As a prospering Silicon Valley blood-testing startup in 2003, Theranos has fallen short of its expectations with the leadership of founder Elizabeth Holmes. The company initially sought out to create pinprick blood tests that would revolutionize health-care and diagnostics, but a series of lies eventually led to the downfall of the company.
As a prospering Silicon Valley blood-testing startup in 2003, Theranos has fallen short of its expectations with the leadership of founder Elizabeth Holmes. The company initially sought out to create pinprick blood tests that would revolutionize health-care and diagnostics, but a series of lies eventually led to the downfall of the company.
With her “prized” fingerstick patent, Holmes was able to raise upwards of $700 million from high-profile investors. However, the company was stricken with years of corruption and fraud, which made it impossible for the company to gain validity. Its initial design for the Theranos device was released in 2005, but in November 2006, Henry Mosley was fired from his position as the chief financial officer of Theranos after questioning the reliability of its technology and overall honesty of the company. This stirred a great deal of skepticism about the product, considering the company’s CFO lacked confidence about its product. By 2010, the startup company had finally made its way to Silicon Valley, and Holmes sought to establish a partnership with companies like Walgreens and Safeway.
Early in 2012, Theranos managed to take over the blood testing center at a Safeway employee health clinic as a beta run, but the chief medical officer of Safeway expressed concerns about the values of Theranos. Safeway’s CEO just brushed these concerns off and retired the following year, but Theranos was far from safe at that point. According to Business Insider, Lieutenant Colonel David Shoemaker raised doubts about “Theranos’ regulatory strategy to the FDA in 2012 after Holmes approached him about deploying the device in the military.”
Because there weren’t many major consequences for their actions up to this point, the company was able to continue to receive investments and gain attraction. In 2015, Theranos was on thin ice after Wall Street Journal investigative reporter, John Carreyrou, got a tip about Theranos. He was told there were unethical and harmful practices at the company and how they were generating false and unreliable reports for patients. By early 2016, the Centers for Medicare and Medicaid Services, the institute that regulates blood-testing labs, cited concerns that the company posed “immediate jeopardy” to its patients.
After an SEC inspection, Theranos was finally exposed for its concerning and unsafe practices. CMS banned Holmes from the lab-testing industry for two years, while Theranos wasn’t able to own or operate a clinical lab until 2019. In March of 2017, the SEC charged Holmes and the company with “massive fraud.” Holmes paid a fine and was forced to exclude participation as a director or officer of a publicly traded company for ten years. Theranos’ downfall marks another story of a promising company tainted with corruption; the company’s end comes after a spoiled 15-year tenure.
