Theranos, the embattled biotech company that has seen more than half its board members quit following a tsunami of negative media coverage, is now facing a new scandal.
The company, and its high-flying founder Elizabeth Holmes, had promised to shake up the world of blood-testing with cheap, handheld devices called ‘Edison’ machines. They were one of the darlings of the Silicon Valley and political establishments, but the company went from miracle to disaster overnight as news emerged that its supposedly revolutionary blood-testing devices failed to produce accurate or consistent results.
Now the company is facing allegations from its former employees, who claim the company manipulated data to cover up the scale of their product’s failings.
One of the former employees told the Centers for Medicare and Medicaid Services (CMS) that quality-control tests of Theranos’ blood testing devices yielded data that was off by three standard deviations, a statistical red flag pointing to accuracy problems with Theranos’ devices.
According to the employee, when they alerted their superiors at the company, a member of R&D arrived in the lab to delete the inconvenient data.
Two other former employees also say that managers instructed them not to enter or exit the lab containing Edison devices while CMS auditors were visiting the premises. According to the employees, the inspectors toured the upper half of the building but did no go to the downstairs lab where the Edison machines were kept.
In another incident, a former employee said he sent an email to the CEO, Elizabeth Holmes, in 2014, alleging that the company had “cherry-picked” data to make their blood tests look more accurate.
In comments to the Wall Street Journal, Theranos representative Brooke Buchanan denied that the Theranos employees had deleted inconvenient data. In the case of the email to the CEO, Buchanan put the blame on the employee, who she said was too inexperienced to “make these types of comments.”
Theranos is currently facing an investigation from the FDA following a complaint that the company had instructed employees to use its blood tests on patients despite the fact that issues with its “stability, precision, and accuracy” were well known to the management.