Almost a year after The Wall Street Journal published an investigation that questioned the accuracy of Theranos’ blood test, the company has decided to stop all of its clinical operations, cutting 340 positions and closing its Wellness Centres where blood tests were performed.
Instead, Theranos has decided to make a major shift, focusing solely on its technology, namely the miniLab platform it debuted in August at a scientific conference. At the time, the product reveal didn’t go over too well, since those in attendance were hoping for large amounts of independently reviewed data that validated the company’s blood test results.
Now, the product reveal makes a lot more sense.
Theranos, up until Wednesday, was trying to own all the parts of the blood-testing industry: building the technology, as well as administering the tests to patients. The company’s business model was based on offering more than 100 simple blood tests directly to patients at a much lower cost than traditional blood labs, in addition to developing its own technology to test that blood, which Holmes had emphasised would only need to be drawn in very small amounts.
In the past year, however, Theranos’ aspirations to be a one-stop-shop have led to the company having to void two years and tens of thousands of tests. The government agency that regulates clinical labs found that Theranos’ northern California lab posed “immediate jeopardy to patient health and safety.”
John Carreyrou, the reporter at The Wall Street Journal whose reporting led to more scrutiny on the company, tweeted in response to the news that Theranos was closing its lab operations to focus on its technology:
What happens next
With the pivot to focus just on technology, Theranos is in a lot of ways taking a step back to the research and development stage.
“Our ultimate goal is to commercialize miniaturized, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, pediatrics, and intensive care,” Theranos CEO Elizabeth Holmes said in an open letter Wednesday.
Simply, the idea is to put the miniLab machine (that only needs a small amount of blood) in places that might not have the best access to send out blood samples to a full clinical lab operation. Theranos will own just a piece of the blood-testing puzzle — the company won’t be the ones drawing the blood samples, just providing the technology that can analyse and make sense of it.
Theranos’ goals will now be to get the technology approved through all the regulatory channels, to find ways to commercialize the technology, and to publish data in scientific journals that will validate it, Holmes explained in the letter. Getting out of the game of dealing directly with patients should help remove some of the problems that have stymied the company in the last year.
Dr. Eleftherios P. Diamandis, the head of clinical biochemistry at Mount Sinai Hospital in Toronto, and someone who has written critiques of Theranos in the past, told Business Insider he is still sceptical that this will pan out well.
“It seems to me too that their new model (making machines) will be very troublesome but we will see,” he said in an email.
Theranos declined to comment beyond the open letter that announced the pivot.