Theranos Inc. is a fast-rising Silicon Valley medical technology startup that has garnered attention and funding for its blood-testing Nanotainer device and Edison machine. The technology is being marketed as an easy, efficient and cheap blood test tool kit that can promptly provide information on one's health.
Theranos' technology promises blood test results delivered at a faster and more convenient way. When a blood sample is procured at a doctor's office, it is sent to an external facility where the testing is done. This process, however, could take days and it's not usually cheap.
Theranos capitalized on this problem and announced that its proprietary technology can provide results for approximately 200 targeted tests using a finger-prick technology. Instead of piercing a needle into the patient's arm and procuring a test-tube full of blood, Theranos' Edison machine can produce results with only a capsule-sized blood sample contained in its Nanotainer device. Best of all, it promises results within four hours or less.
The company was founded by Elizabeth Holmes, a 31-year-old dropout from Stanford University who believed her tuition money can be of better use to 'transform healthcare' in the United States. Holmes has become a public figure after being hailed as one of America's youngest self-made billionaires.
However, a recent report from the Wall Street Journal has pulled the rug from under the tech startup when it revealed how Theranos is having a difficult time proving the technology's capability. The report suggested that Theranos not only misled the public, but also government officials and investors. It has been reported that the company received $400 million from investors. Theranos' has a reported net worth of $9 billion.
In response, Theranos published a press release saying the report was "factually and scientifically erroneous and grounded in baseless assertions by inexperienced and disgruntled former employees and industry incumbents."
However, no peer-reviewed studies have been released and suspicions began to take root around the highly secretive Theranos which refused third-party inspectors to review data and visit its labs. The tech startup said it aims to protect the intellectual property from rivals. Moreover, many of Holmes' interviews do not shed light on how the company is producing such technology for a complex medical test.
Due to the lack of scientific transparency and suspicion over the voluntarily submitted data to win approval of their methods, the FDA made an unannounced inspection of the Theranos lab. The FDA later announced that the Nanotainers used to contain the finger-pricked blood sample is "an unapproved medical device."
Moreover, Theranos uses standard lab equipment purchased from external vendors to do their tests, and not their own Edison machines. Under pressure from government regulators, the tech startup has ceased operations using the proprietary technology to collect tiny blood samples, with the exception of the herpes simplex 1 test, which was FDA-cleared in July.
The blood diagnostic industry in the U.S. has a value of $75 billion. Frost & Sullivan's senior industry analyst Divyaa Ravishankar projected a $90 billion market value by 2018.