Case Study (1)
- Theranos: Unveiling the Realities of a Failed Healthcare Startup .
Name :- Mahmoud Mohamed MashaL
ID:- 202201119
Project Guide :- Instructor: Dr:-Ashraf Badawi
TA: Eng- Mohamed Ahmed
Eng- Ragda Gowaily
Introduction:-
Beginning in the early 2010s, Elizabeth Holmes, a youthful businesswoman, and her organization Theranos
became a global sensation. According to the biotech startup's assertion that it had created a revolutionary
device, a single drop of blood could be used to conduct hundreds of medical tests. Large-scale investments in
Theranos came from some of the most well-known figures in Silicon Valley, and the company even put
Holmes on the cover of Forbes. Theranos' technology proved to be too excellent to be true over time, though,
and as a result, the business fell apart quickly and dramatically. What went awry with Theranos will be
examined in more detail in this piece.
The Rise of Theranos:-
Elizabeth Holmes, who left Stanford at 19 to follow her dream of revolutionizing the medical field,
established Theranos in 2003. The company's goal was to create a system that would replace
conventional, invasive blood tests by allowing a variety of medical tests to be performed using just
a tiny blood sample. Theranos claimed that its Edison technology, which could perform up to 240
various tests from a single drop of blood, was quicker, less expensive, and more practical than
conventional testing procedures. High-profile financiers like Larry Ellison, Rupert Murdoch, and
Betsy DeVos soon took notice of Theranos and invested. The business had agreements with
Safeway and Walgreens to provide testing services in their stores by 2014, when its market
valuation was $9 billion.
The Fall of Theranos:-
-The technology of Theranos was never verified or authorized by governing bodies like the FDA, despite the
company's hype and promises. In reality, Theranos' technology was shown to need to be more accurate and
reliable in internal papers and whistleblower accounts. Employees stated that most of the company's tests
were conducted using commercially available testing tools, with only a small number of tests utilizing the
company's proprietary technology.
-The Wall Street Journal's 2015 publication of a series of stories detailing the company's dubious business
practices and lack of openness dealt Theranos its first significant setback. According to the reports,
Theranos only occasionally used its proprietary technology and instead used conventional blood testing
techniques for most of its studies. Theranos' technology had significant accuracy problems, according to the
stories, and some tests produced widely disparate findings.
-Regulatory authorities started looking into Theranos due to the Wall Street Journal's story, and
the company's alliances with Safeway and Walgreens broke up. The SEC and the Department of
Justice ultimately filed fraud charges against Holmes, who was then made to resign as CEO of
Theranos. In 2018, the business eventually declared insolvency.
Lesson Learned:-
The Theranos story could become the poster child of the obsession of technophiles who don't know what
they are talking about with "disrupting" healthcare, and the greed and hunger for buzz that fuels this. Stop
trying to disrupt my healthcare folks, this is not a sandbox.
Seriously though, it is yet another example of what happens when a lot of excitement arises about something
that is alleged to be industry-changing without first passing the scrutiny of science; that is: open, peer-
reviewed testing and validation, the gold standard if you want to introduce anything that will be used in
patient care, and actually the scientific backbone that should stand behind any claim.
The story usually goes like this:
1-A semi-informed technophile who is tangentially interested in healthcare but has no (completed) formal
education in the field has an innovative idea that at first sounds great, even revolutionary, and most
importantly: buzz worthy.
2-The idea gets picked up by media, and completely overblown by grandiose claims, catalyzed by masses of
semi-informed technophiles who are tangentially interested in healthcare but have no formal education in
the field. These "early adopters" of these stories eat it up and regurgitate it with even more superlatives.
3-Soon enough, the investors who are tangentially interested in healthcare but have no formal education in
the field come in, hoping to make big bucks. Reading story after story about how awesome and
revolutionary this story is, in increasingly trustworthy sources, they take this at face value.
4-In a game that involves politics and power, the investors pull in an armada of important and recognizable
faces who are tangentially interested in healthcare but have no formal education in the field into the
startup's board of trustees.
5-Every step of the way, some of the people closely involved will undoubtedly have thought about the
possibility that the whole thing might just be not that revolutionary. Perhaps some of the claims are even
just plain baloney. But nobody wants to be that guy. Besides, they're not the expert, right? But who in that
board room actually is?
Conclusion:-
In conclusion, the rise and fall of Theranos serve as a cautionary tale for the biotech industry and
the business world at large. It highlights the dangers of hype and the importance of transparency,
ethical responsibility, and regulatory oversight. It also underscores the need for diverse
perspectives in leadership and the importance of cultivating a culture of accountability and
integrity in startups.
Refrances:-
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[Link]
2017/04/18/theranos-arizona-attorney-general-reach-agreement-full-
restitution-state-consumers/
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on-innovation-partnership-/?#sp=show-clips
