Name: Elizabeth Holmes defends Theranos amid media scrutiny at Fortune's Global Forum
Uploaded: 2015-11-03
Duration: 14 min 6 s
Description: The CEO sits down with Fortune's Alan Murray to discuss setbacks the company has had concerning its blood tests.

Thank you, everyone. Elizabeth, thank you for being with us. As you know, Fortune went all in on the Theranos story. I mean, the notion that with a single pin prick you could get blood and do many dozens of blood tests at one time at a much lower cost. Was compelling as it was obviously to your funders. I think we were the first magazine to put you on the cover. We even put you last year on our Businessperson of the Year list, which will be honoring you and others for tonight. So it was a shock to us to discover a few weeks ago that you're really only doing one test Just with that pinprick. Do you think the hype, did we both let the hype get ahead of the story if you're only doing one test? Let me just start by saying, and I'll talk about that decision to transition our systems to the FDA framework which let us right now, as of this moment for the last few weeks only, To run just one test in a minute. But I think you know part of this is we've looked at all of these articles over the course of the last couple weeks and I'm an engineer and we've tried to approach this the way we approach everything which is understanding you know what was written What's accurate what's not accurate and how did it happen. And so we went through these in detail and we've seen that much of what has been written is not accurate and so we've asked ourselves What did we do to get into this kind of place in which we're reading this kind of stuff all over the national media? And what we've concluded from that is that we need to do a better job of communicating, and We wanna be the best at that, that means you can tell from this coverage that I am definitely not a PR person and so. Well We need to get that out there and part of that was that we have not put into the public domain much of our technology and operations historically. We talked about our work that we are doing on the policy front in the context of prevention and early detection but we haven't talked about Are devices, and in fact, we've developed hundreds of assets. And I wanna come back to that about putting the data and the information out in the public domain so people can really see what you're doing. But let's stick with the communications thing for a second, because I actually think you are an extraordinary communicator, and I wanna show a clip We have from the Ted Talk that you did, I don't know nine months ago? Yeah. Let's just take a look at this clip and then talk about it. Can we play the clip please? We've made it possible to run comprehensive laboratory tests from a tiny sample. or a few drops of blood that could be taken from a finger. And we've made it possible to eliminate the tubes and tubes of blood that traditionally have to be drawn from an arm. And replaced it with the Nanotainer. So, we have made it possible to do comprehensive lab test from a prick from the finger and to eliminate the tubes and tubes of blood. Yeah. In retrospect when you look at where you are today, one test with the prick of blood Wasn't that going too far? So we have developed hundreds of tests over the course of the last 12 years that can run a tiny sample using a proprietary Theranos technology. And part of when I talk about communicating, what we need to do is we need to get that data out there. And I've talked publicly over the course of the last couple of weeks that we've made a decision now. To take the data that we've generated for our FDA submissions and put it into the public domain, and we will, but since you're focused on the one test, let's talk about why we're doing that. I have- And by the way it's not just me that was focused on the one test, that was sort of the story, the Theranos story was all about this one Pinprick that would let you do comprehensive blood testing. That was the story. Yeah, well I think this is what we sorta need to dissect a little bit. So when you look at Theranos, Theranos makes devices. We make chemistries. We make consumables, we make software, and we have a little tube called a nanotainer which we use to collect our blood. We went in, in 2013 to the FDA and we said we want to be the company that works on building a model for taking all of this technology that's developed under the lab framework through the FDA framework. And we believe in it so strongly, because we believe in And individual's right to access their own data. And so we have been. And we've been working on that for two years now. What happened in the last few weeks is that we decided that we would take just the tube, not the tests, not the devices, not the chemistry, and cut it over to the FDA quality system, which meant that temporarily as we transition Which has now been just a few weeks. We would not be using that tube to collect our samples, right? This has nothing to do with- Now you're confusing me. How many tests are doing right now from a simple pin prick, as you described in that TED Talk? So right now, just because of this FDA transition, One. We're only doing one. Okay. Right? Okay, so- But that doesn't mean that we don't have the technology to do them or that we haven't done them in the past. And are you confident that you will get the FDA approval to do the 200 that are a standard part of the, the draw. Well, we've. So there's, there's multiple parts to this. One is The validation of those tests under the lab framework. The other one is the FDA submission. And this is an area of evolving policy that we're working to create a leadership position in. We've never talked publicly about what the status of what we're doing with FDA is because we just hadn't felt that was appropriate until we got into all of this recent press communications. But We're incredibly confident in the data that we've submitted to the agency. We've worked on it for two years and we've met the standard of comparing our tubes to vaccutainers, which are the big tubes that come from the arm. And we're hopeful that we'll see those [ INAUDIBLE ]. So you feel confident that that vision you laid out nine months ago Will still happen. That you'll be able to do comprehensive tests from a single [ CROSSTALK ]. Absolutely and we've done it in the past. And we're gonna continue to do it in the future. What have you, this has been a baptism by fire for you. It's obviously been a very tough, that was a very tough story in the Wall Street Journal. Other people have piled on. What have you learned in the process? I mean you started this at a very young age. You were ony 19 years old. There's no reason why you should know what it's like to run a 9 billion dollar company or deal with this kind of a press attack. What are the most important lessons you have taken away from this? I've learned the point about communication. Yeah, I think that we as a technology company, I spent ten years working with a team of engineers and scientists. We have a huge number Ph. Ds in our company to develop these hundreds of assays. And we never talked to the press once, right? I mean, we barely had a website. But you talked Now for ten years. And the first time we ever were in the press, ever, in terms of communicating externally was in the fall of 2013 when we began to launch our consumer retail infrastructure. And the reason that we did it then is because so much of what I want my life's work to be about is Empowering, and enfranchising people with the right in access to their own health information. Our company is actually not just about a pin prick, it's about access, and it's about the ability for people to afford care, and to get convenient care, and to get early detection, and that means low prices, it means convenient locations, but What we've seen in this is that we never talked about the technology and operations on the back end because we were so focused on our intellectual property. And what we want to do with this now is introduce this to the world so that people can see what we've built. One of the things that you've seen in the last few weeks that a lot of medical experts have come out expressing skepticism about Your technology in part because they don't see peer reviewed research. They don't have access to your data. So, you think in retrospect you should have been more transparent? I think right now we want to trade a lead in transparency. I made a call that if we would be the first lab with the confidence to submit our test to FDA that that would be the way to get the data out. But there's no reason we can't do peer review and there's no reason we can't publish other stats and we're gonna do that. What about governance? You put together this incredible board of directors that included George Schultz, Henry Kissinger, Sam Nun, Admiral Roughhead. Very distinguished individuals, none of whom have ever run a company and none of whom knew anything about the science of what you were doing. Well we invited people who were brilliant, strategic minds. Many of whom serve on some of the boards of the best public companies. And they've played a role as we've thought about how we can leverage technology to transform policy in the healthcare space. And They still play a role in our company, in the strategic sense. But would you have done the board differently in retrospect, knowing what you know now? Maybe have some regulatory experts, some people who could have helped you with the FDA process? You know, we began building this medical board. And I think doing that at a board level was a really good decision. I And we, we, we chose to jump into this FDA world, and knowing that it was an area of evolving policy, knowing that it would be hard. And, and I was the person who chose voluntarily to stop using our nanotainer tube in the last few weeks because I think it's the right thing to do. Cuz there's no other way to build this model. Who, who do you rely on? I mean this was such a, Such a big thing that happened to you, if I can say, so very young in your life. Who do you rely on for advice and mentoring through on some of these questions about how you build a company, how you build a board, how you prepare for regulatory approval, et cetera? We've got phenomenal people that I've had the privilege of hiring in our company. We've got People who are on our board, who have been incredible mentors to me. And it's been an amazing thing, especially in the last couple of weeks, as we've gone through this to benefit from the community in Silicon Valley, who has reached out to us, and said, we've seen this before, how can we help you? And I've learned a lot from Some of the business leaders. Now, one of your business partners, of course, was Walgreens which has publicly said they're stopping expansion to new stores. Of their now switches only in Arizona, right? Well, they haven't said that to us, but we've read that. They have not said that to you? Not to us, no. So, you still expect to build out to Walgreens' stores? Well, we're talking with them, and we were at a point in which we'd completed our rollout in Phoenix, and we're looking at what the next steps in that relationship are. They've been a great partner with us in the context of our work in Phoenix. Do you think given what you know now about your technology and the regulatory challenges and so forth, do you think this company is a nine billion dollar company? Well, I think that's for investors to decide. But so far, no problem? You have all the money you need to get through this tough period? Absolutely. You have no problem with financing? Well, it's a very loaded term. We're definitely not in a position in which we need to raise capital right now. We have very little time here but I want to transition to the conversation that's about to happen because I do know While most of the story over the last year and a half has been about the pinprick technology, that you also have very strong feelings about transparency. About making sure that people can get lab tests directly without having to have it ordered by a doctor. You fought for a change in the law in Arizona. Do you think that's going to spread? Do you think the healthcare system is fundamentally changing in terms of the power that the patient has in the process? I think that the answer to so many of our challenges in healthcare lie in the individual. It's the reason that we have Try to publicly communicate about what it means for individuals to have the right to their own health information or to be able to afford it, I think. If we can give individuals low cost access to health information, I think it changes everything in the context of their ability to engage early. With access to actionable health information and I think that's how we realize a world in which early detection becomes a reality, which can change so much in our health system. I think, too, that we're at an incredible point in time in which technology can be applied. I know what we strive to do in our own work is Make this whole experience of lab testing better and more humane. And that's why we've worked the way that we have. You know, I started this company because I've lost people in my family to cancer and other diseases and I know what that means. And I think that if you engage individuals With that access you can change what we've all experienced there .>> So much more I would like to talk about but this is all the time that we have. Elizabeth thank you very much for being with us .>> Of course, thank you. [ APPLAUSE ]

The CEO sits down with Fortune's Alan Murray to discuss setbacks the company has had concerning its blood tests.