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posted by janrinok on Thursday October 06 2016, @02:48PM   Printer-friendly [Skip to comment(s)]
from the physician-heal-thyself dept.

Theranos's troubles continue with the layoffs of about half its workforce:

Theranos is closing its labs and wellness centers, CEO Elizabeth Holmes announced today in a post on the company blog. And this isn't a temporary closure: the "approximately" 340 employees running them are out of a job. [...] The company pivoted away from working on its closely held "nanotainer" technology to a "miniLab" in August. The boxy device — unveiled at the American Association for Clinical Chemistry conference — collects small samples of blood and urine and then uploads them to a centralized system for further analysis. And it's a far cry from what the company, once valued at $9 billion, set out to do. According to several experts whom TechCrunch spoke to at the unveiling, it might not be very innovative, either. Although Theranos didn't want its new device referred to as a "lab on a chip," that's essentially what these experts said the miniLab was. And that has been done.

The new device hinges largely on FDA approval — something Holmes said she'd hoped to fast-track under the emergency use authorization (EUA) for Zika detectors. That plan didn't go so well, however. The FDA denied Theranos approval after finding the company failed to use proper patient safety protocols. [...] The news Theranos is shuttering its labs and wellness centers and laying off nearly half its workforce comes after a series of shocking revelations over the past year involving faulty test results and improperly trained workers. The company is now facing numerous lawsuits, was forced to shut down it's California lab facility, lost its main partner Walgreens and was subject to a Congressional inquiry. Finally in July regulators banned Holmes from stepping foot in her own labs.

Previously: Theranos Introduces New Product to Distract from Scandal


Original Submission

Related Stories

Blood Unicorn Fairy Tale: Theranos Founder Charged With Fraud 28 comments

The black turtleneck-wearing founder of Theranos has been accused of swindling investors out of $700 million for blood-testing technology that amounted to smoke and mirrors. However, Elizabeth Holmes will only have to pay a $500,000 fine and surrender millions of worthless shares:

The Blood Unicorn Theranos Was Just a Fairy Tale

[...] Securities and Exchange Commission today brought fraud charges against Holmes, Theranos and its former president, Sunny Balwani, and its complaint alleges pretty strongly that the investors were just as bamboozled as everybody else. In fact, Theranos made direct use of its positive press to raise money: It "sent investors a binder of background materials," which included "articles and profiles about Theranos, including the 2013 and 2014 articles from The Wall Street Journal, Wired, and Fortune that were written after Holmes provided them with interviews" and that included her misleading claims about the state of Theranos's technology. She also repeated those claims to investors directly: "For instance, Holmes and Balwani told one investor that Theranos' proprietary analyzer could process over 1,000 Current Procedural Terminology ('CPT') codes and that Theranos had developed a technological solution for an additional 300 CPT codes," even though "Theranos' analyzers never performed comprehensive testing or processed 1,000 CPT codes in its clinical lab," and in fact never processed more than 12 tests on its TSPU. And Theranos would even do a little pantomime blood-draw demonstration directly on the investors:

This initial meeting was often followed by a purported demonstration of Theranos' proprietary analyzers, the TSPU, and the miniLab. In several instances, potential investors would be taken by Holmes and Balwani to a different room to view Theranos' desktop computer-like analyzers. A phlebotomist would arrive to draw their blood through fingerstick, using a nanotainer, a Theranos-developed collection device. Then the sample was either inserted into the TSPU or taken away for processing. Based on what they saw, potential investors believed that Theranos had tested their blood on either an earlier-generation TSPU or the miniLab. As Holmes knew, or was reckless in not knowing, however, Theranos often actually tested their blood on third-party analyzers, because Theranos could not conduct all of the tests it offered prospective investors on its proprietary analyzers.

Also at The New York Times, TechCrunch, and Time.

Previously: Theranos Introduces New Product to Distract from Scandal
Theranos Lays Off 340, Closes Labs and "Wellness Centers"
Theranos Given Indirect Lifeline From Softbank


Original Submission

Elizabeth Holmes to Face Maximum of 80 Years in Prison when She’s Sentenced in September 47 comments

Holmes to face maximum of 80 years in prison when she’s sentenced in September:

While she is likely to receive prison time for defrauding investors, she will be able to spend the next eight and a half months out on bail. She faces a maximum sentence of 20 years in prison for each of the four counts she was convicted of, though it’s unlikely that she’ll be sentenced to all 80 years.

Holmes has been out on bail since June 2018, when she and alleged co-conspirator Ramesh “Sunny” Balwani were charged. Both were released after posting $500,000 bonds and surrendering their passports. Now that Holmes has been convicted and is awaiting sentencing, her bond will have to be secured by property. Their trials have been repeatedly pushed back, first because of the COVID pandemic and then later because Holmes gave birth.

Part of the reason Holmes’ sentencing has been postponed is because the government still has to prosecute its case against Balwani.

Previously:
2022/01/04 - Elizabeth Holmes Found Guilty on 4 of 11 Charges
2020/09/13 - Judge in Theranos Fraud Case Orders 14-Hour Psychological Test for Holmes
2019/07/01 - Theranos Founder Elizabeth Holmes to Face Trial Next Year on Fraud Charges
2018/09/06 - Theranos to Dissolve in a Pool of Blood
2018/06/17 - Elizabeth Holmes Steps Down as Theranos CEO as DoJ Levels Charges
2018/03/15 - Blood Unicorn Fairy Tale: Theranos Founder Charged With Fraud
2017/12/24 - Theranos Given Indirect Lifeline From Softbank
2016/10/06 - Theranos Lays Off 340, Closes Labs and "Wellness Centers"
2016/08/03 - Theranos Introduces New Product to Distract from Scandal


Original Submission

Theranos to Dissolve in a Pool of Blood 33 comments

Theranos, Blood-Testing Company Plagued By Scandal, Says It Will Dissolve

Theranos — the Silicon Valley blood-testing startup whose former top executives are accused of carrying out a massive, years-long fraud — is shutting down.

David Taylor, who became CEO in June, said Theranos will dissolve after it attempts to pay creditors with its remaining cash. The news was first reported by The Wall Street Journal, which published the letter.

The letter explains that the company "intends to enter into an assignment for the benefit of creditors." This arrangement would allow for all of Theranos' assets, other than its intellectual property, to be assigned to a third party in trust for the company's creditors. The company says it has about $5 million remaining in cash.

Previously: Theranos Introduces New Product to Distract from Scandal
Theranos Lays Off 340, Closes Labs and "Wellness Centers"
Theranos Given Indirect Lifeline From Softbank
Blood Unicorn Fairy Tale: Theranos Founder Charged With Fraud
Elizabeth Holmes Steps Down as Theranos CEO as DoJ Levels Charges


Original Submission

Theranos Given Indirect Lifeline From Softbank 2 comments

Theranos gets $100 million in debt financing to carry it through 2018, with some caveats

Theranos has secured $100 million in debt financing. Yes, someone gave the blood testing company known for handing out questionable test results money.

First reported by Business Insider, the company reportedly told investors it had secured the money from Fortress Investment Group, a New York-based private equity firm that was acquired by Softbank earlier this year.

Of course, this is debt financing, not equity and Theranos will surely need it as it has been bleeding money, laying off more than half its workforce this year and trying to come up with ways to keep it afloat.

Previously: Theranos Introduces New Product to Distract from Scandal
Theranos Lays Off 340, Closes Labs and "Wellness Centers"


Original Submission

Judge in Theranos Fraud Case Orders 14-Hour Psychological Test for Holmes 43 comments

Judge in Theranos fraud case orders 14-hour psychological test for Holmes:

Holmes and Theranos' former president Ramesh "Sunny" Balwani were charged in June 2018 with nine counts of wire fraud and two counts of conspiracy to commit wire fraud.

[...] According to the court document filed this week[*], Holmes—who is now being tried separately from Balwani—notified the court last December that she plans to submit "expert evidence relating to a mental disease or defect or any other mental condition" that has bearing on the issue of guilt. The expert providing such evidence was named in the document as psychologist Mindy Mechanic, of California State University, Fullerton.

According to Mechanic's faculty website, she focuses on "psychosocial consequences of violence, trauma, and victimization with an emphasis on violence against women and other forms of interpersonal violence." The site also notes that Mechanic "frequently provides expert testimony in complex legal cases involving interpersonal violence."

[...] In response to Holmes' plans to provide mental health evidence, federal prosecutors requested that they should also be able to examine Holmes' mental state and provide their own psychiatric evidence in court as a fair rebuttal.

[...] The judge in the case, US District Judge Edward Davila of the Northern District of California, agreed with the prosecutors. As such, he ordered Holmes to undergo up to 14 hours of psychological testing and psychiatric evaluation by two government-appointed doctors over the course of two consecutive days. Davila also ordered that the government's evaluation of Holmes be recorded on video—over Holmes' objections.

[*] Here is a link to the court document.

Theranos Introduces New Product to Distract from Scandal 5 comments

The embattled biotech firm Theranos has introduced a new blood testing product, as its CEO deflected criticism of the company's previous blood tests:

Theranos CEO Elizabeth Holmes made an appearance at a scientific convention today, but it wasn't to allay the many concerns about the company's previous blood tests, the results of which were thrown out earlier this year. Holmes also chose not to address the federal criminal and civil investigations against her company, instead announcing a new Theranos product: a blood-testing kit that could serve as the successor to its controversial Edison machines.

Speaking at the the annual meeting for the American Association for Clinical Chemistry, Holmes said the new machine — called the Theranos Sample Processing Unit, or "miniLab" — was the size of a computer printer, and will be able to run a battery of tests on just 160 microliters of blood taken from a pricked finger. She showed clinical data that detailed 11 tests miniLab can run on blood samples, including one for the Zika virus, but the company says that it can run up to 40 tests. A source told The Wall Street Journal that so many tests could not be run on the same blood, and that patients would need to provide three or four samples.


Original Submission

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  • (Score: 0) by Anonymous Coward on Thursday October 06 2016, @02:58PM

    by Anonymous Coward on Thursday October 06 2016, @02:58PM (#411114)

    The FDA denied Theranos approval [8/31/2016]

    This is probably just a spurious correlation, but I perceive a notable drop in media hype about the Zika virus since then. I wonder if that was orchestrated as part of some last ditch effort to save Theranos.

    • (Score: 2) by bob_super on Thursday October 06 2016, @04:16PM

      by bob_super (1357) on Thursday October 06 2016, @04:16PM (#411135)

      Of course, because the end of the Olympics and the fact Zika only showed up in a tiny corner of Florida afterwards, the start of the school year, fall, and the elections, have absolutely nothing to do with Zika going from bug-spray-selling summer headline to 5-minutes attention span obscurity... It must have been a giant Theranos plot...

      • (Score: 0) by Anonymous Coward on Thursday October 06 2016, @04:25PM

        by Anonymous Coward on Thursday October 06 2016, @04:25PM (#411140)

        Miami becoming the Zika hot zone happened fairly recently. But now "winter" is coming (yet another factor).

      • (Score: 2) by Aighearach on Thursday October 06 2016, @06:21PM

        by Aighearach (2621) on Thursday October 06 2016, @06:21PM (#411191)

        The prediction would be that a bunch of small-headed babies would follow the olympics. It is too soon to know if that will result or not. Most people who are infected do not need hospitalization and may not be tabulated.

      • (Score: 2) by butthurt on Friday October 07 2016, @12:44AM

        by butthurt (6141) on Friday October 07 2016, @12:44AM (#411276) Journal

        Let's disregard Puerto Rico, because it's merely a U.S. territory, not an actual state.

        Pregnant Women with Any Lab Evidence of Zika Virus Infection*

                US States and DC: 837
                US Territories: 1,638
        [...]

        Zika Virus Disease Cases Reported to ArboNET*

                US States and DC: 3,818
                US Territories: 24,201

        -- http://www.cdc.gov/zika/index.html [cdc.gov]

    • (Score: 0) by Anonymous Coward on Thursday October 06 2016, @04:16PM

      by Anonymous Coward on Thursday October 06 2016, @04:16PM (#411136)

      </tinfoil hat>

    • (Score: 1, Insightful) by Anonymous Coward on Thursday October 06 2016, @04:30PM

      by Anonymous Coward on Thursday October 06 2016, @04:30PM (#411143)

      > This is probably just a spurious correlation

      Yes it is.
      Thats kind of like starting a sentence of with , "I'm not a racist, but ..."

  • (Score: 4, Touché) by SecurityGuy on Thursday October 06 2016, @03:34PM

    by SecurityGuy (1453) on Thursday October 06 2016, @03:34PM (#411128)

    And this is from the company whose CEO famously advocated not having a backup plan.

  • (Score: 3, Funny) by Anonymous Coward on Thursday October 06 2016, @03:35PM

    by Anonymous Coward on Thursday October 06 2016, @03:35PM (#411129)

    On the bright side, think of the approximately 340 Aeron chairs to be auctioned off.

    • (Score: 0) by Anonymous Coward on Thursday October 06 2016, @04:27PM

      by Anonymous Coward on Thursday October 06 2016, @04:27PM (#411142)

      I need a new one. I got my last aeron from the enron auction and its pretty raggedy now.

      • (Score: 2, Interesting) by Anonymous Coward on Thursday October 06 2016, @07:28PM

        by Anonymous Coward on Thursday October 06 2016, @07:28PM (#411216)

        I remember an article back in the late days of the DotCom craze where someone had come with with an "Aeron Ratio" to predict how fast a startup would fail based on how many of those chairs that they had in their office.

  • (Score: -1, Troll) by Anonymous Coward on Thursday October 06 2016, @05:11PM

    by Anonymous Coward on Thursday October 06 2016, @05:11PM (#411157)

    SN shud expand its cyberbegging initiative to start a "feed-teh-trolls" campaign as all 340 ployees laid off from Theranos come here to shitpost yesh.

  • (Score: 2) by stormwyrm on Friday October 07 2016, @03:21AM

    by stormwyrm (717) on Friday October 07 2016, @03:21AM (#411320) Journal
    The summary, I think should have explained a bit about what Theranos is. Looking about I found out that it's a health technology company that developed devices that were supposed to be able to conduct blood tests using far smaller quantities of blood than are typically required. Seems though that these devices never worked as well as the company claimed, and now the company is in trouble from government regulators and faces a class action suit as well for misrepresentation of their medical tests.
    --
    Numquam ponenda est pluralitas sine necessitate.
    • (Score: 0) by Anonymous Coward on Friday October 07 2016, @11:59PM

      by Anonymous Coward on Friday October 07 2016, @11:59PM (#411647)

      Sometimes the links to previous stories are worth following.

      • (Score: 0) by Anonymous Coward on Saturday October 08 2016, @09:18AM

        by Anonymous Coward on Saturday October 08 2016, @09:18AM (#411720)
        I'd have written the first sentence of the TFS as follows: "The troubles of embattled biotech firm Theranos continue with the layoffs of about half hits workforce." Something simple like that would have given the necessary initial context.