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Is the latest blood-testing tech too good to be true?


Theranos

writer icon Joachim Avoja     Theranos   |   Business & Investment     🕐 17. May. 2018


Genalyte offers the technology to run several blood tests while requiring only a very small amount of blood. On top of that, they provide the results from the tests within minutes.  This is very similar to the service provided by the now infamous company Theranos Inc. While Theranos had an unhappy ending, can Genalyte succeed where Theranos failed? 


Theranos
Theranos was founded in 2003 by Elizabeth Holmes. She wanted to develop a lab-on-a-chip technology for blood tests. The idea was to make testing cheaper, more convenient, and easily accessible to patients. Due to the small amount of blood needed for the tests, patients might be more inclined to actually take them. The idea was that you would only need a finger-prick amount of blood, and that would be enough to carry out several tests.


A fear of needles

Holmes' basis for developing this technology was her fear of needles. She said in an interview with Wired back in 2014  “...a substantive percentage of patients who get a lab requisition don’t follow through, because they’re scared of needles or they’re afraid of worrying, waiting to hear that something is wrong."


Holmes believed that too many tests in the United States were being performed in the emergency room. She wanted to develop a technology that would make it easier to do tests before a patient is brought in.  “…you’d have time to intervene before a patient needed to go to the hospital. If you remove the biggest barriers to these tests, you’ll see them used in smarter ways.” 


In its first year, Theranos raised millions of dollars. By 2010 they were estimated to be valued at around $1 billion. By 2014 that value had increased to $9 billion


Genalyte
Genalyte claims that they can run up to 128 different tests on a single drop of blood, and provide test results within 15 minutes. Founded back in 2007, they have been maintaining a low profile in San Diego, California while trying to raise money. Since then they have managed to raise $92 million in funding for their Maverick Detection System, which took about ten years to build. The funding comes from Redmile Group and Koshla Ventures. 


“Anytime two molecules bind, we can see that happen. So, the technology is capable of almost an infinite number of tests.”
 Said CEO and founder Cary Gunn in an interview with MedCity News back in 2016.

A portable blood test

At the JP Morgan Healthcare Conference in January 2018, Genalyte unveiled the Merlin 1.0, a tool that can be used by physicians to do these blood tests. The Merlin is designed as a portable trolley that can sit in the corner of a doctor’s surgery and do blood tests that are normally sent to laboratories.

“It’s basically a laboratory on a cart,”
said Gunn in an interview with Financial Times. “We’re not reinventing the wheel. We co-package our technology with what’s already available — and then that gets you enough diagnostic test results to help a physician make a decision.”

Theranos vs. Genalyte

The difference between Theranos and Genalyte is that the former tried to do all the tests on their own platform, while the latter's technology, Merlin, consists of three different machines. Two of these, .a blood cell counter and a chemistry analyser, can be bought separately and are already widely used. Aside from these, Genalyte adds a device that can perform rapid protein tests. These tests would usually be performed and analysed in a laboratory, a more time-consuming process. 


FDA-problems
On October 27th, 2015, Business Insider published FDA-documents that said that the containers Theranos use for blood collection were “not validated under actual or simulated use conditions” and “were not reviewed and not approved by designated individual(s) prior to issuance”.

On December 2nd, 2015, the Washington Post published an article in which they claimed, they had obtained an email correspondence. The correspondence was said to reveal that an official for the Department of Defence had sounded the alarm on Theranos back in 2012. A formal inquiry was launched with the Food and Drug Administration into how Theranos intended to distribute tests without FDA clearance. The Washington Post claimed that Holmes had asked a highly ranked military contact to quiet those, in her words, inaccurate concerns.

Downfall
The real problems for Theranos began in October of 2015. Journalist John Carreyrou of The Wall Street Journal reported that they themselves were using more traditional blood testing machines from companies such as Siemens because tests on the Theranos Edison-machines proved to be inaccurate. 


Theranos released a statement the same month denying the allegations made by Carreyrou, saying they were “factually and scientifically erroneous and grounded in baseless assertions by inexperienced and disgruntled former employees and industry incumbents”.

Following this report, Walgreens, who had announced their intention to open Theranos blood testing centres, suspended their plans. At the same time, the Cleveland Clinic announced that they were going to verify all Theranos technology. In April 2016 The New York Times wrote that Theranos was under investigation by federal prosecutors, and by the Securities and Exchange Commission (SEC). 


Consequences for Holmes

In March of 2018 the Washington Post reported that Theranos, CEO Elizabeth Holmes and former president Ramesh Balwani had been charged by the SEC, claiming they had engaged in “elaborate, years-long fraud” where they “deceived investors into believing that its key product — a portable blood analyzer — could conduct comprehensive blood tests from finger drops of blood”


This was followed by a settlement with Holmes where she was required to pay $500 000 and forfeit 19 million shares of company stock. She also received a 10-year ban on serving as an officer or director of a public company. 


The entire saga is remarkable enough to have caught the attention of Hollywood. There will be a movie adaptation of Carreyrou's recently released book, Bad Blood: Secrets and Lies in Silicon Valley, documenting the rise and dramatic fall of Theranos.


The future
With the fall of Theranos, companies such as Genalyte are being watched very closely. “We’re being held to a high standard, and that’s fine”, said Gunn to the Financial Times. When it comes to Theranos, he is positive about what they were trying to achieve. "Decentralising diagnostic testing — getting it into the hands of patients and doctors, where decisions are truly made — is the right idea.” he continues.

It remains to be seen if Genalyte can pick up the heavy mantle from Theranos and succeed where they failed. As founder Cary Gunn puts it, “We’ll know we’re truly impactful when no one asks us about Theranos anymore”.





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