To those with an interest in biotechnology and an ear for scandal within STEM, the name Elizabeth Holmes may ring a bell.
Holmes was a former entrepreneur and executive officer of Theranos, a failed American biotechnology start-up once worth billions of dollars that crumbled for its fraudulent medical device. She founded Theranos in 2003 at age 19, and over the course of ten years the company raised around $10 billion in investments . Shortly after reaching this valuation and introducing Theranos to the world, skepticism about the ‘Edison ’ and its technology marked the start of the company’s descent into dissolution.
Theranos’s medical breakthrough was the ‘Edison’, a machine designed to run multiple tests within minutes on a drop-sized blood sample. It was designed to look for the presence of antibodies or antigens in blood, which could be used to gauge drug levels, hormone levels, and even some cancer markers . However, this machine never actually managed to successfully run, and presumably none of the test results were reliable. Theranos focused great efforts on keeping the machine and its technology concealed. It was never sent for review by medical journals, and danced around FDA regulations for as long as possible. It was not long after publicizing Theranos that people began questioning the validity of their technology, and detailed investigation into their labs and operations eventually revealed the truth.
One of Theranos’ first whistleblowers revealed the ‘Edison’ was incredibly dysfunctional, with falling pieces and the inability to regulate its temperature . The tests did not work with the machine, and the selling point of using samples the size of a few drops was completely inapplicable. The majority of tests required traditional blood samples from the arm, and machines that were not the ‘Edison’ ran these tests . Towards the end of the company’s downfall, two years worth of blood tests at Theranos were voided for their unreliability and risk of falsehood. Simply put, Theranos was lying to all of its stakeholders, investors and patients alike, about their technology being used across the country.
Eventually, key investors like Walgreens and Safeway began pulling out, their labs were forced to shut down, multiple lawsuits were filed against the company and Holmes was charged for massive fraud. The company dissolved in 2018 and as of this year, Holmes has been found guilty on four of 11 federal charges, with her sentencing to be determined in September.
Theranos will be remembered as one of the biotechnology industry’s greatest failures, and it makes a strong case-study for a company’s accountability to the public. The start-up managed to maintain its lie for more than twelve years before it all came crashing down, demonstrating a clear need for policy reform around transparency and publicizing corporate information. For future ventures in the biotechnology industry, this scandal will always be a good example of everything that can go wrong.
About the Author:
This article was written by Mirvat Chowdhury, a chemical engineering student at the University of Toronto. She is interested in environmental engineering, and enjoys learning about biotechnology developments related to sustainability.