The remarkably low number of influenza diagnoses makes it possible for clinical laboratories to stay focused on COVID-19
One positive note for clinical laboratories this winter is the fact that the number of biological samples being submitted for influenza (flu) testing have dropped significantly. This has given medical laboratories more resources for processing COVID-19 tests.
According to a feature published in Nature, the number of samples being submitted to medical laboratories for flu testing has dropped by 61%. More surprisingly, the number of positives has dropped by 98%. The combined flu/COVID-19 “twindemic” that some medical experts feared could crush our healthcare system has not materialized—yet, the Washington Examiner reported.
“In any given winter, hospitals are taxed by the flu,” Brian Garibaldi, MD, a pulmonologist and critical care specialist and Medical Director of the Johns Hopkins Biocontainment Unit told the Washington Examiner. “There’s always a concern that our emergency departments will be overwhelmed, and ICU capacity will be strained [due to the concurrence of flu and COVID-19 outbreaks], particularly with people who have coexisting conditions that then get influenza.”
The 2019-2020 flu season ended earlier than usual, likely because of precautions put in place in the spring to combat the coronavirus pandemic. Most years, the seasonal flu in the US peaks in February and trails off by May, Nature reported in “How Coronavirus Lockdowns Stopped Flu in Its Tracks.”
“Seasonal flu cases in the northern hemisphere usually peak in February and tail off by the end of May,” Nature wrote. “This year, unusually, lab-confirmed cases of influenza dropped precipitously in early April, a few weeks after the coronavirus pandemic was declared on 11 March. The data comes from tests of more than 150,000 samples from national influenza laboratories in 71 countries that report data to FluNet, a global surveillance system.”
Government Leaders and Health Experts Remain Concerned
Despite that encouraging data point, public health experts and political leaders were still concerned. In September, Arizona Governor Doug Ducey said, “The overlap of COVID-19 and flu season presents a perfect storm, and we aren’t taking any chances. We are approaching this fall with a proactive mindset and plan of action to limit the impact of the flu and preserve hospital resources,” the Washington Examiner reported.
The caution was certainly warranted. A normal flu season strains resources, but a severe flu season coupled with a global pandemic could have been disastrous. Luckily, Ducey’s “perfect storm” did not materialize.
Why Is There Less Influenza?
So, why is there less flu and other respiratory infections?
Epidemiologist Lisa Lockerd Maragakis, MD, MPH, Associate Professor of Medicine and Senior Director of Infection Prevention at Johns Hopkins Health System, told U.S. News, widespread business and school closures provide fewer opportunities for influenza to spread. “We commonly see flu spread in communities, schools, businesses and through travel each year, so those changes are likely keeping the flu away.”
However, this may have a negative effect as well. Eili Klein, PhD, Associate Professor of Emergency Medicine at Johns Hopkins School of Medicine, warns that “Because of the current restrictions and precautions everyone is taking this season, far fewer people will be infected or exposed to the flu virus, and therefore won’t become immune to certain strains of the virus. So, the number of people who may have more severe infections next year is likely to be greater because immunity will be lower,” the Washington Examiner reported.
Other Viral Infections Also in Decline Due to COVID-19 Precautions, Vaccines
Masking, frequent handwashing, and social distancing certainly played a role in reducing the number of cases of flu reported this year. But influenza is not the only disease that saw reductions. “In Hong Kong, compared with previous years, the number of chickenpox cases dropped by about half to three-quarters,” Nature reported. “In April, cases of measles and rubella were their lowest, globally, since at least 2016, according to data available so far.”
Early in the COVID-19 pandemic, some public health officials were concerned that the decline in influenza cases was actually related to a lack of testing. “However, renewed efforts by public health officials and clinicians to test samples for influenza resulted in adequate numbers tested and detection of little to no influenza virus,” the Centers for Disease Control and Prevention (CDC) reported.
Another factor in the lower numbers of flu cases could be due to the fact that more people have gotten vaccinated this year. More than 188 million flu vaccines were distributed in 2020, an increase compared to the 169 million given in 2019.
“Flu vaccination in the community started earlier this year, as recommended by the CDC, and our community physicians report that vaccine uptake has been higher than usual,” Marie-LouiseLandry, MD, Clinical Virologist, Professor of Laboratory Medicine and of Medicine (Infectious Diseases), and Director of the Clinical Virology Laboratory at Yale School of Medicine, told Healthline.
It may also be that influenza diagnoses are fewer because people are not seeking treatment. Hospitals at or beyond capacity due to the pandemic, or fear of contracting COVID-19, may have motivated people with flu-like symptoms to stay home rather than seek treatment. However, most healthcare experts agree that public health measures to fight COVID-19 are likely the larger reason there is less flu.
“Public health measures such as movement restrictions, social distancing, and increased personal hygiene likely had an effect on decreasing influenza and other respiratory virus transmissions,” the World Health Organization (WHO) told Nature.
What About the Next Flu Season?
Experts are more conflicted regarding what all of this means for coming flu seasons. Some experts think that because there’s less flu this year, there will be less immunity next year, and severe illness will result. Others are more optimistic and hope that some strains of flu will disappear, which could mean less flu in the immediate future. It’s not a simple prediction to make.
Even if the low flu numbers this year mean some strains do not survive, it is unlikely that will remain the case. “I am sure that flu will come back with a vengeance at some stage in the future,” Robert Ware, PhD, a biostatistician, clinical epidemiologist, and Professor of Biostatistics with Griffith University in Queensland, Australia, told Nature.
Thus, clinical laboratories should remain vigilant for future influenza outbreaks. Hopefully by then the COVID-19 pandemic will have peaked and labs will be able to reallocate testing resources appropriately.
Such a test, if proved safe and accurate for clinical use, could be a useful diagnostic tool for anatomic pathologists
What would it mean to anatomic pathology if breast cancer could be diagnosed in an hour from a fine needle aspiration (FNA) rather than a core biopsy? A new test created by researchers affiliated with Massachusetts General Hospital in Boston may be just such a game changer. Especially in remote locations where clinical laboratory resources are in short supply.
Regardless of how the next round of research and clinical studies turn out, one reason this development is significant is that it demonstrates how newer technologies and analytical software are being combined to create a faster diagnostic test for different types of cancer.
Another benefit to this research is that it may utilize simpler, less expensive instruments. In fact, the researchers said this test can be performed for about $5. For these reasons, pathologists may want to follow the progress of these researchers as they work to improve this test so it can be used in clinical care.
Affordable Image Cytometry of FNA Specimens
Though still in development, the new image cytometry system, dubbed CytoPAN, has demonstrated the ability to diagnose breast cancer within a one-hour time frame, and, according to the study published in Science Translational Medicine, “is devoid of moving parts for stable operations, harnesses optimized antibody kits for multiplexed analysis, and offers a user-friendly interface with automated analysis for rapid diagnoses.”
The international researcher team included scientists from:
“Here, we report the development and validation of an affordable image cytometry system that allows automated and same-day molecular analyses of fine needle aspiration (FNA) specimens. Termed CytoPAN, for portable fluorescence-based image cytometry analyzer, the system performs multichannel imaging for cancer diagnosis and subtyping,” the researchers wrote.
The CytoPAN technique is minimally invasive, they note, and only requires a few cellular specimens to determine if breast cancer cells are present, with results available in one hour.
“Unfortunately, in many low- and middle-income countries, [breast cancer] diagnosis often takes an extraordinarily long time—up to a few months—due to a lack of specialists and limited laboratory infrastructure,” Hyungsoon Im, PhD, Assistant Professor at Harvard Medical School and one of the researchers involved in the project, told United Press International (UPI).
“From a public health aspect, it is critically important to develop new diagnostic methods that overcome these barriers,” he added.
Because FNA testing is less invasive than surgical biopsy collection, it has fewer complications and is generally considered safe. Thus, it is “feasible to be performed even in resource-limiting settings at much lower costs,” Im told UPI. “This could lead to earlier treatment and accelerate new drug testing in clinical trials.”
CytoPAN Testing and Additional Trials
The researchers tested CytoPAN on 68 breast cancer patients in South Korea.
“To determine the clinical utility of the approach,” they wrote in the published study, “we next conducted a prospective clinical study in which the FNA could be directly compared to conventional pathology results. We enrolled treatment-native patients at the Kyungpook National University Chilgok Hospital (Daegu, South Korea) and who were referred for primary surgery. All patients consented to have a preoperative breast FNA before clinically indicated surgery. The breast masses were visualized by ultrasound or computed tomography, and a coaxial needle was introduced through which FNA samples (CytoPAN) and core biopsies were obtained. Surgical specimens and/or core biopsies were processed by routine pathology and served as the gold standard.”
The CytoPAN platform detected the presence of breast cancer cells with a 100% accuracy, using as few as 50 harvested cells per collected specimen.
The test also successfully identified two key breast cancer biomarkers:
“We are also preparing additional trials in the US and other countries,” Im told UPI. “The success in those trials will (hopefully) accelerate … widespread adoption of the technology.”
The researchers are currently testing CytoPAN on a larger number of patients in Botswana, with funding from the US federal National Institutes of Health (NIH).
According to the American Cancer Society (ACS), approximately 300,000 individuals are diagnosed with breast cancer annually in the US. The Union for International Cancer Control (UICC) states on their website that, globally, there are more than two million new cases of breast cancer diagnosed each year. And more than 600,000 people died from breast cancer worldwide in 2018. A disproportionate number of those deaths occurred in developing countries that have limited resources to diagnose and treat the disease.
Additional Research for Other Applications in Cancer Testing and Pathology
The new CytoPAN technology requires minimal training, according to the researchers, and only costs about $5 per test kit. This is substantially less expensive than the price associated with other tests available on the market, UPI noted.
Though additional research and clinical trials are needed before CytoPAN will be available for widespread clinical use, a cost-effective, relatively non-invasive test that can accurately diagnose cancer within an hour would be transformational for anatomic pathology and, potentially, could save many lives.
Pathologists may be interested to learn that though a substitute for horseshoe crab blood has been available for nearly 20 years, it has not been widely adopted in the US
Since the 1970s, the blue blood of the horseshoe crab has saved countless human lives by detecting deadly toxins in medical products, as well as its use in a number of medical laboratory tests. Now, that unique blood is playing a vital role in the fight against COVID-19 as well, by enabling pharma companies to ensure the coronavirus vaccines they are giving are free of bacterial contaminants—such as endotoxins—that can harm or kill patients.
Microbiologists and clinical laboratory scientists are familiar with the Endotoxin Activity Assay (EAA), which uses LAL as a way to detect if a critically-ill patient may have whole blood endotoxemia. Published studies show that the detection of elevated endotoxin activity levels is associated with an increased disease severity in patients with sepsis and septic shock.
Horseshoe crab blood is an opaque blue color due to its high copper content. The blood contains limulus amebocyte lysate or LAL (pronounced “el-ay-el”), which either clots or changes color in the presence of bacterial endotoxins. LAL has become the standard to test the safety of many medical devices and pharmaceuticals—including coronavirus vaccines. There are currently no other tests that can analyze the purity of medications and cleanliness of medical devices with the same accuracy as the LAL test.
“The crabs live only on the east coasts of Asia and North America,” Yahoo News reported. “The world’s largest population of American horseshoes winters off Maryland shores and spawns each spring in Delaware Bay. The latest trawl survey puts this population at more than 14 million mature crabs.”
Futuristic Clean Rooms for Extracting Blood
After the crabs are dredged from the ocean floor, or captured as they come ashore for breeding, they are transported to one of a handful of facilities authorized to perform the bleeding process. Once there, the horseshoe crabs are cleaned and sterilized, suspended upside down, and inserted with a needle which extracts approximately one third of their blood.
“These things are being produced in ‘clean rooms’ that look like the stuff they make microchips in,” Glenn Gauvry, Founder and President of the Ecological Research and Development Group Inc. (ERDG) told Yahoo News. ERDG is a 501(c)3 non-profit wildlife conservation organization. Its primary focus is the conservation of the world’s four horseshoe crab species.
Certain laboratory tests developed from horseshoe crab blood are used to detect bacterial contamination in everything from heart stents, saline drips, and flu shots, to surgical implants such as pacemakers and prosthetic devices.
Federal law mandates that any medical device that is inserted or injected into a human body must pass the LAL test for contamination. This makes horseshoe crab blood vital for ensuring the new COVID-19 vaccinations are free of potentially-deadly toxins.
“Without LAL, you’re not going to be able to produce the billions of inoculations that are going to have to come about to handle this pandemic,” John Tanacredi, PhD, Professor of Earth and Environmental Sciences, Department of Biology, Chemistry and Environmental Studies at Molloy College, told CBS News.
A $60 Million/Year Industry
Once the LAL has been withdrawn, the crabs are returned to the wild. The horseshoe crabs typically spend one to three days in the lab while the LAL is extracted. They can survive out of water for up to four days, as long as their gills stay moist.
The crabs are then returned to the fishermen who originally caught them, to be gently placed back into the sea. “We treat these crabs like babies,” Yahoo News reported one fisherman saying. “Blue bloods save lives,” said another fisherman.
The Atlantic States Marine Fisheries Commission estimates that in 2019 labs extracted blood from approximately 640,000 horseshoe crabs in the US. Researchers estimate the industry makes about $60 million per year and that the coveted blue blood is worth about $60,000 per gallon, Yahoo News reported.
There are only four labs in the US authorized to extract blood from the horseshoe crabs. They are located in Maryland, Virginia, South Carolina, and Cape Cod. In Maryland, only three trawlers hold permits to catch the horseshoe crabs from the waters surrounding that state.
“We have a 450 million-year-old creature that for the last 45 years has improved the safety of medicines for humans and animals,” John Dubczak, Director of Operations at Charles River Laboratories, told CBS News.
Allen Burgenson, Global Subject Matter Expert-Testing Solutions, Lonza Walkersville, a division of Lonza Bioscience, told Yahoo News “the [pharmaceutical] industry produces enough tests in one day to screen five billion doses of coronavirus vaccine.”
Synthetic Substitute for Horseshoe Crab Blood Available, But Not Widely Used in US
In response to pressure from conservation groups, researchers in Singapore successfully cloned the blood of horseshoe crabs and developed a synthetic test for endotoxins. The synthetic test, known as Recombinant Factor C (rFC), has been commercially available since 2003 and in some countries in Europe is accepted as equal to tests using horseshoe crab blood. However, rFC has not yet been approved for widespread use in the US.
“You’ve got a very large, biomedical bleeding industry with a vested interest in keeping those horseshoes crabs coming in and basically protecting this monopoly,” Ryan Phelan, co-founder and Executive Director of Revive and Restore, a wildlife conservation group based in California that lobbied for the synthetic, told Yahoo News.
In 2017, Dark Daily reported on the potential threat to horseshoe crabs due to blood harvesting. In “Medical Laboratories Could Be Threatening the Survival of Horseshoe Crabs,” we noted growing concerns that the biomedical industry was having a negative impact on the horseshoe crab population. Since then, not much movement has been made toward establishing the synthetic as the standard test in the US.
Recombinant Factor C might eventually eliminate the need to harvest blood from living creatures. But for now, horseshoe crabs continue to provide a critical component for safeguarding humans against contaminants in medical supplies and pharmaceuticals, including COVID-19 vaccinations.
According to Dubczak, the LAL test “has unequivocally elevated the quality and safety of injectable pharmaceutical drugs and medical devices, and that includes all of the vaccines that protect us,” he told USA Today.
Coronavirus pandemic expected to spur wider acceptance of drone delivery services for clinical laboratory specimens and medical supplies
Routine delivery of clinical laboratory specimens and medical supplies by drone moved one step closer to reality with news that Walmart (NYSE:WMT), Quest Diagnostics (NYSE:DGX), and DroneUp of Virginia Beach, Va., are partnering to bring at-home self-collection COVID-19 test kits to residents of several areas hard hit by the COVID-19 pandemic.
In its race to keep pace with online retailer Amazon (NASDAQ:AMZN), Walmart last September implemented two drone-delivery trials. One, according to Progressive Grocer, is with Tel Aviv, Israel-based drone company Flytrex, to deliver select grocery and household essentials in and around Fayetteville, N.C. The other trial program is with drone company Zipline of San Francisco, to test delivery of certain health and wellness products to areas around Walmart’s headquarters in Bentonville, Ark., Progressive Grocer also reported.
Then, Walmart announced a third pilot project for home delivery—one that could potentially affect clinical laboratories. This time, in collaboration with Quest and DroneUp, Walmart is piloting delivery of at-home COVID-19 collection kits in North Las Vegas, and Cheektowaga, New York, a Walmart news release stated.
Is this yet another example of how the COVID-19 pandemic will continue to drive shifts in delivery of key healthcare services? Probably.
According to Walmart’s news release, “Patients who qualify for drone delivery of the COVID-19 self-collection kits must live in a single-family residence within a 1-mile radius of the designated [Walmart] Supercenters in North Las Vegas and Cheektowaga. The kits will land on the driveway, front sidewalk, or backyard of the customer’s home, depending on where there are cars and trees. There is no delivery or kit cost for customers electing to receive an at-home [COVID-19] kit delivered via drone. Once the kits are delivered, the person will perform a self-administered nasal swab in the privacy of their home and send their sample back to Quest Diagnostics for testing using the included prepaid shipping label.”
The giant retailer’s expanding use of drone delivery systems will likely lead to greater acceptance among consumers of unmanned aerial vehicles for delivering all sorts of personal items, as well as various types of clinical laboratory specimens. If consumers embrace drone delivery systems, clinical laboratories with existing courier and logistics networks may experience another disruption in how they do business.
In a news release following the announcement of a yet another drone-delivery service of COVID-19 at-home test kits—this time in El Paso, Texas,—Amanda Jenkins, Vice President of Operation Support and Implementation, Walmart US Health and Wellness, said, “Walmart has been serving the El Paso community throughout the pandemic with drive-thru testing sites and extended testing hours, and we wanted to provide another way to access testing that provides convenience and leverages technology, while learning how drones could impact the delivery of healthcare in the future,” KTSM-9 TV reported.
Drone Delivery Systems Worldwide for Healthcare
The United States is not the only country turning to drone technology to speed deliveries and reduce person-to-person contact during the pandemic. A World Economic Forum blog post outlined the critical role drones are playing in China, the world’s most populated country, as it responds to the health crisis.
“At the moment of life and death, the air transport network can significantly confine the flow of people, avoid unnecessary physical contact, and prevent secondary transmission,” Lv Yinxiang, Secretary of the Party Committee of the County People’s Hospital, said in the blog post. “Medical samples delivered through air can shrink the delivery time … while saving precious field resources.”
Amazon also is predicting a bright future for drone delivery of all types of goods. In August, Amazon’s Prime Air drone delivery service received approval from the Federal Aviation Administration (FAA) to operate its fleet of drones, CNBC reported. Amazon launched its drone project in 2013 and began the process of seeking FAA approval in 2019.
And in “WakeMed Uses Drone to Deliver Patient Specimens,” Dark Daily’s sister publication, The Dark Report (TDR), reported on UPS’ launch of a drone delivery service on the WakeMed Health and Hospitals medical campus in Raleigh, N.C. The implementation followed a two-year test period during which UPS used drones manufactured by Matternet of Menlo Park, Calif., to fly clinical laboratory specimens from a medical complex of physicians’ offices to the health system’s clinical laboratory.
COVID-19 Pandemic Drives Drone Delivery System Development
Tom Ward, Walmart’s Senior Vice President for Customer Product, predicts the drone delivery systems being rolled out during the COVID-19 pandemic will increase the use of contactless delivery for all types of deliveries, not just healthcare.
“There’s a lot we can learn from our drone delivery pilots to help determine what roles drones can play in pandemic response, healthcare delivery, and retail,” he said in the Walmart news release. “We hope drone delivery of self-collection kits will shape contactless testing capabilities on a larger scale and continue to bolster the innovative ways Walmart plans to use drone delivery in the future.”
The widespread use of drone technology appears to be soaring to new heights as the COVID-19 pandemic moves forward into the new year. Clinical laboratory managers will want to keep their eyes on the skies as this new delivery system becomes more commonplace and potentially disrupts the way laboratory specimens traditionally have traveled to and from medical laboratories.
The St. Louis-based in vitro diagnostics (IVD) developer is making PrecivityAD available to physicians while awaiting FDA clearance for the non-invasive test
Clinical laboratories have long awaited a test for Alzheimer’s disease and the wait may soon be over. The first blood test to aid physicians and clinical laboratories in the diagnosis of patients with memory and cognitive issues has been released by C₂N Diagnostics of St. Louis. The test measures biomarkers associated with amyloid plaques in the brain—the pathological hallmark of Alzheimer’s.
In a news release, PrecivityAD describes the laboratory-developed test (LDT) as “a highly sensitive blood test using mass spectrometry and is performed in C₂N’s CLIA-certified laboratory. While the test by itself cannot diagnose Alzheimer’s disease … the test is an important new tool for physicians to aid in the evaluation process.”
PrecivityAD provides physicians with an Amyloid Probability Score (APS) for each patient. For example:
A low APS (0-36) is consistent with a negative amyloid PET scan result and, thus, has a low likelihood of amyloid plaques, an indication other causes of cognitive symptoms should be investigated.
An intermediate APS (37-57) does not distinguish between the presence or absence of amyloid plaques and indicates further diagnostic evaluation may be needed to assess the underlying cause(s) for the patient’s cognitive symptoms.
A high APS (58-100) is consistent with a positive amyloid positron-emission tomography (PET) scan result and, thus, a high likelihood of amyloid plaques. Presence of amyloid plaques is consistent with an Alzheimer’s disease diagnosis in someone who has cognitive decline, but alone is insufficient for a final diagnosis.
The $1,250 test is not currently covered by health insurance or Medicare. However, C₂N Diagnostics has pledged to offer discounts to patients based on income levels.
Additional Research Requested
While C₂N’s PrecivityAD is the first test of its kind to reach the commercial market, it has not received US Food and Drug Administration (FDA) clearance, nor has the company published detailed data on the test’s accuracy. However, the PrecivityAD website says the laboratory-developed test “correctly identified brain amyloid plaque status (as determined by quantitative PET scans) in 86%” of 686 patients, all of whom were older than 60 years of age with subjective cognitive impairment or dementia.
But some Alzheimer’s advocacy groups are tempering their enthusiasm about the breakthrough. Eliezer Masliah, MD, Director of the Division of Neuroscience, National Institute on Aging, told the Associated Press (AP), “I would be cautious about interpreting any of these things,” he said of the company’s claims. “We’re encouraged, we’re interested, we’re funding this work, but we want to see results.”
Heather Snyder, PhD, Vice President, Medical and Scientific Relations at the Alzheimer’s Association told the AP her organization will not endorse a test without FDA clearance. The Alzheimer’s Association also would like to see the test studied in larger and diverse populations. “It’s not quite clear how accurate or generalizable the results are,” she said.
Braunstein defended the decision to make the test for Alzheimer’s immediately available to physicians, asking in the AP article, “Should we be holding that technology back when it could have a big impact on patient care?”
Howard Fillit, MD, Founding Executive Director and Chief Science Officer of the Alzheimer’s Drug Discovery Foundation (ADDF), maintains the first-of-its-kind blood test is an important milestone in Alzheimer’s research. ADDF invested in C₂N’s development of the test.
“Investing in biomarker research has been a core goal for the ADDF because having reliable, accessible, and affordable biomarkers for Alzheimer’s diagnosis is step one in finding drugs to prevent, slow, and even cure the disease,” Fillit said in an ADDF news release.
C₂N is also developing a Brain Health Panel to detect multiple blood-based markers for Alzheimer’s disease that will aid in better disease staging, treatment monitoring, and differential diagnosis.
Second Alzheimer’s Test in Development
Soon medical laboratories may have two different in vitro diagnostic tests for Alzheimer’s disease. On December 2, Fujirebio Diagnostics filed for FDA 510(k) premarket clearance for its Lumipulse G β-Amyloid Ratio (1-42/1-40) test, which looks for biomarkers found in cerebral spinal fluid.
“Accurate and earlier intervention will also facilitate the development of new drug therapies, which are urgently needed as the prevalence of Alzheimer’s disease increases with a rapidly aging population globally,” Fujirebio Diagnostics President and CEO Monte Wiltse said in a news release.
The Lumipulse G β-Amyloid test, which is intended for use in patients aged 50 and over presenting with cognitive impairment, has received CE-marking for use in the European Union.
Clinical laboratory managers will want to keep a close eye on rapidly evolving developments in testing for Alzheimer’s disease. It is the sixth leading cause of death in the United States and any clinical laboratory test that could produce an early and accurate diagnosis of Alzheimer’s Disease would become a valuable tool for physicians who treat patients with the symptoms of Alzheimer’s.
Former CEO Elizabeth Holmes now awaits March 9 court date on federal fraud charges that include reporting false medical laboratory test results on some patients
Clinical laboratory leaders have watched with keen interest the federal criminal proceedings against disgraced Theranos founder and former CEO Elizabeth Holmes, whose blood-testing company lost nearly $1 billion of investors’ money before dissolving in 2018.
In a recent CNBC interview, John Carreyrou, the Wall Street Journal (WSJ) investigative journalist who first broke the Theranos story in 2015, contended that the once-high-flying Silicon Valley startup could have paid back investors on a pro-rata basis, but that the company opted to use its dwindling cash to challenge lawsuits.
“If you rewind to October 2015, when I finished, when I published my first investigative story on Theranos, the company still had $400 million in the bank and it could have called it quits then,” Carreyrou said in the interview. “And Elizabeth Holmes could have apologized to investors, to patients, to everyone she had misled and returned that money to shareholders on a pro-rata basis.”
Theranos Scandal Breaks Wide Open
Carreyrou’s nearly year-long Wall Street Journal investigation into Theranos helped bring down the venture capital darling that had achieved a $9 billion private valuation before crumbling under the weight of fraud allegations. Dark Daily and our sister publication The Dark Report (TDR) covered in detail the allegations against and investigation into the embattled blood test company in dozens of e-briefings and TDR articles starting in 2015.
In fact, The Dark Report was first to publish the news that Theranos had ceased using its finger-stick collection method in Phoenix as early as April 2015. (See TDR, “Theranos: Many Questions, But Very Few Answers,” April 20, 2015.) At that time, Theranos declined to respond to The Dark Report’s requests for comments.
Theranos had built its superstar reputation on the backs of a revolutionary finger-prick blood testing system, which Holmes promised could diagnosis diseases ranging from diabetes to cancer with just a few drops of blood. But an in-depth investigation into hoopla surrounding the company’s breakthrough technology by Carreyrou and other reporters at the Wall Street Journal revealed it was based on false test results and phony claims to investors and companies, such as Walgreens, which had planned to feature the technology in their retail clinics.
In 2016, Theranos received sanctions from the Centers for Medicare and Medicaid Services (CMS), which included revocation of the company’s CLIA certificate and sanctions against Holmes and other company officials that prohibited them from owning or operating a medical laboratory for two years. Soon afterward, Theranos laid off 340 workers, closed its laboratory operations, and shuttered its wellness centers to “focus on an initiative to create miniature medical testing machines,” the New York Times reported.
When Theranos was finally dissolved in September 2018, Carreyrou reported that the company had an estimated $5 million in cash to distribute to unsecured creditors. All told, Carreyrou estimates Theranos’ investors, which included such big names as News Corp Executive Chairman Rupert Murdoch, Bechtel Group Chairman Riley Bechtel, and US Education Secretary Betsy DeVos, lost nearly $1 billion.
Today, Holmes is preparing to stand trial on a dozen federal wire fraud and conspiracy to commit wire fraud charges at the US District Court in San Jose, Calif., where jury selection is slated to start on March 9, 2021, amid COVID-19 pandemic safety precautions.
According to the Mercury News, Holmes faces maximum penalties of 20 years in prison and a $2.75 million fine, plus possible restitution. Carreyrou does not expect Holmes to seek a plea deal.
“I think that the chances of that are pretty unlikely. From what I hear, she’s telling her friends and her entourage that she’s actually looking forward to her day in court and she thinks that the real story—her version of the story—will come out at trial,” he told CNBC. “And so, she’s actually putting on a cheerful face with people she knows, and people have seen her recently and are saying that she’s looking forward to see this go to a jury.”
While the final chapter of this story will be written by a federal court jury, clinical laboratory leaders likely will want Holmes to face maximum penalties if found guilty of all charges. The deceptive scientific and business practices Theranos allegedly engaged in caused many headaches for the clinical lab directors of hospitals and health networks as their CEOs asked why the “cheap and fast” Theranos testing system could not be used instead of traditional, more expensive testing methods.
Theranos also financially damaged investors who might otherwise have gained capital and continued to invest in more credible startups of diagnostic companies and clinical laboratories.