Theranos CEO says company's underlying technology is sound

Reuters News
Posted: Oct 21, 2015 12:16 PM

By Julia Love

(Reuters) - Theranos Chief Executive Elizabeth Holmes fought back on Wednesday against accusations that the technology at the heart of the blood-testing startup has grave flaws.

Holmes delivered her defense of her company at a technology conference hosted in Laguna Beach by the Wall Street Journal, which last week published a pair of stories suggesting her startup was relying on technology from traditional labs as it struggled with its own technology.

But Holmes said the company has moved away from one of its devices only briefly as it transitions to getting approval from the Food and Drug Administration for all of its tests. She cited her successful lobbying for a law in Arizona that allows patients to get blood tests without a doctor’s order.

“I personally in Arizona worked very hard to change the law,” she said. “I can’t do that without knowing that the tests that are offered are of the highest quality.”

Theranos, which has a valuation of $9 billion, promised to shake up medical testing by conducting a wide range of tests with just one drop of blood from a finger stick, rather than the large vial typically collected from a patient’s arm.

But the Wall Street Journal has reported that the company now uses the tiny vials, known as nanotainers, for just one of its tests, responding to concerns from regulators. The newspaper also reported that former employees have serious doubts about the reliability of Edison, the company's proprietary lab tool. While it is used for just a fraction of tests, it is key to Theranos’s strategy.

Holmes acknowledged that the company has used technology from other labs for tests from venous draws but stressed that the company uses only its own technology for finger-stick tests. She noted that the company has received FDA approval for one of its tests and expects to get clearance for others.

“We are the exact same company that we were,” she said. “We’ve done 3.5 million tests. We have tens of thousands of people who have rated our service.”

Holmes, 31, is a darling of Silicon Valley, drawing comparisons to the late Apple founder Steve Jobs for her bold vision and penchant for wearing black turtlenecks. Her company has won the backing of investors including Oracle Corp. cofounder Larry Ellison and venture-capital firm Draper Fisher Jurvetson. Political luminaries such as former secretary of state Henry Kissinger sit on the company's board.

(Reporting by Julia Love; Editing by Chizu Nomiyama and David Gregorio)