The Rise and Fall of Theranos


Photo Courtesy of ABC News.

Mira Ivanis , Contributor/Editor

The once monumental, blood-testing technology, Theranos, is now the subject of a criminal trial. CEO and founder Elizabeth Holmes faces a possible 20 years in prison under allegations that she and former president Sunny Balawi were involved in an attempt to defraud investors. But the suspicion grew years before when in 2015 questions were raised about the actual technology  behind it. Because up until then there was much talk about this glorious technology, but it was never shown. 

In 2002, Elizabeth Holmes set on a path to revolutionize healthcare. How? By creating blood-taking tests that were cheaper and more convenient. This innovative technology was named Theranos. Theranos stood for “therapy” and “diagnosis.” Holmes dropped out of Stanford the next year and began to piece together her company with a sales pitch that her tech could detect health problems with just a few drops of blood from a pricked finger. This reached high-profile investors like Henry Kissinger, Betsy DeVos and Rupert Murdoch.

According to Refinery29, within three years Theranos was able to raise $6.9 million in funding and only a few years later the company had received a valuation of $200 million dollars. 

Walgreens formally cuts ties with Theranos | TechCrunch
Photo Courtesy of TechCrunch.

The company had lain low for its first few years but by 2013, Theranos created an official website where it introduced its product to the world through media features and press releases. By the end of the year, Theranos partnered up with Walgreens where they commercialize tests and reach their consumers directly.  

By 2014 Theranos was featured on most high profile media platforms such as The New Yorker, Forbes and more. However suspicions began to build around this so-called technology because the thing is, no one had ever seen it. The New Yorker had called Holmes’ explanations of the procedures “comically vague.” The same year, Holmes delivered a Ted Talk where she promised that her company would make blood testing cheaper and more convenient. 

Biden visits Theranos lab as part of healthcare innovation summit
Photo Courtesy of USA Today.

Despite criticism Theranos received from medical practitioners, its testing was approved by the FDA in 2015. President Joe Biden at the time visited the Theranos facility where he called Theranos “inspirational.” A report from The Wall Street Journal published John Carreyrou’s full expose on the company. 

Everything went downhill in January 2016, when a Theranos lab in Newark in California was found to be a threat to patient care. The Centers for Medicare and Medicaid services (CMS) wrote a letter to Theranos after it’s investigation had found that Theranos didn’t “comply with certificate requirements and performance standards and caused immediate jeopardy to patient health and safety.”

The worst was yet to come when in May 2018 Theranos was charged with massive fraud. The U.S. Securities and Exchanges Commission (SEC) accused Holmes and former president Ramesh “Sunny” Balwani of raising more than “700 million dollars from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance” according to Refinery29. 

The number of frauds kept piling, one which indicted both Holmes and Balwani on two counts of conspiracy and nine of wire fraud. In the aftermath of the indictment, Holmes stepped down as CEO of Theranos. She does however stay on the company’s board. 

A few months had passed and not a single red dime was invested in the company, so by the end of 2018 Theranos was forced to close. Theranos had announced that it would pa it’s creditors in full with remaining cash. 

The case was reopened this year and was off to a rocky start. On Wednesday, the trial began with opening statements however it is now delayed due to a possible Covid exposure. Holmes has pleaded not guilty.