A drop of blood was all that Theranos founder Elizabeth Holmes needed to change the world. Or so she made the world believe.
The Silicon Valley star was a 19-year-old Stanford University dropout in 2003 when she founded Theranos. The biotech startup promised a revolutionary blood analyser that could run hundreds of tests with the prick of a finger in the comfort of one’s home. In the current scenario, it would indeed have been a relief for millions. But what went wrong in the journey of this tech giant?
The CEO Elizabeth Holmes—once named richest woman in America by Forbes—was found guilty on Monday on three charges of wire frauds and one conspiracy to commit wire fraud. After about 45 hours of deliberation, the jury of the federal court in San Jose, California found her guilty of defrauding investors, earning her up to 20 years in prison.
Now 37, Holmes is accused of swindling private investors between 2010 and 2015, with a fraudulent promise to revolutionise the lab-testing industry.
Here is the journey to her downfall:
March 2004: Starting Theranos
Elizabeth Holmes, a chemical engineering sophomore at Stanford University, drops out of college to pursue her startup Theranos, a portmanteau of “therapy” and “diagnosis”. The company raised $6.9 million as funding.
September 2009: Ramesh 'Sunny' Balwani joins
Balwani joins as the Chief Operating Officer and President of Theranos. He is a Pakistani-born businessman, who met Holmes in China. The two of them were later revealed to be in a relationship.
September 2013: Theranos-Walgreens partnership
Following the company’s coming to the limelight in 2013, after years of keeping a low profile, Holmes announces the long-term partnership with Walgreens. Thus, the first Theranos Wellness Center opens in Walgreens, Palo Alto, where it can reach the consumers directly.
September 2014: Forbes name her one of America’s richest women
The New Yorker and Forbes among other magazines feature Holmes and her brainchild. Fortune announces her as a billionaire, holding 50 per cent of the company shares which has at the time a value of over $9 billion.
The same year, The New Yorker reports the startup has raised $400 million.
July 2015: FDA approves Theranos
The Federal Drug Administration approves Theranos test for detecting the herpes simplex 1 virus. Vice President Joe Biden visits the Theranos facility calling it “inspirational”.
October 2015: Report against Theranos
The Wall Street Journal publishes John Carreyrou’s report that the company runs only a few tests on its equipment, while most of them are carried out with traditional machines, with more than a drop of blood. The article also interviews ex-employees who claim that the technology is exaggerated.
The FDA releases a report regarding its investigation of the Theranos equipment, calling it an “uncleared medical device”.
The company changes its board of directors, removing Henry Kissinger and George Shultz, besides forming a distinct medical board.
January 2016: CMS bans test, Walgreens suspends partnership
The Centers for Medicare and Medicaid Services (CMS) sends a letter to Theranos quoting its finding that its California lab does not follow the federal standards. The CMS also bans Holmes from running blood tests for two years. Following the report, Walgreens announces it will stop all tests at the Theranos Centre in Palo Alto and Newark.
Later in the year, the net worth of Holmes was revised to $0. While the company unveils a new ‘miniLab’ device, Theranos investors Partner Fund Management and Walgreens sue the company.
March 2018: Holmes charged with fraud
The US Securities and Exchange Commission charges both Holmes and Ramesh Balwani for raising more than $700 million from years-long fraud from investors. Holmes is forced to give up control of the company.
September 2018: Theranos is shut down
Theranos is forced to close, unable to find a buyer. Reports said that over 80 potential buyers were uninterested in the company. The company emails the investors regarding its closing.
August 2021: Trial begins
A 12-member jury in the San Jose courtroom commences trial of Holmes and the company. It is deemed as one of the worst disasters in the history of Silicon Valley.
