Reviewed: John Carreyrou, Bad Blood, Picador, 2018
Blood is not a single substance, but a collection of individual parts that comprise a magical fluid that maintains life. It’s made up of many components: red blood cells that carry oxygen to tissues and give blood its colour; cells from the immune system; and large biomolecules such as proteins, salts, nutrients, fats, hormones and medicines. Blood and blood vessels serve as the body’s highway, and blood can reveal much about your health. Before it can be tested, it must be drawn and separated out into its components. This is the most efficient and widely used diagnostic tool in medicine.
How much blood do you need to test to get an accurate diagnosis? This preoccupies scientists who seek new ways of testing for disease: more accurate tests using less blood, or brand-new tests that are better than the ones invented before. What do you test for as a marker of the disease or deficiency you are looking for? This is the primary concern of medical researchers in this field.
It’s difficult, for example, to test for many non-blood-related cancers because we are still seeking markers that are indicative of each type of cancer. One must sift through all the substances, nutrients and cells in blood to detect that one marker or analyte; it has to be in the right quantities even to be detected, and we have to have a way of reading the amount. And then there’s the issue of phlebotomy—the drawing of blood. The search for a vein can be difficult in some patients and potentially very painful, and the drawing of volumes of blood and a fear of needles can make the process a deeply unpleasant experience.
It’s this fear of needles that drove Elizabeth Holmes to found Theranos: the idea of inventing a device to perform analyses on a single drop of blood. John Carreyrou’s Bad Blood charts the spectacular rise and fall of Theranos, in which he played a critical part, and the immense fraud of Holmes.
By now the story of Theranos has been widely reported, but in 2015, when Wall Street Journal reporter John Carreyrou began investigating the company, Theranos was still valued at around US$9 billion. Its investors included the likes of Rupert Murdoch and Tim Draper, and its board included Henry Kissinger and George Schultz, for example. Holmes was a breakout STEM superstar, doing the rounds of TEDMED, the Clinton Global Initiative and magazine interviews. No-one expected that the entire company and its directors would be subject to intense scrutiny and sanction from the media and US regulatory agencies, or that by 2018 Theranos would be completely defunct.
John Carreyrou was the investigative journalist instrumental in exposing Theranos, and his account of the company, Holmes, her partner Ramesh ‘Sunny’ Balwani and the Theranos board (packed with well-connected and powerful men and no women) makes a riveting, highly detailed story, almost in the manner of a thriller. It’s an engaging, if intricate, read. Each chapter reveals a new level of fraud and deception, and levels of bullying and paranoia that beggar belief. The sums of money exchanged—and defrauded—are mind-boggling to the average scientist. Indeed, as a scientist it’s frustrating, enraging and even painful to read.
Carreyrou is an essential character in this modern fable of greed and deception; and his role is covered later in the book. Carreyrou got lucky. He was tipped off by Dr Adam Clapper, a clinical pathologist in Missouri who had read a profile of Holmes and Theranos in The New Yorker. Clapper was deeply sceptical that a college dropout with little to no research experience could come up with an entirely new technology.
Until that point, the level of coverage of Theranos and Holmes was positive, if not actually gushing. Perhaps the first questions came from The New Yorker’s Ken Auletta, who interviewed Holmes in December 2014. Compared to other journalists, Auletta was one of the first to note the intense level of paranoia and secrecy around the company. He suggested that this was typical of Silicon Valley start-ups; but this behaviour is relatively unusual for medtech.
In a sign of the things to come, Holmes is quoted as describing the processes used in the Edison—the code name for the product—as ‘a chemistry is performed’. Up until that point, few journalists had critically examined Theranos, perhaps in large part because they were tech journalists. While Theranos was partly a tech company, it was really a biotech or medtech company. This meant that the product development could only go at a glacial pace in comparison to conventional software and hardware. It had no real working prototype and sought investors to fund research and development that is normally carried out long before venture capitalists come into the picture.
Theranos was founded ostensibly on the principle that patients should have more control over their own health care; the idea was to create the devices and market for more individualised and rapid blood tests. The ultimate goal was to have small devices, designed with the elegance and intuitive interfaces of the iPhone and iPad in mind, for use in the average home so that blood testing could be done more frequently and accurately.
The advantages, according to Theranos and Holmes, included avoiding the use of needles to draw large quantities of venous blood, meaning only a minimal amount of blood was needed to carry out hundreds of tests that could then be beamed to a GP. It would eliminate the need for independent lab testing and wait times, and would empower patients by allowing them to carry out regular, inexpensive testing and monitoring. Most importantly, as Holmes would later assert in her TEDMED presentation, her main motivation was early detection of disease with the aim of preventing unnecessary early death. It was a singularly American vision of individualised health care in a landscape where pathology testing was not covered by any form of universalised state health care. And if it could be pulled off, it would revolutionise the industry.
What becomes very clear in Carreyrou’s account is that while Holmes had a grand vision, she lacked the background knowledge, experience, ethics and vision to carry this idea through. She had good scientists working for her, but unscrupulous people managing them. People like her partner, Balwani, who had no science background; a board comprised chiefly of ex-diplomats and venture capitalists who had neither a background in medicine nor the wherewithal to do appropriate due diligence. Channing Robertson, while an emeritus professor of chemical engineering, clearly also did not have the right advice, knowledge and experience to offer. And there was Holmes, who quit her chemical engineering degree at Stanford in her second year, denying herself some of the background knowledge and basic experimental skills that might have helped her as a CEO of a medtech company. These are just some of the factors Carreyrou chronicles that contributed to the downfall of Theranos.
Holmes had taken her precocity to Stanford with her. After a few classes on microfluidics, she spent days and nights working on a potential patent for a device—an arm patch—that would detect infectious agents in the blood and deliver treatments in the form of antibiotics. Such a patch would enable remote dosing of a patient without having to consistently test the blood through a lab. The treatment would be automatic. With the unwavering self-belief of the young, she took her idea to Professor Phyllis Gardner, a founder and board member of many medtech and pharmaceutical companies, and professor of medicine at Stanford. Gardner realised early on that the patch was a nice concept but highly unfeasible and difficult, if not impossible, to construct. To begin with, in 2002 the technology to inject drugs into the skin without significant damage had not been invented. The device would have to draw the blood and then analyse it—all the blood cells, white and red, would have to be separated and the infectious agents separated. A whole new test might have to be invented just to correctly identify the infectious agent.
‘The idea was simply that she was going to make a microfluidic patch to sample blood, to test for infectious organisms, and then deliver antibiotics through the same microfluidic channels,’ said Professor Gardner on The Dropout podcast (ABC America).
Gardner’s professional scientific opinion was ignored by Holmes, who took her idea to Professor Channing Robertson, then head of chemical engineering at Stanford. Chemical engineering is a very broad field, from industrial chemistry to the bioengineering of the kinds of devices that Holmes was keen to create. Holmes waited outside Robertson’s office until he finally spoke to her. He was entranced by the idea, and immediately took it on board, recruiting one of his doctoral students to help Holmes with the experimentation and construction of the device. Holmes formed a company and Robertson helped her shop around for investors. Eventually she dropped out to pursue the work full time.
They abandoned the patch early on, but by this time Holmes had moved on to another idea: using a single drop of blood to test for a range of diseases and metabolites. She imagined a device similar to the hand-held blood-sugar testers, where a tiny pinprick of blood could do much more than monitor blood sugar levels and would be small enough to reside in every home, enabling patients to monitor their own health.
The ‘single drop of blood’ concept became Holmes’s obsession. What’s not clear is what kind of advice she was getting—if she was seeking any—on how to create a device that covered hundreds of blood tests. The engineers she employed did what they could, eventually jerry-rigging a clumsy robot used for assays in labs to create the first Edison. It was unreliable and poorly constructed, but Holmes and Balwani persisted and persuaded a range of investors and companies to further fund their work. When their ambitions expanded and they decided to add extra tests even though they were behind schedule, they obtained testing machinery from existing biotech companies such as Siemens and broke into them, repurposing them. Results for patients would be obtained on the Siemens machines and would be passed off as coming from the in-house tech.
Holmes and Balwani siloed their departments from each other, and actively lied about Theranos’s machines. They falsified data and deceived their investors. Carreyrou presents this skulduggery, scientific laziness, lack of innovation and outright fraud in almost gleeful, horrified detail.
What is missing in the book, and this is not something Carreyrou can really help, is insight into Elizabeth Holmes’s character and motivations. We have an idea of her vision and her commitment—that is never in question. But her motivations, the nature of her decision-making and what led to it remain puzzling. The main character and driver of this disaster remains opaque and unreadable.
To be fair to Carreyrou, this is chiefly because Holmes carefully cultivated her persona, all the way to her voice and her outfits, and did not grant Carreyrou any interviews. Theranos employees would have morning meetings with Holmes and Balwani where they would chant and curse Carreyrou’s name. Her talks and interviews on various panels give us some insight, but there have been no interviews since the scandal broke.
Holmes certainly did not seem to start out with the intent to commit fraud. She was born to a well-connected family descended from the Fleischmanns, once one of the wealthiest families in the United States but now long bereft of the family fortune. Carreyrou details what he can glean of Holmes’ background and family life from various sources, including former family friends who would later become bitter enemies.
Chris Holmes, Elizabeth’s father, impressed upon his children the need to live a purposeful life combined with what seems like a sense of faded glory—his grandfather had lost the family fortune with extravagant living, and all the wealth and status of the Fleischmann family was lost to them. That sense of down-at-heel American aristocracy seems to have partly motivated Holmes’s fierce ambition and drive to succeed. As Carreyrou outlines, Holmes would answer questions about what she wished to be when she grew up by saying she wanted to be a billionaire.
Academic achievement was also celebrated and expected in the Holmes household. From the age of seven, Holmes kept a book of her own inventions, including a time machine that she had planned and drawn up in great detail. She mentions it often in her interviews, along with how she took university-level Mandarin in high school after talking her way in, the letters she wrote to her father about her ambitions as a child, or how she only took a few classes at Stanford before dropping out to pursue her dream of novel health-care devices. These stories are interesting for what they tell us of the motivations and interests of the young Holmes, but perhaps it’s more instructive to note the early tendency to craft a narrative around herself and her company: a young, driven, highly intelligent woman who could not be contained by a mere university’s walls and strictures, whose imagination was always vast and far-seeing, who had a sense of destiny—and entitlement.
To serve this narrative, Holmes cultivated a persona based on her devotion to Steve Jobs. She hired staff from Apple: Anna Ariola, who helped design the iPad, and many of Ariola’s engineering colleagues, including Justin Maxwell, Adam Vollmer and Mike Bauerly. In a huge coup, Holmes poached Avie Tevanian, Jobs’s former right-hand man and software lead. Ariola was chief design architect, hired to streamline the appearance of the Edison, but she also began altering Holmes’ look, transforming her from a daggy scientist to a style that had her wearing only black turtlenecks and black clothing with red lipstick. She bleached her hair and deliberately lowered her voice to a baritone (to be taken more seriously, apparently).
But the physical changes she manufactured were less important than the mystique of her story as a college dropout. In Silicon Valley and in tech media, this is a treasured trope: the college dropout turned billionaire who makes traditional academic pathways seem unreasonably constrained and old-fashioned. There’s no shame in dropping out of university and finding other ways to learn, but some disciplines, most particularly medical research, require extensive knowledge and continued familiarity with the professional literature. Medical research requires experience in continued physical experimentation, innovation and validation. Most of all, it requires time. Most scientific discoveries are the result of at least five to ten years of research, and inventions will often move from proof of concept to prototype, to manufacturable and marketable form.
For all the detail and the shenanigans of Theranos, we don’t read much about the science. That wasn’t Carreyrou’s aim with this book, and perhaps it would have made his already dense and intricate work even longer and more obscure. The clearest message from this saga is that neither investors nor advisers did their due diligence and that no-one consulted scientists.
Scientists were sceptical from the beginning. Many of the ideas that Holmes had were reasonable in principle, but would have worked better in individual miniaturised devices. The company might have fared better had it developed its own tests or focused on developing specific technology that it could then adapt. Instead, once their first idea soured, they went headlong into another idea without any conceptual analysis or experimentation.
The original patch that Holmes envisioned, consisting of microneedles, now exists in the form of Nanopatches. Invented by Australian company Vaxxas, the Nanopatches are being developed with the World Health Organisation to deliver vaccines. (Note that they can only perform one function.) This is a physical limitation related to the size of the materials involved. In the burgeoning field of drug delivery through nanotechnology, hundreds of labs around the world work on small tests that use nanoparticles to generate a signal. They are compact and simple. Perhaps they could have fitted into an Edison.
Medical science is slow and incremental. Theranos was without a working prototype when it began, and its invention was a hodgepodge of existing technologies. It tried to do too much with too little: the devices lacked innovation and imagination beyond creating the nanotainer, designed to draw only a tiny amount of blood. And it wasn’t enough blood to perform the many tests that Theranos claimed could be performed. Hundreds of millions of dollars were invested by venture capitalists who did not do their due diligence on very average technology.
While the siloing, bullying, fraud and blackmail were bad enough, and this is a strange caveat to make, what is perhaps most egregious is how willing Holmes and company were to deceive and put at risk patients for the sake of fame and profit. The Theranos story is a cautionary tale. One can only hope it engenders a healthy scepticism about medtech for investors, journalists and the general public. Perhaps scientists will be consulted more in the future over emerging technology and emerging technology will be more highly scrutinised before being funded.
Holmes began her journey with a desire to help people, change the world and to become a billionaire. Instead, she defrauded billions and endangered the lives of those she had originally sought to help. Ultimately, her downfall was greed.
Upulie Divisekera is a scientist and science communicator with broad experience in scientific research. Trained at the University of Melbourne and ANU, Upulie has worked in cancer research, developmental biology and nanotechnology. She is currently working in endometriosis research at the University of Auckland.