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Regulators Propose Banning Theranos Founder from Blood Testing

wsj.com

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Re: Regulators Propose Banning Theranos Founder from Blood Testing

#51

Post by entee »

dwolfson wrote: post #3

How did a company like Theranos get so "far" with all signs early and present pointing to deep, fundamental problems? I refuse to believe investors simply failed to perform due diligence.

I heard from a friend who is fairly prominent in the microfluidics space (doing lab work with much smaller amounts of material than ordinarily required) that initially it was a drug delivery company. Delivering compounds in a reliable time released way is challenging and valuable, and I think their initial foray was in that direction. Apparently it didn't work well early on and they pivoted in this direction, so maybe the VCs were not expert in the space post pivot.

More likely I think they were also enamored with what looked like promising results. I've personally seen situations where technical due diligence on lab tech was poorly done and therefore wrong. Unless the VC has a fairly strong science background/scientific advisors in a related sector, it's super easy to make something look like it's working when it's actually totally busted.

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#53

Post by daveguy »

Note the letter, dated March 18th gave Theranos 10 days to respond (April 1st). According to the company they responded within the timeframe and have not received any sanctions yet.

Rumor is the response was short and read: "Bring it, Feds! We have Kissinger! ... KISSINGER!!!"

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#54

Post by jonwachob91 »

entee wrote: post #38
JoaquimBean wrote: post #12

Funny to see tech VCs try to get into the medical space with no knowledge or expertise in the subject. Expect more of this as clueless GPs try to cash in on personalized medicine trend and shady founders give them every opportunity to hop aboard. There are already professional VCs who do this shit all day everyday, they just hang out in Kendall Square and RT. 128 not SF.

There are plenty of Biotech VCs in the bay area. The one I know best is Third Rock Ventures, but there are others. The timelines for success are extraordinarily long so it's not quite as splashy a space. It's almost impossible to "fail fast" with a "MVP" in the biotech space, so you have to put in tons of capital for a long time. That said personalized medicine should end up being interesting, but I think it's really…

Bull Shit. Biotech companies produce more MVP's then any other sector. Just because we don't need to test if the business will work (as much as say a facebook) we do need to test the science. My startup is working on infection resistant materials for around hospitals. Infections are a problem, if we solve it we will have customers, how many and at what cost is the question. But because science is the question, and it's relatively easy to test compared to a business model, we run lots of MVP tests. By the time we seek our first outside investment at the end of summer my team will have built and tested over 1,000 MVPs testing different nanotexture geometries and bacteria. 1,000 MVPs before our angel round, 1,000 opportunities to fail fast. That's not something you'll EVER see in an IT startup.

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#55

Post by blakeyrat »

pfarnsworth wrote: post #36
cylinder wrote: post #23

Uber skirts city/state regs; you can't mess with the FDA, among other federal agencies (such as FAA).

I guess you prefer the old way where taxi cabs had a virtual monopoly, and it was expensive as hell. Uber did the right thing by disrupting this market. Theranos potentially could have been amazing for medicine, but more and more this looks like an epic disaster.

Unless you want a taxi cab with wheelchair access; Uber utterly fails that market.

The traditional cab companies (who have to cover that market by law) are quite right in crying foul, IMO.

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#56

Post by entee »

rzt wrote: post #49
entee wrote: post #45

Earlier quoted context omitted.

I'm a little confused, does the military acquire companies wholesale? I've never heard of that happening, that's not to say it can't but what are some examples of this kind of scheme? Instead was the plan to milk the military for a long time on R&D expenses and just pocket the cash as one goes along? If so how does that work for the VC-backed structure of the company?

I have no expertise in any of this, but I was assuming it would be something along the lines of an IDIQ (indefinite delivery, indefinite quantity) contract vehicle: https://en.wikipedia.org/wiki/IDIQ

That makes some sense, though it seems they'd have to deliver something in that case. I'm sure one could keep the charade going for a little bit by delaying/delivering stuff that didn't work, but eventually the docs in the army medical corp would start to raise red flags and the jig would be up. One hopes anyway?

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#57

Post by drcode »

searine wrote: post #35
drcode wrote: post #8

Medical research is in great need of a major shakeup, because I feel like current research models have seriously underperformed in recent years... ...but now that isn't going to happen, primarily because of this debacle. It's so sad that the "keystone cops" at Theranos have done so much damage to the reputation of the medical startup community- Possibly, they've set medical research back by several years with their b…

>I feel like current research models have seriously underperformed in recent years... The research models have performed as they always have, if not better. The only thing that's changed is the introduction of know-it-all Silicon Valley VCs who think bio is the same as software.

> The research models have performed as they always have, if not better.

I'm not an expert on the history of progress in medical research... however, I do have a medical degree.

Bottom line, I have higher standards and think we could be doing a lot better. Regardless, without counterfactual data it's really a very subjective question.

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#58

Post by plainOldText »

It's sad to hear Theranos still has issues, but I think people should give them credit for showing the world the lab experience can be quick, simple and painless; not to mention the fact that they actually publish their prices online, which other labs do not do. You can also order and view all your results on the phone app, which is also nice.

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#59

Post by enraged_camel »

electic wrote: post #47

I wonder how much Quest and LabCorp have lobbied to get Theranos under the microscope. Almost all labs have findings including FDA labs that need be to corrected. I just find it odd that WSJ seems to get access to government documents, internal information, and competitor benchmarks over and over again. Theranos faults aside, something does not smell right here.

It is entirely possible they lobbied, but in this case it seems warranted. Theranos seems really shady and the leadership seems to be grossly unqualified.

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#60

Post by return0 »

Why haven't we heard anything from the VCs or , for that matter from anyone except WSJ ? If this letter is true, this is completely gross, how can a startup which is being punished for fraud still enjoy high valuations and, apparently the tolerance (if not support) of the silicon valley ?
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