The rise and fall of Theranos, the blood-testing startup that went from a rising star in Silicon Valley to facing fraud charges – Finance

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Star Theranos brightly shone in 2015.

Running a test blood for blood testing laid an estimate of $ 9 billion with her big vision to test a number of conditions from a small amount of blood, and her general manager Elizabeth Holmes was represented on the cover of the magazines and lists top managers. But then questions began to rise about how the company's technology works.

As the reporter for the Wall Street Journal, John Carreyrou described in detail in his new book "Bad blood: secrets and lies in the start of Silicon Valley, "The events that led to the inevitable fall of the company began to unravel a few years ago. The book gives behind the scenes a look at the events that led to the launch of biotechnology, Theranos, into chaos and deception.

In June 2018, Holmes resigned as CEO of Theranos, remaining in the company as the founder and chairman of the board. She was also charged wire fraud Ministry of Justice. On Tuesday, Theranos told investors that it was closing, The Wall Street Journal reported,

Here are the events that contributed to the rise, fall, core, and now criminal charges once a promising company founded by Holmes.

Elizabeth Holmes graduated from Stanford University in 2003 at the age of 19 to start Theranos, which was later called Real-Time Cures. She was inspired both by the medical career of her grandfather, and by her summer internship at the Genome Institute of Singapore. Shortly after the internship, she wrote a patent application for a manual patch, which was able to diagnose and treat diseases.


Elizabeth Holmes graduated from Stanford University in 2003 at the age of 19 to start Theranos, which was later called Real-Time Cures. She was inspired both by the medical career of her grandfather, and by her summer internship at the Genome Institute of Singapore. Shortly after the internship, she wrote a patent application for a manual patch, which was able to diagnose and treat diseases.
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Elizabeth Holmes graduated from Stanford University in 2003 at the age of 19 to start Theranos, which was later called Real-Time Cures. She was inspired both by the medical career of her grandfather, and by her summer internship at the Genome Institute of Singapore. Shortly after the internship, she wrote a patent application for a manual patch, which was able to diagnose and treat diseases.

(Theranos / Screenshot)

Shonak Roy, a PhD student, Holmes assisted in the laboratory of Professor Channing Robertson, joined her in Theranos in May 2004 as her first employee. Robertson joined the board of the company as an advisor.


Shonak Roy, a PhD student, Holmes assisted in the laboratory of Professor Channing Robertson, joined her in Theranos in May 2004 as her first employee. Robertson joined the board of the company as an advisor.
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Shonak Roy, a PhD student, Holmes assisted in the laboratory of Professor Channing Robertson, joined her in Theranos in May 2004 as her first employee. Robertson joined the board of the company as an advisor.

(Shutterstock / MintImages)

To attract initial funding, Holmes used several family ties. The first two investors in Theranos were Tim Draper, the father of her childhood friend and former neighbor, and Victor Palmieri, one of her father's longtime friends. By the end of 2004, Holmes had raised almost $ 6 million.


Tim Draper defends Theranos on CNBC in 2018.
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Tim Draper defends Theranos on CNBC in 2018.

(CNBC)

The original design of the Theranos device in 2005 was a system of cartridges and readers, which depended on microfluidics and biochemistry. This prototype was named Theranos 1.0, and the company planned to license technology to pharmaceutical companies to help them avoid adverse reactions to drugs during clinical trials.


The original design of the Theranos device in 2005 was a system of cartridges and readers, which depended on microfluidics and biochemistry. This prototype was named Theranos 1.0, and the company planned to license technology to pharmaceutical companies to help them avoid adverse reactions to drugs during clinical trials.
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The original design of the Theranos device in 2005 was a system of cartridges and readers, which depended on microfluidics and biochemistry. This prototype was named Theranos 1.0, and the company planned to license technology to pharmaceutical companies to help them avoid adverse reactions to drugs during clinical trials.

(Jammy Photography / Shutterstock)

In November 2006, Henry Mosley was dismissed as Chief Financial Officer of Theranos after questioning the reliability of his technology and the integrity of the company.


In November 2006, Henry Mosley was dismissed as Chief Financial Officer of Theranos after questioning the reliability of his technology and the integrity of the company.
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In November 2006, Henry Mosley was dismissed as Chief Financial Officer of Theranos after questioning the reliability of his technology and the integrity of the company.

(Melia Robinson / Tech Insider)

Learn more.

In August 2007, Holmes used premature Theranos 1.0 in a study of a patient with terminal cancer patients in Nashville, Tennessee. Theranos also announces that he will sue three former employees for stealing intellectual property.


Trial tube assays are observed in the laboratory at the Institute for Cancer Research in Sutton, UK.
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Trial tube assays are observed in the laboratory at the Institute for Cancer Research in Sutton, UK.

(Reuters)

In September 2007, Theranos developed a new prototype, called Edison. The device was a modification of the robot-dosing robot from the company Fisnar from New Jersey. By that time, Holmes had picked up some Apple designers and put them in charge of the architecture of Edison's general appearance.


In September 2007, Theranos developed a new prototype, called Edison. The device was a modification of the robot-dosing robot from the company Fisnar from New Jersey. By that time, Holmes had picked up some Apple designers and put them in charge of the architecture of Edison's general appearance.
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In September 2007, Theranos developed a new prototype, called Edison. The device was a modification of the robot-dosing robot from the company Fisnar from New Jersey. By that time, Holmes had picked up some Apple designers and put them in charge of the architecture of Edison's general appearance.

(YouTube / Bot & Dolly)

Sunny Balwani joined the Theranos in September 2009. He knew Holmes from the summer of 2002. Balwani had experience in developing software and business.


Sunny Balwani joined the Theranos in September 2009. He knew Holmes from the summer of 2002. Balwani had experience in developing software and business.
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Sunny Balwani joined the Theranos in September 2009. He knew Holmes from the summer of 2002. Balwani had experience in developing software and business.

(Shayanne Gal / Business Insider)

Read more about Sunny Balwani.

By 2010, the initial boom hit the Silicon Valley. In the same year, Holmes and Balwani approached Walgreens with a business proposal for launching medical clinics. At the same time, Teranos also collaborated with Safeway.


By 2010, the initial boom hit the Silicon Valley. In the same year, Holmes and Balwani approached Walgreens with a business proposal for launching medical clinics. At the same time, Teranos also collaborated with Safeway.
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By 2010, the initial boom hit the Silicon Valley. In the same year, Holmes and Balwani approached Walgreens with a business proposal for launching medical clinics. At the same time, Teranos also collaborated with Safeway.

(Reuters)

New partnerships meant that Holmes had to create a new device that could carry out not only one class of blood tests. MiniLab was created in 2011 and got the 4th place after the iPhone model.


New partnerships meant that Holmes had to create a new device that could carry out not only one class of blood tests. MiniLab was created in 2011 and got the 4th place after the iPhone model.
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New partnerships meant that Holmes had to create a new device that could carry out not only one class of blood tests. MiniLab was created in 2011 and got the 4th place after the iPhone model.

(Shutters)

In early 2012, Theranos took on blood testing in the Safeway Health Clinic as a beta version. Chief medical officer Safeway expressed concern about the discrepancies and differences between the values ​​given by Teranos. Safeway CEO dismissed him and resigned next year. Theranos also signed an agreement with Walgreens in 2012 to launch its devices in the store, but have constantly missed the agreed deadlines.


In early 2012, Theranos took on blood testing in the Safeway Health Clinic as a beta version. Chief medical officer Safeway expressed concern about the discrepancies and differences between the values ​​given by Teranos. Safeway CEO dismissed him and resigned next year. Theranos also signed an agreement with Walgreens in 2012 to launch its devices in the store, but have constantly missed the agreed deadlines.
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In early 2012, Theranos took on blood testing in the Safeway Health Clinic as a beta version. Chief medical officer Safeway expressed concern about the discrepancies and differences between the values ​​given by Teranos. Safeway CEO dismissed him and resigned next year. Theranos also signed an agreement with Walgreens in 2012 to launch its devices in the store, but have constantly missed the agreed deadlines.

(Justin Sullivan / Getty)

Lieutenant Colonel David Shoemaker expressed concern about the Theranos regulatory strategy for the FDA in 2012 after Holmes approached him about deploying the device in the army. The Center for Medicaid and Medicare Services (CMS) then did a surprise check, where Balwani told them that the device is still in development. After the battle with James Mattis, who was aboard the Theranos, Shoemaker eventually agreed to a more limited experiment.


Lieutenant Colonel David Shoemaker expressed concern about the Theranos regulatory strategy for the FDA in 2012 after Holmes approached him about deploying the device in the army. The Center for Medicaid and Medicare Services (CMS) then did a surprise check, where Balwani told them that the device is still in development. After the battle with James Mattis, who was aboard the Theranos, Shoemaker eventually agreed to a more limited experiment.
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Lieutenant Colonel David Shoemaker expressed concern about the Theranos regulatory strategy for the FDA in 2012 after Holmes approached him about deploying the device in the army. The Center for Medicaid and Medicare Services (CMS) then did a surprise check, where Balwani told them that the device is still in development. After the battle with James Mattis, who was aboard the Theranos, Shoemaker eventually agreed to a more limited experiment.

(US Air Force / Sgt. Cody H. Ramirez)

In Terano all was strained. Jan Gibbons, a former scientist from Teranos, committed suicide in May 2013.


In Terano all was strained. Jan Gibbons, a former scientist from Teranos, committed suicide in May 2013.
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In Terano all was strained. Jan Gibbons, a former scientist from Teranos, committed suicide in May 2013.

(Steve Jurveson / Flickr)

In September 2013, Theranos launched its fourth model with a new website and an option made by Holmes in The Wall Street Journal, despite protests from several company scientists, saying the technology was not ready.


In September 2013, Theranos launched its fourth model with a new website and an option made by Holmes in The Wall Street Journal, despite protests from several company scientists, saying the technology was not ready.
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In September 2013, Theranos launched its fourth model with a new website and an option made by Holmes in The Wall Street Journal, despite protests from several company scientists, saying the technology was not ready.

(Skye Gould / Technical Insider)

A source: Wall Street Journal

The Partnership Fund purchased 5.6 million of Theranos Shares at a price of $ 17 per share in February 2014. Theranos was estimated at $ 9 billion, while Elizabeth Holmes had a net worth of almost $ 5 billion.


The Partnership Fund purchased 5.6 million of Theranos Shares at a price of $ 17 per share in February 2014. Theranos was estimated at $ 9 billion, while Elizabeth Holmes had a net worth of almost $ 5 billion.
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The Partnership Fund purchased 5.6 million of Theranos Shares at a price of $ 17 per share in February 2014. Theranos was estimated at $ 9 billion, while Elizabeth Holmes had a net worth of almost $ 5 billion.

(Larry Busacca / Getty)

Theranos and Holmes began to attract media attention by decorating the cover of Fortune magazine in June 2014.


Theranos and Holmes began to attract media attention by decorating the cover of Fortune magazine in June 2014.
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Theranos and Holmes began to attract media attention by decorating the cover of Fortune magazine in June 2014.

(Drew Kelly / Fortune)

A source: fortune

In early February 2015, a correspondent for the Wall Street Journal, John Carreyrou received a report on Teranos. On February 26, he contacted the former director of the laboratory in Teranos, who told him about unethical and harmful practices. At that time, the company operated on limited capacity and created false and unreliable results for patients. Teranos also thought about conducting HIV tests before the former laboratory director told Holmes and Balvani about it.


Wall Street Journal reporter John Carreyrou
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Wall Street Journal reporter John Carreyrou

(Hollis Johnson / Business Insider)

A source: Business insider

While Carreiro was investigating the company, the business continued as usual. In July 2015, Theranos received its first approval by the FDA. At this point, scientists began to raise some questions about the company's technologies.


The US Food and Drug Administration (FDA) is headquartered in Silver Spring, Maryland
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The US Food and Drug Administration (FDA) is headquartered in Silver Spring, Maryland

(Thomson Reuters)

A source: Business insider, Business insider

Shortly before Holmes planned to speak at the conference, Carreyrou published his first story, revealing the company's struggle to develop its technology for blood testing. Holmes came on stage and appeared on television to protect his company in the coming weeks.


Shortly before Holmes planned to speak at the conference, Carreyrou published his first story, revealing the company's struggle to develop its technology for blood testing. Holmes came on stage and appeared on television to protect his company in the coming weeks.
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Shortly before Holmes planned to speak at the conference, Carreyrou published his first story, revealing the company's struggle to develop its technology for blood testing. Holmes came on stage and appeared on television to protect his company in the coming weeks.

(Mike Blake / Reuters)

But the facts began to come out. In documents related to the FDA visit to the Theranos laboratory, the agency informed the company that it was sending an "untreated medical device".


One of the documents of the FDA.
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One of the documents of the FDA.

(FDA)

A source: Business insider

By November, the partnership with Safeway had failed, and the Walgreens relationship was on thin ice.


By November, the partnership with Safeway had failed, and the Walgreens relationship was on thin ice.
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By November, the partnership with Safeway had failed, and the Walgreens relationship was on thin ice.

(YouTube)

A source: Business insider

By early 2016, more regulators were finding problems with Theranos. In January, the Centers for Medicare and Medicaid Services, which regulate blood testing laboratories, named concerns that one of the Theranos laboratories posed an "immediate threat" to patients. Later in April, the SEC began its investigation in the company.


Blood samples are expected to be processed at Biobank, the world's largest sample for blood and urine analysis in the Manchester area, northern England, in the picture from March 18, 2010.
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Blood samples are expected to be processed at Biobank, the world's largest sample for blood and urine analysis in the Manchester area, northern England, in the picture from March 18, 2010.

(Phil Noble / Reuters)

A source: Business insider

In May 2016, Theranos president Sunny Balwani left the company, leaving Holmes the sole executive director.


Frames from the view of Sunny Balwani.
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Frames from the view of Sunny Balwani.

("60 minutes")

A source: Business insider

In June, Walgreens ceased cooperation with Theranos and closed all Wellness Centers, which he opened in Arizona and California.


An example of health centers.
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An example of health centers.

(Steve Jurveson / Flickr)

A source: Business insider

In July, CMS banned Holmes from the testing laboratory for two years. Theranos later in 2017 settled with the regulator for $ 30,000. As part of the settlement, Theranos agreed not to own or operate a clinical laboratory until 2019.


In July, CMS banned Holmes from the testing laboratory for two years. Theranos later in 2017 settled with the regulator for $ 30,000. As part of the settlement, Theranos agreed not to own or operate a clinical laboratory until 2019.
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In July, CMS banned Holmes from the testing laboratory for two years. Theranos later in 2017 settled with the regulator for $ 30,000. As part of the settlement, Theranos agreed not to own or operate a clinical laboratory until 2019.

(CBS This Morning через YouTube / Screengrab)

В следующем месяце Theranos, наконец, были представлены на научной конференции, хотя деталей о технологиях компании все еще не хватало. Theranos, по-видимому, поворачивается к тому, чтобы сосредоточиться на своем новом примере процессора MiniLab.


Генеральный директор Theranos Элизабет Холмс на ежегодной конференции Американской ассоциации клинической химии в 2016 году.
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Генеральный директор Theranos Элизабет Холмс на ежегодной конференции Американской ассоциации клинической химии в 2016 году.

(YouTube)

A source: Business insider

Презентация в течение лета предвещала поворот Theranos всего несколько месяцев спустя, когда компания закрыла свои клинические лаборатории, уволила около 340 сотрудников и отправилась работать исключительно на технологию miniLab.


MiniLab, представленный на конференции AACC в августе 2016 года.
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MiniLab, представленный на конференции AACC в августе 2016 года.

(Лидия Рамси)

A source: Business insider

Затем судебные иски начали накапливаться со всех сторон, включая Walgreens, инвесторов и пациентов в штате Аризона. Эти случаи в конечном итоге были урегулированы, и Теранос выплатил миллионы, чтобы вернуть пациентов, которые прошли тесты в Аризоне.


Затем судебные иски начали накапливаться со всех сторон, включая Walgreens, инвесторов и пациентов в штате Аризона. Эти случаи в конечном итоге были урегулированы, и Теранос выплатил миллионы, чтобы вернуть пациентов, которые прошли тесты в Аризоне.
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Затем судебные иски начали накапливаться со всех сторон, включая Walgreens, инвесторов и пациентов в штате Аризона. Эти случаи в конечном итоге были урегулированы, и Теранос выплатил миллионы, чтобы вернуть пациентов, которые прошли тесты в Аризоне.

(Мелиа Робинсон / Tech Insider)

A source: Business insider

Некоторые из крупных имен на борту Theranos вскоре ушли, в том числе бывшие государственные секретари США Генри Киссинджер и Джордж Шульц. Компания также провела очередной раунд увольнений.


Бывший госсекретарь Генри Киссинджер прибывает на гала-концерт «100 самых влиятельных людей в мире», организованный журналом Time Magazine в Нью-Йорке 8 мая 2007 года.
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Бывший госсекретарь Генри Киссинджер прибывает на гала-концерт «100 самых влиятельных людей в мире», организованный журналом Time Magazine в Нью-Йорке 8 мая 2007 года.

(REUTERS / Лукас Джексон)

A source: Бизнес-инсайдер, Business insider

К концу 2017 года Theranos нуждался в наличной инфузии и заключил сделку с Fortress Investment Group за 100 миллионов долларов в обеспеченном долговом финансировании, чтобы получить ее до 2018 года. Сделка полагалась на то, что Theranos натолкнуло определенные этапы развития, так как работала над ее Вирус Zika одобрен FDA.


К концу 2017 года Theranos нуждался в наличной инфузии и заключил сделку с Fortress Investment Group за 100 миллионов долларов в обеспеченном долговом финансировании, чтобы получить ее до 2018 года. Сделка полагалась на то, что Theranos натолкнуло определенные этапы развития, так как работала над ее Вирус Zika одобрен FDA.
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К концу 2017 года Theranos нуждался в наличной инфузии и заключил сделку с Fortress Investment Group за 100 миллионов долларов в обеспеченном долговом финансировании, чтобы получить ее до 2018 года. Сделка полагалась на то, что Theranos натолкнуло определенные этапы развития, так как работала над ее Вирус Zika одобрен FDA.

(Джейми Маккарти / Гетти)

A source: Business insider

Затем в марте SEC обвинила Холмса, Бэлвани и компанию в «массовом мошенничестве», хотя Теранос и Холмс обосновались. В рамках резолюции Холмс заплатил штраф и не может быть директором или должностным лицом публично торгуемой компании в течение 10 лет.


Холмс принимает участие в конференции WSJDLive в Лагуна-Бич
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Холмс принимает участие в конференции WSJDLive в Лагуна-Бич

(Thomson Reuters)

A source: Business insider

Опираясь на неудачи в разработке теста Zika, Theranos уволил большинство своих оставшихся сотрудников и обратился к инвесторам за дополнительным финансированием.


Опираясь на неудачи в разработке теста Zika, Theranos уволил большинство своих оставшихся сотрудников и обратился к инвесторам за дополнительным финансированием.
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Опираясь на неудачи в разработке теста Zika, Theranos уволил большинство своих оставшихся сотрудников и обратился к инвесторам за дополнительным финансированием.

(Лев Корреа / AP Images)

A source: Business insider

Theranos в своем декабрьском письме сообщила инвесторам, что министерство юстиции продолжает расследование компании, что означает, что уголовные обвинения могут принести Холмсу и Балвани. Компании по-прежнему грозит дефолт по соглашению с Fortress. Любое событие может означать конец саги 15-летней компании.



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(REUTERS / Брендан Макдермид)

A source: Business insider

В июне 2018 года Холмс ушел с поста генерального директора Theranos, оставаясь председателем правления. Департаменту юстиции также было предъявлено обвинение в девяти пунктах проволочного мошенничества.


Холмс принимает участие в конференции WSJDLive в Лагуна-Бич
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Холмс принимает участие в конференции WSJDLive в Лагуна-Бич

(Thomson Reuters)

A source: Business insider

К концу лета это, казалось, конец линии для самой компании. Wall Street Journal сообщил во вторник, что компания сообщила своим акционерам, что планирует официально распустить. Теранос сказал, что он работает над тем, чтобы дать Fortress право собственности на патенты компании, а оставшиеся деньги – кредиторам.


К концу лета это, казалось, конец линии для самой компании. Wall Street Journal сообщил во вторник, что компания сообщила своим акционерам, что планирует официально распустить. Теранос сказал, что он работает над тем, чтобы дать Fortress право собственности на патенты компании, а оставшиеся деньги - кредиторам.
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К концу лета это, казалось, конец линии для самой компании. Wall Street Journal сообщил во вторник, что компания сообщила своим акционерам, что планирует официально распустить. Теранос сказал, что он работает над тем, чтобы дать Fortress право собственности на патенты компании, а оставшиеся деньги – кредиторам.

(Theranos)

A source: Журнал "Уолл Стрит

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