Timetable Delayed

Two years ago we first heard about Palo Alto-based Theranos and its revolutionary blood testing technology. With only a few drops of blood Theranos claimed that its machines could run hundreds of blood tests.

Theranos tests at Walgreens: a fraction of competitors' prices.

Theranos's processes are faster, cheaper and more accurate than the conventional methods and require only microscopic blood volumes, not vial after vial of the stuff.

At the time we said that "It does seem too good to be true", yet why not? Multi-billion dollar businesses that didn't exist 15 years ago have arisen seemingly from nowhere, disrupting entire industries.

In October serious questioning of Theranos' technology began [bold added].

the Wall Street Journal ran a report that Theranos has overstated its technology’s reach and reliability. Theranos has attracted great acclaim because it claims to be able to perform a wide variety of tests by drawing a few drops of blood instead of using a full-sized needle to take larger samples; and because of its promises to make it cheaper and easier for consumers to get blood tests without having to go through a doctor. However, the Journal’s article argued that its tests are not reliable, and revealed that it does only a few tests with its own devices, using other firms’ technology for most of them.

In response to the WSJ article and questions from scientists and regulators founder and CEO Elizabeth Holmes says

she would release data proving their machines work—the data academics, clinicians, and doctors have been asking to see for over a year, comparing Theranos’ tests to industry standards.

Your humble observer knows nothing about the science of blood analysis or microfluidics. As a student of human behavior, however, let me make a couple of obvious points about why we latched on to this story so willingly:

(SF Business Times photo)

1) 31-year-old Elizabeth Holmes came along at just the right time to be declared the next Steve Jobs. Her oft-worn black turtleneck cinches the comparison, and the dearth of young, female self-made billionaires made her a rockstar.

2) No patient enjoys the inconvenience and discomfort of drawing blood and the days waiting for results. When Theranos promised to be faster, cheaper, and better, everyone (except competitors) wanted it to be true.

We'll defer judgment until after Elizabeth Holmes releases the information and it has been reviewed by experts. One result is certain: unless she has complete vindication the timetable for the IPO will be delayed.