Elizabeth Holmes is founder and chief executive of Theranos, a blood testing company accused of using bogus cancer tests to reel in customers, with thousands of refunds and court orders by various state and federal agencies. Theranos offered customers so-called lab tests which performed all the same tests on a home blood-testing kit that cost the same.
Now the company is facing a slew of lawsuits. Here is what we know so far:
Who is Elizabeth Holmes?
The 35-year-old is a former Stanford dropout who founded Theranos in 2003. Ms. Holmes, who had received a computer science degree from the university, co-founded the company with her brother, John, when they were both in their early 20s.
In 2004, Theranos was valued at $9 billion. Through grants and grants from venture capital firms, the company moved into their headquarters, a fortified 11-story building overlooking San Francisco’s Embarcadero and metered-lane parking in the Mission District.
Eventually, Theranos used highly specialized supercomputer algorithms to run its own blood tests, which offered a much lower result for less cost. Customers were so enamored of the company’s efficiency that they started lining up to take the new tests. In January 2009, Theranos catered its first meal for customers.
But then the reality set in — Theranos may have fallen victim to the problem often associated with razor-backed executives: that they overstate their abilities. Perhaps most alarmingly, the company’s original founder admitted to lying about her own scientific qualifications.
That said, Theranos did have the grand advantage of being able to test hundreds of thousands of blood samples on demand for just $50. That was a real advantage in an age where blood work was often sent to an expensive facility. It also had yet to face the ferocious scrutiny Theranos would face as it launched tests in more and more locations.
Why did the FDA stop Theranos?
The company was considered too good to be true. In 2015, the Food and Drug Administration ordered the company to stop testing. The regulator accused the company of false advertising, failure to warn customers of potential risk of harm to themselves and the community, and lacking an appropriate safety plan. In November 2016, the California Department of Public Health shut down a Theranos lab and slapped a large fine. The following month, the FTC shut down the company’s company and launched an investigation.
Has the company rebounded?
To this day, Theranos remains on probation with the FDA. In August, it said it was looking to sell its remaining private lab. In December 2018, The Wall Street Journal reported that Theranos was reaching out to individuals with medical backgrounds to help with its operations.
Read the full story at The New York Times.
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