Biotechnology Scandals- Part 2

Theranos

A private healthcare technology company founded by Elizabeth Holmes at age 19 in 2003.

multiple blood tests from a single finger prick

The company promised to revolutionize the medical industry with a breakthrough technology that could perform ____________ faster and cheaper than traditional labs

Nanotainer

Theranos’ device for collecting and analyzing a droplet of blood from a fingertip, eliminating the need for traditional needles and large blood samples.

sophisticated genetic analyses

With that they can perform hundreds of tests, from standard cholesterol check to ____

Edison (later on, miniLab)

The blood would then be tested by another device, the microwave sized machine called the “____”

“We tried everything else and it failed, so let's call it the Edison.”

Holmes reportedly named the device "Edison" after inventor Thomas Edison, stating, "______”

how much blood

The patent was unclear on _______ the Edison would require to conduct these blood tests.

management incompetence

Based on interviews with ex employees, the newspaper alleged rampant ______ and and claimed that Theranos had grossly exaggerated the capabilities of its proprietary technology.

commercially available testing technology

Theranos could allegedly not deliver accurate results, and would often use ___________ instead of its own

John Carreyrou

In 2015, investigative journalist ______ published a series of articles in The Wall Street Journal, exposing the company's fraud and deception.

Inconsistent Results

Patients reported receiving conflicting test results from Theranos . Analyzer returned false positive and false negative

Limited Testing

Theranos only performed a small number of tests on its device, which raised concerns about its ability to provide accurate results for a wide range of conditions.

Lack of Transparency

Theranos was highly secretive about its technology and methods, refusing to share details with regulators or independent experts. There is lack of peer reviewed research.

Use of Traditional Lab Equipment

Theranos had purchased standard blood analyzer devices and was running the vast majority of its blood tests through those machines instead of using its own analyzer.

No Auditors

Investors never even saw audited income statements, balance sheets, or cash flow statements.

Legal Consequences

Theranos: The Limits of the “Fake It Till You Make It” Strategy

Jan. 3, 2022

On __________, Theranos founder Elizabeth Holmes was found guilty of four out of 11 fraud charges which included wire fraud, securities fraud, and conspiracy to commit wire and securities fraud.

financial losses , medical harm , and other damages

Theranos faced numerous civil lawsuits from investors, patients, and other parties who claimed to have been defrauded by the company's false claims. The lawsuits sought damages for _______________.

September of 2018

Theranos started shutting down its clinical labs and wellness centers in late 2016, finally ceasing operations in ___________

Noble cause corruption

A corruption caused by the adherence to a teleological ethical system, suggesting that people will use unethical or illegal means to attain desirable goals, a result which appears to benefit the greater good.

Increased Skepticism

The scandal made people more skeptical of new technologies and startups, especially

those that make bold claims or promises.

Heightened Scrutiny

The scandal led to increased scrutiny of new technologies and startups by regulators, investors, and the media.

Damage to Reputation

The scandal tarnished the reputation of the entire

startup industry, particularly in Silicon Valley, which was seen as a hotbed of hype and deception.