Investigations

Theranos Promised a Blood Test Revolution and Delivered a Fraud Conviction

The device that was supposed to run hundreds of tests on a finger-prick of blood mostly ran on investor faith and unmarked competitor's machines.

Elizabeth Holmes at TechCrunch Disrupt, 2014. Photo: Max Morse for TechCrunch, CC BY 2.0.

Theranos, founded in 2003 by a 19-year-old Stanford dropout named Elizabeth Holmes, promised to replace the traditional blood draw with a proprietary device called the Edison: hundreds of lab tests, run on just a few drops of blood from a finger prick, at a fraction of the cost. It raised more than $700 million on that promise and was, at its peak, valued at $9 billion.

The device did not work as advertised. Internally, Theranos ran most patient tests on modified, and in some cases outright unauthorized, commercial machines from other manufacturers, while presenting investors and the public with a technology that could reportedly do it all in-house. Employees who raised concerns about accuracy and safety were, according to later reporting and testimony, sidelined or silenced.

Investigative reporting by the Wall Street Journal in 2015 cracked the story open, and years of regulatory and criminal proceedings followed. On January 3, 2022, a federal jury convicted Holmes on four counts of investor fraud and conspiracy (she was acquitted on patient-related charges). She was sentenced to more than 11 years in prison and began serving her sentence in May 2023.

The tragedy for the actual mission — cheaper, less invasive diagnostics — is that it was a good pitch. It just wasn't a working product, and the gap between the two was filled entirely with confidence, non-disclosure agreements, and other people's blood.

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Apeel's Grape Seed Coating Once Kept Six in Ten American Supermarket Avocados From Spoiling. Then the Internet Found the Safety Data Sheet for a British Degreaser Also Called Apeel.

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Australia Paid Up to $1,600 a Home in 2009 to Insulate a Million Ceilings in a Year, Using Installers Who Signed Up Online. Its First Industry Meeting Heard New Zealand Had Tried This and Three People Electrocuted Themselves.

Subway Told Australian Customers Its Footlong Was a Trademark Name, Not a Measurement of Length. The US Trademark Board Ruled It Was a Measurement of Length and Refused Subway the Trademark.