Palo Alto-based healthcare technology startup Theranos has been on the defensive since its core blood-sampling technology's capabilities were called into question by a Wall Street Journal article in October. Headed by founder and chief executive Elizabeth Holmes, a Stanford dropout whose fear of needles makes up the backstory/mythology behind the company's pin-prick blood sample method, the $9 billion-valued company has now fallen under more formal scrutiny. The Journal reports that government health regulators are investigating claims by two former Theranos employees, both damning, but of course neither definitive.
The first complaint has reportedly been lodged by a former employee with the Centers for Medicare and Medicaid Services. It claims that Theranos' management instructed lab employees to continue to test patients with the company's blood-sampling device in spite of “major stability, precision and accuracy” issues with the device.
Another complaint was reportedly sent to the Food and Drug Administration, also by a former employee, alleging that when Theranos won the agency’s approval for a herpes test last year, it broke research protocol to do so.
A Theranos spokesperson who says the company has not seen the complaints told the Journal that “Agencies have a process for evaluating complaints, and many complaints are not substantiated. We trust our regulators to properly investigate any complaints, and we look forward to continuing our strong and productive relationships with them.”
Gizmodo notes that Holmes has disputed the Journal's claims as “false” and “misleading,” and the Journal adds that Theranos has made a pledge to produce peer-reviewed data on further tests.
Of the allegations against Theranos generally, Wired offered the analysis that "the story also exposes a deeper problem with the way Silicon Valley tries to spin hype into startup gold... Science moves slowly. Silicon Valley moves fast and breaks things. Theranos has tried to have it both ways, which makes it not entirely surprising that the company now finds itself on the defensive.”