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US Regulators Find Serious Deficiencies At Theranos Lab (wsj.com)

An anonymous reader writes: 2016 has not started well for blood-testing startup Theranos. Already facing allegations of data manipulation, the Centers for Medicare and Medicaid Services have found problems with Theranos' laboratory in Newark, California, putting the company's relationship with the Medicare program in danger. WSJ reports: "It isn't clear exactly what regulators have faulted Theranos for in their latest inspection, which took several months. Adverse findings would be another regulatory setback for one of Silicon Valley's highest-profile startups, valued at about $9 billion in 2014. Theranos already has stopped collecting tiny samples of blood from patients' fingers for all but one of its tests while it waits for the Food and Drug Administration to review the company's applications for wider use of the proprietary vials called 'nanotainers.' In October, the FDA said it had determined that the nanotainers were an 'uncleared medical device.'"

17 of 66 comments (clear)

  1. Awesome job, guys! by fuzzyfuzzyfungus · · Score: 4, Insightful

    So, going from a revolutionary plan to do tests with markedly less blood using your super-neat proprietary hardware to not even being able to operate off-the-shelf hardware from competitors well enough to satisfy Medicare?

    I guess we can't all be disrupters...

    1. Re:Awesome job, guys! by 110010001000 · · Score: 3, Funny

      Guys? The CEO is a woman. Don't be sexist.

    2. Re:Awesome job, guys! by Anonymous Coward · · Score: 5, Interesting

      Nothing easy about it

      I led a team that developed a shipping/receiving system for the collection of tissue.
      At the time that we did the work the direction from the FDA led us to believe that it would not be a medical device
      18 months later, when they saw out spiffy new system in the field, they questioned why we did not apply to have it released as a medical device...

      This became a 'Big Deal' as the FDA threatened to recall about three months of product ($50 - $70 million in value) if we could not demonstrate complete traceability through the system with clear reporting of every sample

      Fortunately we designed every piece of the system as if it were a med device and came through the audit with flying colors

      Unfortunately the company that I worked for would not submit the system for formal review as a medical device and we pulled it out of service.

      Understanding the FDA requirements for a medical device, and staying in touch with them throughout your development process to make certain that they have not changed their direction is essential to staying alive in that market space

  2. Re:Regulation; is there no harm it cannot bring? by Software · · Score: 4, Informative

    Theranos has been making extraordinary claims and providing no proof (to the public, anyway).

  3. Re: Regulation; is there no harm it cannot bring? by Entrope · · Score: 3, Informative

    Why do you say they are technically savvy? Their marketing appears to be savvy, but all the impartial stories I've seen (including from Reason, which is usually against regulators and incumbents who benefit from regulations) give the impression of dodgy technology at Theranos.

  4. Re:Regulation; is there no harm it cannot bring? by Anonymous Coward · · Score: 2, Funny

    Here come the fans of personal responsibility, blaming their failures on others...

  5. Re: Regulation; is there no harm it cannot bring? by Entrope · · Score: 2

    I've read that they have at least one patent. They do not seem to be doing very well on the "reduction to practice" bit that is supposed to be a prerequisite for getting a patent, though.

  6. Re:Regulation; is there no harm it cannot bring? by russotto · · Score: 2

    A capillary blood collection tube is Class I and not subject to pre-market approval (21 CFR 864.6150). But for some reason the Theranos capillary nanotube is class II? Why?

  7. it's not a story about blood by supernova87a · · Score: 5, Insightful

    The real story here is not about some medical device or a failed test.

    The story, and reason we take pleasure in this downfall is because a charismatic, supposed prodigy, Stanford-privileged, everyone-wants-to-believe-in-successful-woman CEO, who was able to convince funders based on flashy visions and compelling talk, has been found out to have nothing behind the emperor's clothes. And that so many people who are purportedly expert at evaluating technology got collectively duped/brainwashed into believing a whole bunch of fluff based on no more than a TED talk-level technology pitch.

    While others who are working on real demonstrable technology, and do not get the benefit of celebrity status, Silicon Valley connections, get passed over for grants / VC money / recognition because they're not connected or privileged in the same way.

    Stop believing so much in the vision and hype. Ask for and act on real results more.

    1. Re:it's not a story about blood by Krishnoid · · Score: 3, Funny

      Between that description and the name 'Theranos', this sounds like the backstory for the next version of an upcoming post-apocalyptic FPS.

    2. Re:it's not a story about blood by N7DR · · Score: 4, Interesting

      And that so many people who are purportedly expert at evaluating technology got collectively duped/brainwashed into believing a whole bunch of fluff based on no more than a TED talk-level technology pitch.

      I am frequently amazed at how willing VCs tend to be to provide money while at the same time being unwilling to express skepticism, even to themselves, about the claims of some of the companies they fund.

      Some time ago, after a particular VC firm had dumped $40m into a "security" (for which read "snake-oil") company, the company suits happened to make a closed-door presentation which, unknown to them, a handful of people with practical security expertise had been invited to attend. A VC representative was also in attendance, although he did not speak. When we recommended, after the talk, that the listeners have nothing further to do with the company product, the VC representative sought one of us out (it happened to be me) and the end result was that I spent a day at the company facility, towards the end of which I had a short meeting with the VC representative and explained at an intelligent layman's level why the product could never work. The money pipe closed that day. But I remain puzzled as to how $40m could have been dumped into a scheme that was so obviously flawed.
       

  8. Re:Regulation; is there no harm it cannot bring? by Tsu+Dho+Nimh · · Score: 2

    How do they manage to get by with less material than is generally required, and have they been able to show (through data reproduction) that their techniques get the same results with less?

    So far as I know, they haven't let any independent labs near their technology. To me, an ex-med tech, that is extremely suspicious. If the technology is sound, they should be bragging about it, taking it to trade fairs and letting large hospitals test it out.

  9. Re:Regulation; is there no harm it cannot bring? by smooth+wombat · · Score: 3, Insightful

    Even worse, a recent article indicated they had effectively stopped using their own process for testing and had gone back to using the previous method.

    If anything screams scam, that should be a flashing red light.

    --
    We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
  10. Re:Regulation; is there no harm it cannot bring? by Anonymous Coward · · Score: 3, Insightful

    Theranos device has integrated testing capability and the capillary tube contains the sample while it is delivered to a desperate testing device, which in all likelihood is a medical device

  11. Re:Regulation; is there no harm it cannot bring? by Anonymous Coward · · Score: 2, Informative

    I'd say there's a better than even chance some large testing companies have put the fix in to make sure this technically savvy startup gets shut down.

    Actually, we're not. I'm pretty high up in finance in the California division of the largest testing company. I don't speak for my company so I'm posting as AC.

    It's an interesting situation. We're taking a wait-and-see approach to what Theranos is doing. This is a very highly regulated business, and Theranos' approach was backwards-- they set up their business associations before getting the necessary governmental and regulatory approvals. Start-up style, if you will. And it's coming back to bite them now.

    That's not to say that we won't adopt some of their approaches if it works out. From a business perspective, their plan for consumer-driven testing is an fascinating one. They are targeting the healthcare consumer rather than the physician, which turns the testing world on its head. Unfortunately, that's a lot harder in California than it is in most other states, though.

    The medical testing field is weird that way. The physician, who is the only one who can order most testing, is our customer. So are the insurance companies, and the government, in their role as Medicare/MediCaid administrators. The patient, who supplies the sample and usually pays part of the bill, currently has little or no say about what company actually does the testing. Theranos plans to turn that sideways, which is a very interesting approach. I hope it works out because we'll all benefit. I'd probably be executed for saying so, but if our company has to give up a little so that the patients benefit, I don't have a problem with that.

  12. Re:Response is simply common sense by rockmuelle · · Score: 4, Informative

    "Are you so sure? Does it not make some sense that advancements could be made on how much you need to collect?"

    On this point, yes, we're pretty sure.

    Here's the problem: when there's something bad (bacteria, virus, mutated DNA) in your system, it usually appears in very small copy numbers (copy number is a technical term that tells you how many copies of something you see in a given sample). The relative abundance (another commonly used term that tells you how common your target is compared to everything else in the sample) of the bad stuff (not a technical term) is usually very small compared to the good stuff. So much so, that often times you need a large sample just to get a single copy of a bad thing. In most biological systems, we're talking needle-in-a-haystack small copy numbers for bad things.

    Think of it this way: Let's say you have a gallon bucket full of coins with only a few quarters. You randomly sample a cup of coins. Can you confidently say there are no quarters in the bucket? Now say the coins are flowing through a series of tubes (no, these are not bitcoins on the internet) and your sample is determined by the coins present when you siphon off your cup's worth. What would the relative abundance need to be before you can confidently say quarters are present in the system using a cup for sampling? How about using a quart for sampling?

    Somewhat like the laws of thermodynamics limit the ability to create perpetual motion machines, relative abundance/copy number place hard limits on the sample sizes needed to detect things in blood with confidence.

    -Chris

  13. Re:Response is simply common sense by rockmuelle · · Score: 3, Interesting

    Single cell sequencing isn't useful as a diagnostic technique for the same reason I outlined above: every cell has a slightly different genome sequence.

    When you're sequencing for diagnostics, you need a consensus genome for the tissue or tumor, not the genome for individual cell in the tissue or tumor. That's because not every cell in the tumor will necessarily have the variation that led to the tumors and it's possible for a single tumor cell to be in the healthy tissue. It's only over populations of cells that the negative effects can be measured properly.

    If you're measure gene expression instead of DNA variants (e.g., looking for gene fusions), the problem is even worse. Not only do you need to sample many cells, but some of those cells need to be actively expressing the damaged gene to be able to sequencing it.

    Disclaimer: I helped develop a single cell sequencing product and currently run a gene sequencing software company. I'm also friends with people at the FDA. I can assure you, they're not protecting profits for anyone and have the best interests of the patients in mind. It might look like bureaucratic overreach at times, but their goal is for only safe products enter the marketplace.

    That goes for interpretation, too, which is why 23andMe got smacked down so hard. The science connecting genotypes to phenotypes is not as strong as the popular press would have you believe (there's currently a reproducibility crisis in the whole genome association study (WGAS) community, where most of the disease/gene associations come from). Sure, you can go to pub med and read all the studies, but understanding the body of knowledge to place those studies in context is difficult even for professionals.

    -Chris