- The blood-testing company Theranos had been around for 12 years before questions started getting raised about its services. The company, however, had a long history of deceptive practices.
- In the Wall Street Journal investigative reporter John Carreyrou’s new book, “Bad Blood: Secrets and Lies in a Silicon Valley Startup,” he describes a demonstration of the technology in 2006 in which recorded blood-testing results were presented as real-time results.
- During a demonstration in Switzerland, he wrote, one of the readers malfunctioned and a fake result was sent over from California.
While Theranos was founded in 2003, questions didn’t take hold about the company until nearly 12 years later when the Wall Street Journal investigative reporter John Carreyrou started poking holes into the company’s claims about its new blood tests.
The tests, which required a much smaller amount of blood than a normal blood test, had been touted as being able to work across hundreds of tests for things as varied as potassium levels or diagnosing herpes.
But as Carreyrou outlines in his new book, “Bad Blood: Secrets and Lies in a Silicon Valley Startup,” trouble was brewing years earlier.
Back in 2006, about three years after the company got off the ground, Theranos’ founder, Elizabeth Holmes, gave a demonstration to the pharmaceutical giant Novartis in Switzerland. The demonstration, by all accounts, was a success. But the Theranos employees who had been on the trip didn’t seem too excited, noticed Theranos’ chief financial officer at the time, Henry Mosley.
That, according to Carreyrou, is because the blood-testing system the team had demonstrated in Switzerland didn’t always work. To mask the problem, the team had recorded results that could be displayed during a demo to investors. Mosley wanted to know whether that happened at the Novartis meeting.
Here’s how Carreyrou recounts it in the book:
“Mosley couldn’t get a straight answer from anyone, but he now suspected some similar sleight of hand. And he was right. One of the two readers Elizabeth took to Switzerland had malfunctioned when they got there. The employees she brought with her had stayed up all night trying to get it to work. To mask the problem during the demo the next morning, Tim Kemp’s team in California had beamed over a fake result.”
After Mosley learned this, he brought it up to Holmes, who Carreyrou said acknowledged there had been an issue but didn’t seem bothered by it. But when he brought up his suspicions during meetings with investors, Holmes’ tone changed, Carreyrou said, and he was fired.
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