Blood Tests Made Simple
Novel process brought its founder a fortune at age 31
She was a Stanford University dropout at age 19 and the youngest self-made female billionaire at 31.
Elizabeth Holmes topped Forbes’s list of America’s Richest Self-Made Women in 2015 with a net worth of $4.5 billion, yet she still lives in a modest two-bedroom apartment in Palo Alto, California. She doesn’t own a TV. She is founder and CEO of Theranos, a health technology and medical services company that has developed novel approaches for blood tests.
Theranos, a combination of the words “therapy” and “diagnose,” uses a small amount of blood from a finger prick for analysis. It can get blood test results faster and less expensively than traditional invasive and costly tests used in many medical practices, it says.
Theranos can be used for more than 100 tests to diagnose and treat a wide spectrum of diseases. It has gained popularity among patients and doctors.
“I decided I would go as a patient and have my blood drawn at Theranos,” said Dr. Darren Phelan in video testimony on the Theranos site. Phelan is one of the many physicians who use Theranos for his patients. “It was a very easy procedure. I met with my technician who walked me through (it) and talked me through how the blood draw procedure was going to go. I got the results the next day.”
Holmes founded the company as a sophomore at Stanford University, when she was studying chemical engineering. She dropped out of school at 19 and used her tuition money to seed her company.
Theranos is valued at $9 billion. Its board of directors includes former Secretaries of State Henry Kissinger and George Shultz, former Defense Secretary Bill Perry, some former U.S. senators and the former commander of the U.S. Joint Forces Command.
Holmes said her passion was to work on early detection and prevention in health care. “Nothing matters more than what people go through when someone they love is found out to be really, really sick, and most of the time … it happens so late in the disease progression process that there is nothing you can do. That feeling of helplessness is heartbreaking, and if I could build something that would change it, that is what I want to do with my life.”
In the fall of 2003, Holmes went to her chemical engineering professor, Channing Robertson, with her idea and a patent application. Robertson stills recall the moment she came to his office and said, “Let’s start a company.”
“I knew she was different,” he told Fortune. “The novelty of how she would view a complex technical problem — it was unique in my experience.”
Holmes, born in Washington, D.C., was inspired by her great-great-grandfather, Christian Holmes, a surgeon, to enter the medical field. She had also lost several “family members and people that I loved too early to disease.”
This January, Holmes returned to her alma mater and was featured in the university’s View from the Top lecture series. Helen Chang, Stanford’s assistant communications director, told LifeZette the series is led by students. “Students select a slate of speakers based on an assessment of interests and suggestions from fellow classmates.”
Chang said Holmes has become popular in the Stanford community. “Reaction (to her talk) was very positive and continues to generate interest,” said Chang.
Holmes continues to pique the interest of people in the business community. She is notoriously secretive, which has garnered some criticism.
“What matters is how well we do in trying to make people’s lives better,” Holmes told CBS. “That’s why I’m doing this.”
Several recent articles in the Wall Street Journal, however, have questioned the accuracy and truth behind Theranos’ claims that it can run 240 tests with blood from a single finger prick. The pieces say Theranos is not using its technology for all the tests it says it is, and that only 15 of its tests are run by its in-house lab machine; the rest are outsourced, the pieces claim, to traditional labs such as LabCorp and Quest Diagnostics. Four former employees were quoted.
Theranos and Elizabeth Holmes have called the allegations “simply wrong.” Holmes said the original article was “false” and “misleading.” This past Thursday, the drug chain Walgreens met with Theranos executives in an attempt to better understand its testing mechanisms before Walgreens opens any new Theranos blood-testing centers. Currently, 41 Walgreens stores in California and Arizona feature Theranos “wellness centers,” according to the Wall Street Journal.
USA Today has also reported that Theranos gave statements and documents refuting the allegations, but that WSJ published the original article without including that information. WSJ has said it stands by its reporting, stating “nothing in Theranos’ report undermines the accuracy of the articles. Our journalism was free of any preconceived notions and was conducted in an entirely appropriate fashion.”
This article has been updated to reflect the latest developments in the Theranos story.