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Healthcare

Walls close in on Theranos CEO Elizabeth Holmes

The drama that has been unfolding over the last few months surrounding Elizabeth Holmes, CEO of blood-testing startup Theranos has finally reached a conclusion, at least for now. US Federal health regulators have banned Holmes from running her lab for two years. In a company statement, Holmes has accepted “full responsibility for the issues” at the laboratory in California.

These “issues” were uncovered by the Wall Street Journal where reporters cast doubt on the credibility of the inner workings of Holmes’ technology. Theranos claimed it could run dozens of tests on a single blood sample. The investigation pointed to the fact that Theranos was using machines brought from other companies to do its tests rather than use its own, and diluting tests into larger samples potentially hindering the reliability of the results.

Since the investigation, it has all been mostly downhill for Holmes who was once revered as the next ‘Steve Jobs’. Many people feel the ban is justice served as they see Holmes as just another over-hyped product of Silicon Valley: all talk and no substance.

So was Theranos just one big scam?

I am not convinced it was. Holmes founded the company in 2003 with an ambitious proposition to revolutionise healthcare by detecting diseases at a much earlier stage with a finger-prick test. It was supposed to simplify medical processes and if it worked - had great potential. But there were a number of things that contributed to the state that Theranos now finds itself in. Investors did not participate in due diligence of the technology. The PR hype that put Holmes on a pedestal, featuring her on a magazine covers, did not help. And it’s a shame, because if proper time and attention was given to perfecting the technology before all of the hype took over – perhaps Theranos would be in a different place right now.

It will take time for Holmes to recover from this, but if her technology is for real – she will bounce back and prove it works. But this whole episode is bound to have ramifications for startups in the healthcare industry as a whole. Health entrepreneurs will be far more prudent when showcasing their technology, but may now be more reluctant or nervous to showcase really innovative ideas. And if they do - they better be sure to back them up. 

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Ayesha Salim

Ayesha Salim is Staff Writer at IDG Connect

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