The Theranos case is among the most notorious Silicon Valley failures involving a biotechnology company whose CEO was Elizabeth Holmes. Established in 2003, Theranos claimed that they had reinvented blood testing by being able to run various complex tests with only a tiny amount of blood. However, the technology failed to operate according to the claim, resulting in litigations and investigations (60 Minutes Australia, 2021).

John Carreyrou, a reporter for the Wall Street Journal, was primarily responsible for revealing the problems at Theranos. As a result of his investigative work, lawsuits were instituted by investors like Robert Colman and companies like Walgreens, as well as patients in Arizona who claimed monetary compensation due to the unreliability of blood-testing machines (cold fusion, 2019). This process established the basis of the criminal suit against Theranos, as the reason Holmes was found guilty of defrauding investors in 2022 was primarily due to these lawsuits. She was sentenced to over eleven years behind bars and is now appealing the verdict.

Cases like Holmes admit to pharmaceutical logos errors used on reports during the trial as much as the others. After that, vital witnesses, including former Defense Secretary James Mattis and former Theranos lab directors, were called to testify about the improper management and operation that prevailed within the company. The case was brought to the public’s attention through various media adaptations, with Hulu’s TV show “The Dropout” being one of its most memorable examples of the journey of Theranos and Holmes. This mini-series and other such accounts remind one of the catastrophic results of nondirectional corporate behavior, thus stressing transparency and accountability in the biotechnology sector.

The Theranos case indeed emphasizes the pivotal role of due diligence for investors. They spent money on technology in large sums, just going along with Holmes’s words and presentations represented on 60 Minutes Australia (2021). This highlights that the cautious approach to investment assumption should be applied because reports might not reveal everything about the portfolio in question. However, investors should be thorough with the analysis process. In short, the Theranos story is a clear warning that there should be stricter regulations and oversight in the biotech industry to avert such disasters and guarantee that the products work properly.

References

ColdFusion. (2019, March 1). Theranos – Silicon Valley’s greatest disaster [Video]. YouTube. https://www.youtube.com/watch?v=3CccfnRpPtM

60 Minutes Australia. (2021, August 8). Elizabeth Holmes exposed: The $9 billion medical ‘miracle’ that never existed | 60 Minutes Australia [Video]. YouTube. https://www.youtube.com/watch?v=BgNfrDXr7uA