Theranos – Find Out Everything that Happened to Theranos

Theranos Trial
Theranos Trial
Theranos Trial

Theranos was a privately held American enterprise that was marketed as a game-changing health technology company.

It was a groundbreaking idea conceived by a lady recognized as a genius who referred to herself as a female Steve Jobs at the time.

Theranos was a privately held healthcare technology business created in 2003 by Elizabeth Holmes, then 19 years old.

What Is Theranos?

Theranos Inc., a consumer healthcare technology firm, was originally valued at $10 billion, and its founders promised that the company would transform the blood-testing market.

Elizabeth Holmes, the founder of Theranos, was found guilty of four out of eleven fraud charges on January 3, 2022.

However, the technological advance described by CEO Elizabeth Holmes and previous company president Ramesh Balwani was never shown, and Holmes and Balwani’s claims amounted to plain deception.

The SEC eventually charged Holmes and Balwani with substantial fraud.

The two CEOs agreed on a settlement conditional on court approval.

According to a press release from the United States Attorney’s Office for the Northern District of California, Holmes and Balwani were charged with wire fraud on June 15, 2018.

On the same day, Holmes resigned as CEO of the company.

A Quick Glance at Theranos
  • Theranos reportedly raised $724 million in cash from venture capitalists and individual investors, based entirely on the company’s assertions.
  • The technological advance described by CEO Elizabeth Holmes and previous company president Ramesh Balwani was never demonstrated, and Holmes’ and Balwani’s claims amounted to plain deception.
  • The Securities and Exchange Commission charged Theranos, its founder and CEO Elizabeth Holmes, and its former President Ramesh”Sunny” Balwani with fraud.
  • Holmes was stripped of control of the company, ordered to refund millions of shares, and forbidden from functioning as an officer or director of a public corporation for ten years.
  • Theranos began closing its clinical labs and wellness clinics in late 2016, eventually discontinuing operations in September 2018.
  • Elizabeth Holmes’ net wealth reportedly fell from $4.5 billion to nothing by June 2016.
Theranos CEO Elizabeth Holmes

Elizabeth Anne Holmes (born February 3, 1984) is a former biotechnology entrepreneur from the United States who was convicted of criminal fraud.

In 2003, Holmes founded and served as the CEO of Theranos, a now-defunct health technology business that claimed to have revolutionized blood testing by developing technologies that could use remarkably little volumes of blood, such as from a fingerprick.

On the basis of a $9 billion value of her company, Forbes declared Holmes the youngest and wealthiest self-made female billionaire in America in 2015.

As discoveries of suspected fraud regarding Theranos’ claims began to surface the following year, Forbes reduced its estimate of Holmes’ net worth to zero, and Fortune named her in its feature piece on “The World’s 19 Most Disappointing Leaders.”

Understanding Theranos

In 2003, Elizabeth Holmes, then 19, started Theranos, a privately held healthcare technology firm.

Theranos claimed that by using a “nanotainer” (a small device designed to draw, retain, and analyze a droplet of blood from a patient’s fingertip) and its proprietary “Edison” testing technology, the device could run a slew of tests on a patient’s physiology in minutes and at a fraction of the cost of current technology.

After more than ten years of fundraising and a high valuation of around $10 billion, the tide began to change in 2015 due to press pessimism.

In a New Yorker profile, Holmes’ explanations of Theranos’ technology were described as “comically vague,” citing Holmes’ statement that “a chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel.”

The Wall Street Journal then published an extremely negative report on Theranos.

The publication claimed pervasive management ineptitude and that Theranos had drastically inflated the capabilities of its proprietary technology based on interviews with ex-employees.

According to one former senior employee, just a small percentage of all testing were performed on “Edison machines,” and the majority of tests were performed on rivals’ equipment, despite Theranos’ assurances to the contrary. If accurate, this would have been a breach of FDA regulations in the United States.

The FDA then released two reports from its ongoing Theranos probe. They were critical, claiming that Theranos used “uncleared medical device(s),” kept inadequate records, mishandled complaints, and failed to conduct audits and present supplier qualifications. An investigator stated about an unidentified medical equipment that “the design was not validated under actual or simulated use conditions.” In addition, Theranos did not “verify the device complies to established user demands and planned purposes.”

The Centers for Medicare & Medicaid Services (CMS) issued a letter in early 2016 stating that a California-based lab employed by Theranos posed “immediate hazard to patient health and safety.”

CMS issued a 10-day deadline for the corporation to rectify the problems or suffer daily fines and/or loss of CMS approval for Medicare payments.

The US Securities and Exchange Commission (SEC) formally charged Theranos, Holmes, and former company president Ramesh “Sunny” Balwani with “massive fraud” after a couple of years of settled lawsuits, dissolved relationships with major partners such as Walgreens, and broken deals with the likes of Safeway.

According to the complaint, the company raised more than $700 million by fooling investors about its performance for years.

Both Theranos and Holmes agreed to settle the charges of fraud pending judicial approval.

Holmes was forced to relinquish control of the company, return millions of shares, and was forbidden from working as an officer or director of a public corporation for ten years.

Several works, including John Carrreyrou’s 2018 novel Bad Blood: Secrets and Lies at a Silicon Valley Startup, ABC’s 2019 podcast The Dropout, and Alex Gibney’s 2019 documentary The Inventor: Out for Blood in Silicon Valley, are based on Theranos and Elizabeth Holmes.

A Timeline of Theranos’s Rise and Fall

2003: Elizabeth Holmes, a 19-year-old Stanford chemical and electrical engineering dropout, started Theranos with the goal of transforming blood testing.

2004: Theranos raised $6.9 million in early fundraising and was valued at $30 million.

2007: After raising another $43.2 million in early-round fundraising, the company’s valuation reached $197 million.

2010: Theranos was valued at $1 billion after additional rounds of fundraising.

2013: After a decade of working “in the dark,” Holmes revealed Theranos to the public through press appearances and the launch of a website.

2014: Theranos was valued at roughly $9 billion after raising over $400 million in investment.

Because of her 50% ownership, Holmes virtually became a multibillionaire.

December 14, 2014: Despite her company’s high valuation, Holmes remained tight-lipped about Theranos’s technology.

It was discovered that the invention has never been peer reviewed in medical publications.

July 8, 2015: Capital BlueCross, a 725,000-customer Pennsylvania insurer, selected Theranos as its preferred lab work provider. Theranos was worth $10 billion.

15 October 2015: The Wall Street Journal published a scathing story about Theranos.

Holmes appeared on “Mad Money” and other media sources to repair the damage.

The Wall Street Journal report “shocked” her, and she stated that Theranos provided over 1,000 pages of documentation to contradict the charges.

The Wall Street Journal maintained its reporting.

16th of October, 2015: According to a subsequent Wall Street Journal piece, Theranos was obliged to stop using its unapproved nanotainer for all but one type of blood test.

The 27th of October, 2015: The FDA has issued two Form 483 reports from an ongoing inquiry into Theranos.

28th of October, 2015: Just days before the initial Wall Street Journal piece was published, Fortune reported that Theranos had attempted to obtain an extra $200 million in Series C-3 capital.

10 November 2015: A $350 million partnership with Safeway fell through after Theranos missed key rollout deadlines and Safeway management questioned the authenticity of the test results.

27th of December, 2015: Another story in the Wall Street Journal said that Theranos’ administration was ineffective and that tests were rigged to obtain better results for its Edison devices.

27 January 2016: The Centers for Medicare & Medicaid Services (CMS) issues a damning assessment on Theranos’ lab in California.

28 January 2016: Following the CMS findings, Walgreens Boots Alliance Inc. (WBA) chose to temporarily close the Theranos Wellness Center in its Palo Alto store and discontinue its use of Theranos’ Newark, California lab.

May 1, 2017: Theranos resolved a lawsuit with one of its largest investors, Partner Fund Management, after the hedge fund accused the business of securities fraud.

Theranos had previously reached a settlement with the Centers for Medicare and Medicaid Services and the Arizona Attorney General.

March 14, 2018: Theranos, its creator and CEO Elizabeth Holmes, and its former President Ramesh “Sunny” Balwani were charged with enormous fraud by the SEC.

June 15, 2018: Both Holmes and Balwani were indicted by a federal grand jury on nine counts of wire fraud and two counts of conspiracy to commit wire fraud.

According to a news release from the US Attorney’s Office, Holmes and Balwani “engaged in a multi-million dollar plan to deceive investors and a separate scheme to defraud doctors and patients” in order to promote Theranos.

Holmes resigned as CEO of Theranos earlier in the day, but she remains chair of the company’s board.

Theranos Trial

Sunny Balwani, a former Theranos executive and Elizabeth Holmes’ romantic partner, might face a verdict this week on allegations of defrauding company investors and patients, bringing the final chapter of the Theranos legal story to a climax.

On Tuesday, lawyers in the case began closing arguments in the trial in a courtroom in San Jose, California. Jurors will commence deliberate after both parties have rested their cases. Balwani faces up to 20 years in jail on accusations similar to those leveled against his alleged co-conspirator, Holmes, whose case was resolved in January of this year.

Throughout the course of Balwani’s trial, which began in March, federal prosecutors have painted him as an unwitting partner in a scheme devised by Holmes, his secret lover at the time. In turn, his lawyers portrayed him as a devoted soldier attempting to salvage the blood-testing company.

“Mr Balwani is not a helpless victim.” Prosecutor Jeffrey Schenk stated near the end of his three-and-a-half-hour closing argument on Tuesday, “He is the perpetrator of the fraud.”

Elizabeth Holmes and Theranos Documentaries

When it was revealed that Theranos was a scam, multiple films and news specials deconstructed the incredible story.

“20/20: The Dropout”

Following the success and praise of the podcast of the same name, ABC aired “The Dropout,” a 20/20 special that analyzes the rise and fall of Theranos and features interviews with Holmes and people in her orbit, such as employees, coworkers, and relatives.

“The Inventor: Out for Blood in Silicon Valley”

The spectacular HBO documentary “The Inventor: Out of Blood in Silicon Valley” centers on Holmes and her partner, Theranos COO Sunny BalwaniIn.

The documentary includes interviews with journalists, professors, consultants, investors, and whistleblowers to delve deeper into Holmes’ thinking and the illusion she offered the world.

“60 Minutes: Elizabeth Holmes and the Theranos Deception”

CBS was one of several news outlets that covered the Theranos issue, airing the 60 Minutes series “Elizabeth Holmes and the Theranos Deception.”

Norah O’Donnell, a journalist, investigates Holmes’ path of dishonesty and the people she harmed along the way.

“Valley of Hype: The Culture that Built Elizabeth Holmes”

“Valley of Hype: The Culture that Built Elizabeth Holmes,” Yahoo Finance’s first feature documentary, focused on Theranos’ failure and exposes the peculiar startup culture of Silicon Valley that influenced Holmes to launch the company despite all guardrails.

“60 Minutes Australia: Elizabeth Holmes Exposed”

“60 Minutes Australia,” like “60 Minutes” in America, is noted for its extensive and investigative journalism.

This episode, led by journalist Tara Brown, examines Theranos’ fraudulent practices and includes interviews and film of Holmes during her employment with the company.

Podcasts about Elizabeth Holmes and Theranos

Several podcasts on Theranos and Elizabeth Holmes have been made in addition to documentaries and TV specials.

“The Dropout”

This is the podcast that inspired the “20/20” special as well as the impending Hulu series. Its first six episodes, which documented Holmes’ fraudulent business operations, were aired in 2019, and more episodes being released on a regular basis following her criminal trial. The most recent episode, “The Verdict,” premiered on January 5, 2022.

“Bad Blood: The Final Chapter”

“Bad Blood,” guided by John Carreyrou, the journalist who exposed Theranos and Holmes, takes listeners on a trip that examines the culture that created Holmes and led to her company’s demise. This podcast has the same name as Jennifer Lawrence’s upcoming Theranos film on Apple TV+.

“Elizabeth Holmes: The Downfall of a Billion Dollar Startup”

The 30-minute podcast from The Times delves into the WSJ exposé that changed the path of Theranos and Holmes’ lives forever.

Theranos Whistleblowers

As featured in The Dropout, a Hulu series about Holmes and her company Theranos, both Cheung and Shultz were whistleblowers at Theranos.

In order to disclose the truth about Theranos, the two corroborated their statements and told the Wall Street Journal about their experiences in 2015.

Theranos Movie

The Inventor: Alex Gibney directed and produced the 2019 documentary film Out for Blood in Silicon Valley. Elizabeth Holmes and her previous business Theranos are important to the story. It’s thought to be a companion piece to the book Bad Blood: Secrets and Lies in a Silicon Valley Startup.

Release dates: January 24, 2019 (Sundance); March 18, 2019 (HBO)

Jigsaw Productions and HBO Documentary Films are the production companies.

Produced by: Erin Edeiken, Alex Gibney, Jessie Deeter

FAQs

Was Theranos Publicly Traded?

No. Theranos was a privately held company until its closure and liquidation in September of 2018.

Is Theranos Still Open?

Theranos began closing clinical labs and wellness centers in late 2016, eventually ceasing operations in September 2018.

What Did Theranos Do Wrong?

Theranos claimed to have created blood tests that only required a little amount of blood and machines that could run the tests fast. Theranos reportedly raised $724 million in cash from venture capitalists and individual investors, based largely on such assertions.

How Much Did Walgreens Invest in Theranos?

Walgreens is said to have committed $140 million in its collaboration with Theranos.

Is Elizabeth Holmes Still Wealthy?

According to Forbes, Elizabeth Holmes’ net worth had plummeted from $4.5 billion to “nothing” by June 2016.

How much was Theranos stock worth?

At the time, Holmes held a 50% share in Theranos, a firm created in 2003 by private investors who purchased the aforementioned stakes at a company valuation of around $9 billion.

Is Theranos Still in Business?

The SEC charged Holmes and her ex-boyfriend, Theranos COO Sunny Balwani, with 11 counts of fraud against investors and patients in 2016. By 2019, Theranos will be utterly defunct.

Did the Wall Street Journal exposed Theranos?

The Journal’s investigative reporting in 2015 and 2016 revealed how Theranos’s technology did not work, how the blood-testing business attempted to cover up its mistakes, and how patients’ lives and health were compromised.

When did The Wall Street Journal publish Theranos?

Theranos’ partnership with Safeway is less well-known than the Theranos-Walgreens pact. Another news story authored by Carreyrou and published by the Wall Street Journal on November 10, 2015, was headed “Safeway, Theranos Split after $350 Million Deal Fizzles.”

What was Theranos stock symbol?

Seeking Alpha’s Theranos (THERA) Stock Price Today, Quote, and News

Did Theranos machines work?

There was no technology. Despite all of its glitzy promises, Theranos was unable to accurately execute tests in its equipment on a single drop of blood.

The organization’s charismatic founder, Elizabeth Holmes, and former company president Sunny Balwani were charged for fraud two years after the labs were closed.

How much is Theranos worth today?

Her firm, Theranos, was valued at $9 billion at its peak.

What did Theranos do wrong?

They exposed board members’ lies, a culture of intimidation and secrecy, technology that regularly failed quality assurance, and, most importantly, results provided to real patients that were fundamentally erroneous, based on which life-changing medical decisions were made.

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