|Theranos CEO Elizabeth Holmes|
Theranos is no stranger to criticism, facing overwhelming pushback the past few months after articles called its proprietary testing technology into question. But problems with the company's testing methods date back much further, as a new report shows that Theranos often jumped the gun when it came to innovation, spooking investors, employees and potential partners.
Back in 2004, a year after founding Theranos, CEO Elizabeth Holmes snagged a meeting with MedVenture Associates, a medical technology investment company, to pitch an idea about putting blood tests on a chip. Holmes talked "from 30,000 feet about how these tests are going to change mankind" but did not offer any technical or scientific details about how to make the plan a reality, Annette Campbell-White, MedVenture's managing partner, told The Wall Street Journal.
When the firm pressed for specifics, asking how Theranos' technology would be different from a portable blood-diagnostics device made by another company, Abaxis, Holmes got "more uncomfortable" and left the meeting after about an hour, "leaving us to look at one another in amazement," Campbell-White said, as quoted by the WSJ.
Unsurprisingly, Theranos sees the meeting a bit differently. Holmes would never abruptly leave a meeting, Theranos spokeswoman Brooke Buchanan told the newspaper. And Campbell-White's memory could be biased by MedVenture's investment in Abaxis ($ABAX), she added. Campbell-White said that MedVenture left the investment years before the meeting.
Theranos also ran into skepticism when it approached pharma companies about using its tests for drug development. In 2008, Holmes met with pharma titan Novartis ($NVS) to pitch its finger-stick testing technology. When Holmes pricked her finger in front of Novartis execs, all three of the Theranos blood testing devices flickered with error messages. Holmes blamed a minor technical glitch for the problem, the WSJ reports. Novartis declined to comment to the newspaper about the incident, and Buchanan said that Holmes only remembers one device malfunctioning because someone tripped over a cord.
|Theranos' Palo Alto, CA, headquarters--Courtesy of Theranos|
Another drugmaker, Celgene ($CELG), also cast a wary eye at Theranos' plans. In 2008, Holmes told Oscar Laskin, the company's then-VP of early drug development, that Theranos' technology could help Celgene make critical adjustments during drug trials. But when Laskin asked for an explanation about how the process worked, Holmes said that she couldn't give away trade secrets.
"The level of sophistication required by what she was describing involved a paradigm shift," Laskin said. "It sounded like something that was too good to be true."
And when it comes to time, Theranos didn't take any, David Philippides, an engineer who worked on Theranos' devices from Jan. 2013 to Nov. 2014, told the WSJ. Philippides said that he was fired after refusing to go to Arizona to retrieve a broken machine. But while he was still employed at Theranos, he saw a few problems with the company's approach to medical research. "The time was not taken to develop anything properly," Philippides said, as quoted by the WSJ. "This is science. You need time."
- read the WSJ story (sub. req.)