This post has been updated to include comments from Theranos.
Theranos founder and CEO Elizabeth Holmes has long touted her company’s revolutionary technology, saying that just a few drops of blood and its proprietary machines would replace the vials of blood needed for traditional tests. However, based on a series of reports, Holmes’s ambitions appeared to have outstripped the company’s progress.
Theranos and Holmes have dominated headlines since mid-October when the Wall Street Journal published an expose that accused Theranos of not using its own technology to test most of its blood samples. Rather, it relied on industry standard machines made by companies like Siemens, which are also used by traditional labs. The WSJ report also alleged that Thernaos cheated on proficiency tests that were vital to certifications. Theranos has countered those claims, saying that over 50% of its tests use proprietary technology and methods beyond the nanotainer, the name of its super small blood sample container.
Holmes, who dropped out of Stanford University to start the company at age 19, seems to have let her hopes for nanotainers and small-sample blood testing outstrip the technology’s true capabilities, according to the latest report in the WSJ. One anonymous employee recounted a story about sitting in a hotel room with Holmes in Zurich the night before a big meeting with Novartis:
They drew drops of their own blood to try the company’s testing machine, but the devices wouldn’t work, says someone familiar with the incident. Sometimes the results were obviously too high. Sometimes they were too low. Sometimes the machines spit out only an error message.
After two hours, the colleague called it quits, leaving Ms. Holmes still squeezing blood from her fingers to test it again.
The late-night testing never fixed the machines. In the meeting with a group of Novartis executives, the three machines returned error messages during the demonstration, the employee told the WSJ. The story is just one of a series about Holmes that chronicle her background and how she developed the company.
Theranos responded that there was only one error message due to a person knocking out the power cord during the Novartis meeting. The company has disputed the ongoing reports concerning its allegedly faltering technology, including this most recent report.
“Unfortunately, the Wall Street Journal continues to print false and misleading comments from two former disgruntled employees,” said Brooke Buchanan, Theranos’ vice president of communications. “Theranos is really focused on continuing its mission to provide access, transparency, and preventative care to patients around the country.”
Holmes’s graced the front cover of Fortune’s June issue, which helped boost her profile in Silicon Valley and drew attention to her biotech startup Theranos. That cover story said Theranos “currently offers 200–and is ramping up to offer more than 1000–of the most commonly ordered blood diagnostic tests, all without the need of a syringe.” However, that sum was proven false in more recent company updates, as Fortune’s Roger Parloff explained.