Theranos is facing private litigation, federal investigations, and voided tests, and its business partners have fled. Its CEO, Elizabeth Holmes, is barred from running a lab for at least two years. A Hollywood drama is already underway to memorialize its fall from grace. If that isn't rock bottom for a biotech company, then what is?
But the company hasn't closed its doors; far from it. On Monday afternoon, it is making a big announcement at the American Association for Clinical Chemistry's annual conference in Philadelphia. To a roomful of discerning scientists, Holmes will share much-awaited data on the "precision and accuracy" of its tests. That includes research on how its finger-prick blood test compares to a venus blood draw, and a demonstration of a slew of tests including one to diagnose the Zika virus.
It's a first step to building a bridge to the scientific community, but will it be enough? We spoke to lawyers, doctors, crisis communications experts, and others to gauge whether the company can make a comeback after months of scandal.
"Maybe a year ago, such a presentation would have helped them avoid the troubles they're in," says Bradley Merrill Thompson, a lawyer with the firm Epstein, Becker & Green, who specializes in life sciences. At this point, Thompson believes that the hurdles to regaining the trust of regulators are non-trivial.
As he points out, Theranos made a grave error in hyping up its range of tests too early in its development. The company has only received a clearance from the U.S. Food and Drug Administration, or FDA, for one test: A $9 finger-stick test for herpes. But in the year prior to that approval, the company had heralded its technology as revolutionary and claimed to test for "hundreds" of diseases with a few drops of blood. It'll be very difficult to come back from that.
"They did all that promotion on the basis of inadequate data," he explains. "I imagine anything they release now will be greeted with skepticism." After a career helping companies navigate FDA regulations, he notes that a two-year lab ban on a company executive isn't something that an agency would ever take lightly. "They do it precisely because they've lost trust," he says.
Half-a-dozen physicians interviewed by Fast Company say that it would take far more that a single presentation for them to trust Theranos enough to recommend one of its tests to a patient. That would be the beginning.
"In the eyes of the medical community, you don't get to be back in the game with one published study after a bunch of dubious activities," says primary care doctor and serial entrepreneur Jordan Shlan.
To stand a chance with these physicians, the company would need to follow up from Monday's conference with a slew of validated peer-reviewed studies in top journals. "Real, robust, and validated head-to-head studies," explains UCSF cardiologist Ethan Weiss. It would bolster Theranos’s case if it could show that isn't just on par with its competitors, but that it's better—otherwise why deviate from an incumbent? In that case, Dr. J. Brian Byrd, also a cardiologist, says he would "consider it, I suppose." Psychiatrist and entrepreneur Arshya Vahabzadeh agrees: "I don't want the gold standard from Theranos. I want the platinum standard. My patients deserve that."
Others say that even that would not be enough. One doctor, New York-based pediatrician Jay Parkinson and startup founder, says he wouldn't trust Theranos until it fired Holmes and struck a deal with the Centers for Medicare and Medicaid Services that it will publish all its data, both positive and negative—for five years.
"I appreciate some tech culture in medicine,"adds Shlain, who has also started several health-technology startups. "But you don't get to dabble with patients' lives."
Experts are divided on whether Theranos has a shot with consumers. It already has a direct-to-consumer offering of sorts in Arizona, where people can order a lab test without a doctor’s note. It’s worth noting that in Theranos’s life cycle, Arizona is the state that drives the highest volume of searches according to Google Trends. And that the top queries are about location and its former partnership with Walgreens, which suggests a continuing interest in accessing these tests among consumers.
As Merrill Thompson points out, many of us don’t read the business page and might not be familiar with the saga. But that might change when the movie, in which Jennifer Lawrence will play Holmes, is released in the coming years.
Communications experts say the company would need to pivot or change direction to win back the public’s confidence. "I don’t think there is a way back for Theranos through its current offerings within the next few years," says Jesse Hamlin, vice president at Eastwick, a Silicon Valley-based public relations firm.
That said, there have been cases in which executives in worst straights (albeit male) have made a comeback. One example that Eastwick founder Barbara Bates points to is the case of the former star tech banker Frank Quattrone, who rehabilitated his image after being sentenced to 18 months in federal prison in the early 2000s for obstructing a federal probe into improper allocation of IPO shares by his firm.
For Hamlin, another important step for the company is a "flat out apology." Holmes recently told NBC News, "I'm the founder and CEO of the company; anything that happens in this company is my responsibility." But as Hamlin points out, that’s not the same as a sincere and honest apology—"in the court of public opinion, that is a powerful tool."