Despite Theranos scandal, Silicon Valley still believes in the promise of easy blood tests

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Silicon Valley still believes that it can make computers that can diagnose medical problems from blood drops, even the founder of the failed startup Theranos Appear in court This week was accused of defrauding investors with such a vision.

In the past 12 months alone, investors have invested more than $200 million in three start-up companies trying to make small blood testing equipment, which shows Seranos The scandal has not harmed the fast-growing medical diagnostics market.

Indeed, the life sciences division of Google’s parent company Alphabet led a $50 million round of financing for Genalyte in January. The company created a desktop machine that is expected to perform multiple rapid tests on a small amount of blood. Andy ConradThe CEO of Verily and the former chief scientific officer of LabCorp joined the company’s board of directors.

General Catalyst is a venture capital company with a market capitalization of more than US$8 billion, chaired by Ken Chenault, the former CEO of American Express. The company backed Truvian Sciences in a US$105 million funding round in February. According to its website, Truvian is developing a portable machine that “fulfills its promise of providing accessible blood tests from a small blood sample in minutes.”

Sight Diagnostics is an Israeli company that has received limited approval from the Food and Drug Administration to use its portable devices for complete blood counts. Last August it raised $71 million from investors, including Koch Industries’ venture capital arm .

According to data from PitchBook, as of the end of August this year, companies in the broader device diagnostic category had raised $6.1 billion, more than the entire year of last year and almost three times the total revenue in 2019.

The start-up called the rise and spectacular decline of Theranos, its founder Elizabeth Holmes They are currently being tried for fraud in California, forcing them to work harder to overcome skeptical investors, but it also helps reveal the size of the potential market.The coronavirus pandemic is also Accelerated demand, they said.

Cue Health has developed a palm-sized device that can perform various tests, and recently estimated that the diagnostic market is worth $85 billion. Record Used for initial public offerings. Cue said its equipment can be used to detect infections in blood samples, such as hepatitis C and HIV.

After Theranos collapsed in 2018, Luc Gervais raised more than $4 million for his start-up company 1Drop Diagnostics. He said his supporters asked him to provide more papers and scientific data, which he claimed would benefit him. “The results were better than we expected,” Gervais said.

Although many start-ups hope to install their products in retail chains, similar to the way Theranos and Walgreens work together, some doctors still doubt how many tests can be provided directly to patients.

Edward Ashwood, professor of clinical pathology and vice chairman of the University of Colorado School of Medicine, said: “Some pharmacy-based tests may be complementary to clinical laboratory tests, but they are not destructive.”

Many startups still lack the peer-reviewed results of the various tests they are developing, and this issue caught the attention of Theranos’ early critics.

Genalyte CEO Ashraf Hanna, who joined the company at the end of last year, said that Verily hired scientists and engineers to review the company’s machines, test laboratory procedures and audit its intellectual property before investing.

“Investors are much smarter,” said Hannah, who is also a former Verily executive.

The US Food and Drug Administration has approved Genalyte’s Maverick device to test for autoimmune diseases and Sars-Cov-2 antibodies. Genetic analytes It is planned to submit more extensive tests for FDA approval before the end of the year.

“We have a responsibility to prove that this is a safe and effective diagnostic method that is as accurate as what we do today, or even more accurate,” Hannah said. “I think the FDA will welcome this.”

The chart shows the estimated value of Theranos

Truvian was founded in early 2015. Kim Kamdar, a venture capitalist who previously focused on biotechnology, began brainstorming ideas for a diagnostic startup that could appeal to the retail market.

Domain provided millions of dollars in seed funding in 2015, and Kamdar became Truvian’s founding CEO. But she found out very early, Theranos crash The goal has been “moved”, which makes it difficult to raise additional funds before the company can show concrete progress.

“This idea is no longer enough,” Kamdar said. “Now we need to really have the data that can be generated on our platform.”

Jeff Hawkins, who was appointed as CEO in 2018 when Truvian raised the next round of funding, said that he had talked with a number of funds that were suddenly interested in diagnostic companies because Pandemic.

“When people can see the blood being loaded into the machine with their own eyes and produce results in 25 to 30 minutes-as they say, seeing is believing,” Hawkins said.

Truvian’s device is still under development and is awaiting FDA review. Hawkins said the company plans to announce test data at an industry conference later this year.

Hawkins said that companies that promise to conduct a series of tests from a drop of blood, such as Theranos, are trying to sell an impossible vision. “For various reasons, a drop of water does not seem to be something you can do,” he said.

But Gervais, who aims to allow 1Drop to perform multiple tests on a drop of blood, disagreed and said his company also plans to release data on the accuracy of its tests. “It has never caused controversy,” he said.

Elizabeth Holmes and the downfall of Theranos

© AFP via Getty Images

Year 2003

After dropping out of Stanford University, the 20-year-old Elizabeth Holmes founded Theranos

year 2004

Theranos raised its first round of funding from investors including Tim Draper’s DFJ

year 2013

Walgreens begins offering Theranos testing in Palo Alto, California

Year 2014

Fortune magazine introduced Holmes and Theranos, revealing that the company has been valued by investors at US$9 billion

September 2015

Seranos Stop its iconic finger stab Blood collection method after FDA review

October 2015

The Wall Street Journal published a survey that raised doubts about the accuracy of Theranos test

January 2016

The Center for Medicare and Medicaid Services told Theranos that its laboratory poses a risk to patients

June 2016

Walgreens terminates cooperation With Theranos

March 2017

Theranos settled a lawsuit filed by one of its investors, Partner Fund Management, which has invested nearly US$100 million

March 2018

The SEC filed fraud charges against Theranos, Holmes and former President Ramesh Balwani.Holmes and Theranos settle allegations

June 2018

The U.S. Department of Justice sues Balwani and Holmes for defrauding investors and patients

September 2018

Seranos Liquidated And transferred its patent to Fortress Investment Group

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