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the board couldn't even reach a quorum without her. ... the board tried to fire her, the early board. And she talked her way out of it.
it was a partnership of equals. They were running this fraud together. And ultimately she always had the last say.
the Siemens machines had been hacked.
to convince investors that they really did have groundbreaking new technology, they would stage these demos with not just investors but board members, even media members where they would have the mini lab prototype. They would prick the visiting VIP's finger. They would put the blood in cartridge slot slot the cartridge into the mini lab. Turn it on, you know, it start whirring and then they would say, 'Oh, it's going to take a little while. Why don't you come and either visit the lab or go talk
the third generation of the technology was called the mini lab. And that was supposed to be a box that did it was a bigger box and it was supposed to do more than just one class of blood test. When they went live with the blood tests in Walgreens stores in the fall of 2013, the mini lab was a prototype that didn't work at all.
the Edison refers to the second generation of the technology which was just an immuno assay machine so it could only do one class of blood tests and it it didn't do them reliably.
Theranos would get potassium test results for patients that were so high that they only made sense if the patients had been dead.
They were lucky that the the part their partnership with Theranos fell apart before Theranos ever went live with its tests in Safeway stores.
I spoke to this um woman who who was a high-ranking executive at at Safeway and who who came to have suspicions about um the the accuracy of the Theranos technology
if you heard her at the height of her fame in her various interviews she likened you know, getting a blood draw with the the hypodermic needle to a medieval torture mechanism. Which is ridiculous.
There have been a lot of researchers for the past 20 years in academia and industry who have been trying to crack that nut. Um namely running a bunch of tests on just a tiny sample of blood.
this gives you an idea of the lengths to which to which Elizabeth Holmes and Theranos went to to try to to suppress my reporting.
Tyler had been introduced to Elizabeth at his grandfather's house and had gone to work there for a summer as an intern and then upon graduating the next year in the fall of 2013 had gone to work there full time and had spent eight months at the company and become convinced that the company was built on a series of lies and was essentially a fraud.
I find their behavior reprehensible... They would use any means necessary to try to get the story killed.
I don't think he realized the shenanigans that were going on in the lab. I don't think he realized that fewer than 12 of the tests were being done with Theranos technology.
how many of the blood tests on the menu how many of the 250 tests are done with actual Theranos technology and how many are done with commercial machines that you've hacked.
she then used it to to claim that that's why he was fired and to deny him stock options.
he confronted her... said to her, 'Elizabeth, we can't do this anymore. You know, it's it's crossing a line.' ... she turned ice cold and said... 'you're not a team player and I think you should leave right now.'
one of the ways that they hacked the machine and adapted it to small samples was to dilute the blood in a saline solution uh to create more volume because of course these commercial machines were used to handling regular sized blood samples. Right. So a lot more volume. And so to create more volume to make the machine work, they diluted it and when you dilute the blood, that creates problems. There's already a dilution step in the Siemens machine's protocol. Right. So now diluting dilution. You'
Theranos uh had a device named the Edison that actually handled only a a small fraction of the 250 blood tests on its menu and that uh 200 about 240 of the 250 tests were done with just regular commercial machines bought from third-party manufacturers with one twist, which was that a lot of those other 240 tests were done on on a one particular Siemens machine that Theranos had hacked to uphold the myth that it could test tiny samples of blood
that her allegation uh was that the the son of Richard Fuisz had stolen her provisional patents, funneled them to his father, and that he had then used that information to file his own patent which, after a lot of reporting and looking at the legal record, I found to be completely untrue and fabricated.
I thought immediately there's something off about this and and the main thing I thought was off was this notion that this 19-year-old college dropout, you know, had left Stanford with just a semester or two of chemical engineering under her belt and gone on to to pioneer and to develop groundbreaking new medical science. Um I I didn't think that was possible.
It only none has happened here. None of that's happened.
I have heard them say um several times since my first October story that they were going to release data that they were going to do peerreview studies and publish them in medical journals and it's been several months now that Elizabeth Palms has asserted that she would do this and uh nothing has happened.
you didn't have the savvy medical investors from the valley and elsewhere and you didn't have a board with really any much of any medical experience and especially not any diagnostics or laboratory science uh experience
if the chief scientist says nothing is working to their spouse and the spouse tells that to a journalist, this to me it just feels like that is the beginning and the end of the story
Tim Draper... said explicitly like I think the journalists are just upset that they miss this company and that it's... he believes that they're going to show everybody in the world how amazing they are.
the VC firms and the investment firms that specialize in this kind of investing were not present among the investors at this company
the board of directors was made up of non-technically savvy people
investors were not allowed to look at the technology
the company authorized a C3 round... series 3 round of shares... 3 days before our story was published in October that... would have valued the company at between 10 and 11 billion. ... it's unclear really whether the last funding round was the round in 2014 or if it was a round that occurred 3 days before our story was published in October.
the last valuation... nine billion... the last round that we know of for sure... started in February 2014 and the share value per share was $17 and that valued the company at approximately $9 billion.
I think it's fair to say that that she doesn't see her husband's suicide and his work for the company as unrelated. ... did I find her a credible source? Absolutely.
She told me that he had told her on numerous occasions before his death that things were not working. Nothing is working was her quote.
I believe, you know, it's all pointing towards an eventual end similar to those companies.
I would say that within 3 weeks, 3 to four weeks, I became convinced that this was a story.
if you're a partner of the company he's representing and you're bound by a contract and you're considering, uh, ending it, then, uh, you know, uh, the fact that he's their lawyer is not to be trifled with.
the reason they've been careful until now is one that that that contract uh was not ideally negotiated by someone who no longer works for them and the the other is that they know that uh if they don't get their legal ducks in a row they're facing David Boy on the other side.
we're also hearing that um even given that now that that you know the the these government findings are out and that they're uh very serious and grave that Walgreens is is absolutely reconsidering the whole thing.
that contract was is not uh favorable to Walgreens and uh put uh the company at a disadvantage in in many ways and makes it very difficult for Walgreens to get out of that contract.
when I tried to ask for uh an interview the first time uh in April of last year, I was uh more or less ignored. And then I continued to ask repeatedly... they just continued to decline. And it became surreal because... the intensity of her public appearances if anything picked up... she was just not willing to talk to the Wall Street Journal and to to face up to and and answer some of the questions that I was asking.
a very aggressive stance that the uh the company took toward us and toward sources and toward the the whole notion that the Wall Street Journal was going to write about them.
a story like this uh which was a complex story with a you know, a company that isn't uh very open uh by its nature is a difficult story to to do and to pull off in the first place.