Australasian Science: Australia's authority on science since 1938

The Wild West of Biotech Innovation

By Ainsley Newson & Wendy Lipworth

The failure of a US$9 billion health technology start-up provides a stark example of how venture capitalists can let market potential overrule evidence of efficacy.

The full text of this article can be purchased from Informit.

Recently, we avidly listened to a podcast from ABC Radio America called The Dropout. This five-part series followed the rise and fall of Theranos, a Silicon Valley health start-up that folded in 2018.

Theranos (a combination of “therapy” and “diagnosis”) was founded in 2003 by Stanford University drop-out Elizabeth Holmes. She had been inspired by the possibility that micro­fluidics technology could lead to “near-patient” blood testing conducted in pharmacies, supermarkets or even a patient’s home.

This would not only be convenient, but would also herald the end of traumatic blood tests. A fingerprick sample would be all that was needed to run hundreds of tests. Patients would benefit from early detection and prevention. Holmes and the company she built aimed to do this via a proprietary device called the Edison.

Having secured significant investment over many funding rounds, the company was at one point valued at US$9 billion. It had a stellar Board, but no members had a medical background.

Theranos generated significant media attention, but a series of whistle-blowers and the work of the Wall Street Journal’s John Carreyrou revealed a darker side of Theranos and its technology.

Ultimately, it seems that Theranos’ technology could not live up to the hype. The Edison device and its successor appeared to generate erroneous results....

The full text of this article can be purchased from Informit.