffet says, "when the tide goes out you can see who's been swimming naked".
Click to expand...
She was worth $9 billion at one time. Then the media said said she lost it all. Not so fast. If she was smart she could have cashed out some while the going is good and could have invested in various ways.
 
Aerides said:
Nothing sad about it. Holmes is a fraud. In addition to screwing shareholders and employees, how many people got incorrect blood results...that's where my sympathy lies. Imagine someone got a false positive and didn't get treated somewhere in that mess.
Click to expand...

Precisely. A shame for the employees and stakeholders but much worse for the people who made medical treatment decisions based on the false information produced by one of the Theranos devices. :mad:

Something is odd about the look in Holmes' eye in the front-facing "stare at the camera" photos. Like looking into a void. The gaze of a sociopath perhaps....
 
Nick12 said:
She was worth $9 billion at one time. Then the media said said she lost it all. Not so fast. If she was smart she could have cashed out some while the going is good and could have invested in various ways.
Click to expand...

I always wondered, especially during the first internet boom, how much of investors' money was skimmed off the top where CEO/CFO were college roommates, or family.
 
Nick12 said:
She was worth $9 billion at one time. Then the media said said she lost it all. Not so fast. If she was smart she could have cashed out some while the going is good and could have invested in various ways.
Click to expand...
Yup.
Bet she's driving a 12 year old Corolla and had to move to Gary Indiana - down wind side of town.
Probably still has a networth at least 100x mine and a good chance in 2 more years some fool board will give her a C level job alà Carly Fiorina
 
ncbill said:
I always wondered, especially during the first internet boom, how much of investors' money was skimmed off the top where CEO/CFO were college roommates, or family.
Click to expand...
It happens more than we think. Media likes to talk about rags to riches to rags but money is "set aside" and put somewhere safe and gathering interest for a rainy day.
 
GravitySucks said:
Probably still has a networth at least 100x mine and a good chance in 2 more years some fool board will give her a C level job alà Carly Fiorina
Click to expand...

Yeah, she probably has money squirreled away somewhere, although according to reports I've read, she didn't sell any of her Theranos stock and actually owes (or owed) the company $25MM related to exercising her stock options.

Also, as part of the settlement of the fraud case brought against her by the SEC, she is not allowed to serve as an officer of a public company for 10 years. Of course, she could always move to a country with less regulatory oversight in an emerging markets region and try to scam some other unwitting, unsuspecting investors. Given the very high profile of her case, that might be pretty hard to do though.
 
In the many depositions she has given, " I don't know " was a good answer for most questions.

One youtube comment posted :

Question in deposition " Do you swear under penalty perjury that the testimony you will be giving today will be truthful and complete " -

Holmes answer: " I Don't Know "
 
She could always run for head of the HOA Architectural committee. Or start an entrepreneurial think-tank.
 
There is a great documentary on Netflix titled "The Bleeding Edge". It isn't about Theranos, but the medical device industry in general, and how little and sometimes non-existent the regulation is for medical devices. It's a fascinating flick and easily demonstrates how these types of things come to be.
 
You must log in or register to reply here.

Similar threads

Scrapr
Death w Dignity experience NSFW(?)
2 3
Replies
74
Views
11K
Goldendoodlebug
Goldendoodlebug
R
The old dog hangs on..
Replies
15
Views
1K
Red Badger
Red Badger
frayne
For what it is worth on a chilly Sunday morning.
Replies
20
Views
3K
Dreamer
D

Latest posts

Back
Top Bottom