“FIRST they think you’re crazy, then they fight you, and then all of a sudden you change the world,” said Ms. Elizabeth Holmes, founder of Theranos, a health technology company, based in Palo-Alto, California. Its aim is to disrupt the blood test market that, in America alone, is worth $75 billion a year. A recent injection of $400m from investors gave it a value of $9 billion, making Ms. Holmes, who owns about half the company, the youngest female self-made billionaire.
The company’s process has for the most part, been shrouded in mystery, denying independent experts free access to its labs, citing the need to protect intellectual property. Naturally, this has drawn skepticism from experts like Dr. Jerry Yeo, a professor at University of Chicago. “They completely bypassed the traditional process of peer review or publishing in peer-reviewed journals or having peer labs evaluate their product”, says Dr. Yeo. “Why haven’t they shown us that information, why haven’t they been willing to publish it, and why haven’t they shown comparisons with existing technology?”
Theranos claimed to be able to perform a myriad of tests with a single drop of blood, do it faster, and do it cheaper than existing laboratories – all without needing a doctor’s note. Seems too good to be true. Naturally, these lofty claims drew a lot of attention to the company, and helped raise multiple rounds of investment. Recently, there’s been a barrage of press reports, saying her company’s technology isn’t all it claims to be.
At the same time, GSK, GlaxoSmithKline, which Theranos claimed to have done tests for, distanced itself from the startup, saying they hadn’t done any business with them in over two years.
Now that doubts have been cast concerning the technology behind it all, has the model Theranos adopted been proven to be ineffective? No. The value proposition of the startup is more in its democratization of patient medical information, dealing directly with the customer. The disadvantage, of course, being that Holmes and her team have created unrealistic expectations on which it cannot deliver. As it stands, it’s entirely possible that Theranos is simply experiencing more setbacks than earlier anticipated, and the technology will catch up to their claims. But if the allegations turn out to be true, doubts will be cast into the company’s and Ms. Holmes, credibility, and its valuation will never again be as high as it is now. In many ways, Theranos is reminiscent of the typical startup in 2015, making bold claims, attempting to radically change the industries they’ve set out to tackle, and getting valued based on optimism rather than realism.
Does this mean that the Theranos situation is all bad? Certainly not. I see it as the first of many such disruptions, some of which will end up succeeding where Theranos has erred.
Speaking of disruption on the medical scene, US based biotech company, Fyodor, founded by Eddy Agbo, is set to debut its Urine Malaria Test (UMT). The test works the same way manual pregnancy tests work, and has gotten to the clinical validation stage, and is expected to hit pharmacies before the year runs out.
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