Former CEO also testified that she believed company’s proprietary blood-testing technology could perform ‘any’ clinical laboratory blood test
One relevant question in the federal fraud trial of ex-Theranos CEO Elizabeth Holmes was whether she would testify on her own behalf. That question was answered shortly after the government rested its criminal fraud case against the former Silicon Valley clinical laboratory testing company founder. Holmes took the stand in her own defense, a risk her defense team hopes will pay off in her favor.
During her first three days of testimony leading up to the Thanksgiving holiday break, Holmes—who faces 11 counts of fraud and conspiracy related to her tenure as founder and CEO of Theranos—made headlines by admitting she did personally put the logos of pharmaceutical giants Pfizer and Schering-Plough on reports she sent to Theranos investors and executives at Walgreens and Safeway. She expressed regret for doing so to the jury, but claimed her intent was not to deceive but to give credit to others.
“This work was done in partnership with these companies, and I was trying to convey that,” she testified, according to a trial coverage from Ars Technica.
When asked if she realized that others would assume the pharmaceutical companies—not Theranos—were the authors of the report, Holmes replied, “I’ve heard that testimony in this case, and I wish I’d done it differently.”
If found guilty, Holmes—who once claimed Theranos’ Edison proprietary blood-testing technology would to be able to complete as many as 200 clinical laboratory tests using a single finger-stick of blood—could face maximum penalties of 20 years in prison, a $2.75 million fine, and possible restitution.
Holmes Testifies She Believed the Edison Device Could Perform “Any” Blood Test
In its trail coverage, NPR described Holmes’ first three days of testimony “as having involved deflecting responsibility, pointing to the expertise of the Theranos board of directors, lab staff, and other company employees whom Holmes has suggested were close to how [Theranos’] blood analyzers worked.”
According to Reuters, Holmes’ defense team is arguing that Holmes’ always-rosy forecasts about her company’s technology and finances were based on her belief the proprietary Edison device worked as advertised, which, in turn, was based on feedback from pharmaceutical companies, her own employees, and the military.
During her testimony, Holmes compared a traditional blood-testing device to Theranos’ “3.0” device, which she said would reduce the human-error rate that can occur during blood sampling.
“If we had the ability to automate much of that process, we could reduce the error associated with traditional lab testing,” she told the court.
Reuters reported that Holmes told jurors her confidence in the Theranos device was in part due to how well the unit had performed in studies completed in 2008 and 2009, including those run by drug companies such as Novartis.
The Mercury News described Holmes as speaking with “confidence—and frequently a small smile”—during her opening day of testimony.
Asked by one of her lawyers, “Did you believe that Theranos had developed technology that was capable of performing any blood test?” Holmes responded, “I did.”
Holmes Testifies about Military’s Alleged Use of Edison Device
Prosecutors maintain that Holmes knew Theranos’ proprietary blood-testing technology had serious accuracy issues yet lied about its capabilities and use to lure investors. One of those false claims included allegedly stating the US military was using the Edison device on the battlefield. Earlier in the trial, CNBC reported, prosecution witness Brian Grossman, Chief Investment Officer at PFM Health Sciences, which invested $96 million into Theranos, testified he was told in a 2013 meeting with Holmes and Balwani that Theranos technology was being used in medical-evacuation helicopters.
However, on the witness stand, Holmes described Theranos’ projects with the US military as much more limited in scope than the descriptions outlined by investors testifying for the prosecution.
According to The Wall Street Journal (WSJ), Holmes told jurors a 2010 partnership between Theranos and a US Army Institute of Surgical Research doctor in Texas looked into using the Theranos device to measure blood markers to detect kidney performance. A second project involved the military’s Africa Command, which was determining whether the device could withstand high temperatures. Holmes testified the devices used in Africa “held up well,” though some modifications were needed, and some issues were revealed with the touchscreen.
Should Holmes Have Testified on Her Own Behalf?
Trial experts maintain Holmes’ decision to testify in her own defense could backfire.
“It’s always a risk to put your client on because if they make a mistake they can sink the whole case,” former Santa Clara County prosecutor Steven Clark, JD, told The Mercury News. He added, “what’s at issue here is Elizabeth Holmes’ intent. And the best person to say what Elizabeth Holmes’ intent was is Elizabeth Holmes, and that’s why I think she’s taking the stand. She’s very charismatic. She’s really good on her feet. And I think the jury will like her.
“This is the pitch meeting of her life,” Clark added. “She’s going to be explaining herself to 12 people as to what was in her mind.”
Judge Drops One Count Due to Prosecution Error, Government Rests Its Case
Holmes is now charged with nine counts of wire fraud and two counts of conspiracy to commit wire fraud after the government dropped one count of fraud from the indictment. According to WSJ coverage of the trial, US District Judge Edward Davila blocked a patient named in the indictment as “B.B.” from testifying because of a filing error by the prosecution. The judge’s decision resulted in the government dropping one count.
The government rested its case against Holmes on November 19 following testimony from independent journalist Roger Parloff, who wrote a flattering 2014 Fortune magazine story on Holmes. He later redacted his earlier writing in another Fortune article, titled, “How Theranos Misled Me.”
The government alleged Holmes used media publicity as part of her scheme to defraud investors, patients, and physicians. All totaled, 29 witnesses appeared for the prosecution, the WSJ reported.
Former Theranos Chief Operating Officer Ramesh “Sunny” Balwani—Holmes’ one-time boyfriend—faces similar charges of defrauding patients, investors, and physicians. His trial is expected to begin in January 2022.
Clinical laboratory managers and pathologists who have watched the federal court proceedings with keen interest should expect the trial to wrap up at the conclusion of Holmes’ testimony, just in time for the Balwani fraud trial to begin.
Service uses ‘hub-and-spoke’ routing model to provide rapid delivery of time-and-temperature-sensitive clinical laboratory specimens and supplies
Drone delivery service in healthcare is beginning to take flight both here and abroad, with California-based Matternet launching medical drone delivery networks in Winston-Salem, North Carolina, and Berlin, Germany.
The successful use of unmanned aircraft to deliver patient specimens has major implications for clinical laboratories. When conditions allow them to fly, drones can significantly shorten delivery times of routine patient specimens such as blood and urine.
The drones will fly two routes and carry scheduled deliveries of specialty infusion medicines and personal protective equipment (PPE). Because infusion medicines are patient-specific, high cost, and have a short shelf life, delivery by drone within 10 minutes is an ideal solution, Matternet said in the news release. Individually compounded medicines also will be delivered on-demand for dispensing to patients who need real-time access to treatments.
Matternet has been operating in the US since August 2018. In, “WakeMed Uses Drone to Deliver Patient Specimens,” Dark Daily’s sister publication, The Dark Report, reported how—following a two-year trial period using a quadcopter to deliver patients’ samples from a physicians’ office satellite lab/draw station to the WakeMed Medical Center’s central lab—the North Carolina healthcare system, in partnership with UPSFF, completed the first successful revenue-generating commercial transport of lab supplies by drone in the US at WakeMed’s flagship hospital and campus in Raleigh, N.C.
Bala Ganesh, a Vice President of Engineering at UPS, said UPSFF, which was launched in July 2019, is focused on healthcare deliveries. To make drone deliveries commercially viable, both “criticality” and an industry’s “willingness to pay” are important, he said. “We never looked at delivering pizza,” he told Forbes. UPSFF is the first company to receive the FAA’s Part 135 certification (package delivery by drone).
BVLOS Drone Delivery of Clinical Laboratory Specimens in Europe
Last year, Matternet launched the first beyond-visual-line-of-sight (BVLOS)-operated medical drone network in Europe. Its unmanned aircraft will be flown without the requirement that a pilot always maintain a visual line of sight on the aircraft.
Matternet launched its BVLOS operations at Labor Berlin, Europe’s largest hospital laboratory, which includes facilities in 13 hospitals across Berlin.
“We continue to expand drone delivery operations around the world with a focus on urban environments,” said Andreas Raptopoulos, Matternet Founder and CEO, in a press release. “Hospitals and laboratories in densely populated cities like Berlin need fast and predictable transportation methods that avoid urban congestion. We are thrilled to partner with Labor Berlin and look forward to streamlining their diagnostics work to the benefit of Berlin’s hospitals and residents.”
According to the press release, Matternet’s drone delivery network will transport samples from hospitals to Labor Berlin facilities up to 70% faster than ground courier services, as well as reducing vehicular traffic and emissions in Berlin’s urban core. Currently, more than 15,000 samples are transported daily across Labor Berlin’s healthcare system.
Will Drone Delivery of Clinical Laboratory Specimens Become the New Normal?
“I think that this is the wave of the future,” Atrium Health Senior Vice President Conrad Emmerich, who previously served as Senior Vice President, Business Services, at Wake Forest Baptist Health, told Fox 8 News.
It’s certainly beginning to look as if drone delivery as a viable alternative to traditional transport methods is taking off (pun intended). Since 2017, Dark Daily has published 10 ebriefings on drone delivery systems for healthcare being trailed worldwide.
Since the shortest distance between two points is a straight line, regular transporting of clinical laboratory specimens and supplies by drone could reduce transit times between hospitals and clinical laboratories and lower laboratory specimen transportation costs.
Hospital administrators and medical laboratory executives may want to keep tabs on the expansion of such services into their regions. There may be opportunities to improve clinical outcomes and patient satisfaction.
Occupancy rates at skilled nursing facilities remain well below pre-pandemic levels, a trend that weakens the financial health of nursing homes and means fewer test referrals to clinical laboratories that service them
COVID-19 is taking a financial bite out of the nursing home industry as seniors opt for home care rather than entering nursing facilities. If this trend becomes permanent, clinical laboratories may have to ramp up their ability to collect specimens from a growing population of patients who choose non-traditional healthcare settings. And as the SARS-CoV-2 pandemic stretches on, the exodus of seniors from nursing home facilities provides another example of how COVID-19 is altering consumers’ access to healthcare.
According to the most recent “AARP Nursing Home COVID-19 Dashboard Fact Sheets,” the COVID-19 pandemic “has swept the nation, killing more than 160,000 residents and staff of nursing homes and other long-term care facilities.”
Because COVID-19 has hit nursing home residents the hardest, many families have decided elderly parents may be safer living with relatives than in nursing homes that have proven vulnerable to widespread outbreaks. In addition, COVID-19-related lockdowns in skilled nursing facilities (SNFs) have provided families with additional motivation to choose home care for elderly relatives.
For example, in “Should You Bring Mom Home from Assisted Living During the Pandemic?” retired Seattle physician Alison Webb, MD, told Kaiser Health News (KHN) she moved her 81-year-old father, who has moderate dementia, out of assisted living so he could be with grandchildren and enjoy gardening rather than remain in his senior facility, where COVID-19 protocols kept him sequestered from friends and family.
This is not an isolated example and may have a long-term impact on clinical laboratories that service skilled nursing facilities.
Patient Volume Falls Dramatically at Skilled Nursing Facilities
While hospital discharge rates are rebounding to near pre-pandemic levels, an Avalere Health analysis of Medicare fee-for-service claims found a “more drastic and lasting decline in patient volume” at skilled nursing facilities. In contrast, Avalere found home health has experienced a rebound in patient numbers beginning last May.
“In the early months of the COVID-19 outbreak in the US, we saw a substantial decrease in hospital discharges to both skilled nursing facilities and home health agencies,” said Heather Flynn, Consultant at Avalere, in an Avalere press release. “Hospital discharges are steadily moving back to pre-pandemic levels, but our analysis points to an uneven ‘return to normal’ across care settings.”
“Skilled nursing facility occupancy typically slows in April after an uptick during the flu season, but we haven’t seen anything like this in recent memory,” Kauffman said in an NIC press release which announced nursing home occupancy had dropped to 78.9% last April, 2020, down 5.5% from 2019. “The long-term effect of COVID-19 on skilled nursing occupancy remains to be seen as the industry adjusts to a new normal.”
Since then, the occupancy rate in skilled nursing properties has fallen even further. The latest Skilled Nursing Monthly Report announced a new low of 74.2%.
Will Clinical Laboratories That Service Skilled Nursing Homes Be Affected?
There are signs the nursing home industry may have to contend with home healthcare becoming a permanent competitor for patients. In a news release last spring, the Mayo Clinic announced it was partnering with Medically Home of Boston to launch a virtual hospital-at-home model aimed at delivering “advanced care” from a network of paramedics, nurses, and support team in a home care setting.
The initiative means patients can receive a range of healthcare services in their homes that traditionally required a hospital setting. The services include:
Infusions,
Skilled nursing,
Clinical laboratory and imaging services,
Behavioral health and rehabilitation services.
While the initial program rollout will allow Mayo Clinic to free up ventilators and hospital space for COVID-19 patients, John Halamka, MD, an emergency medicine physician and President of Mayo Clinic Platform, told Modern Healthcare, “Next, we’ll look to forward-thinking organizations who believe like we do in that care should be more convenient and accessible.”
Discharge Doctors Now Choose Home Healthcare Over Skilled Nursing Facilities
Physicians also are embracing home care in greater numbers. As reported in Forbes, a 2020 William Blair survey showed 81% of physicians responsible for discharge planning would send patients to a home health agency rather than a skilled nursing facility. Pre-pandemic, only 54% of discharging physicians expressed a preference for home care, according to the survey.
Greg Chittim, Partner at Health Advances, an international strategy consulting firm headquartered in Boston, points to improvements in virtual technologies as the catalyst for home care’s growth.
“One of the silver linings of COVID-19 is the level of investment we are seeing in virtual care technologies,” Chittim told Forbes. “And beyond the technologies, providers and patients are building that comfort with traditional real-time communication. I think we have moved 10 years ahead in 10 months.”
As the COVID-19 pandemic rolls on and home health initiatives become more commonplace and grow in popularity, clinical laboratory managers may want to develop solutions that assist home healthcare providers with collecting and shipping patient specimens for testing.
Silicon Valley startup is using gene sequencing to identify in the bloodstream free-floating genetic material shed by tumors
There has been plenty of excitement about the new diagnostic technologies designed to identify circulating tumor cells in blood samples. Now, a well-funded Silicon Valley startup has developed a blood test that it says holds promise for detecting early-stage lung and other cancers.
Though experimental, the screening test—which uses gene sequencing to identify in the bloodstream cancer-signaling genetic material shed by tumors—would be a boon for clinical laboratories and health networks. It also could play a role in advancing precision medicine treatments and drug therapies.
GRAIL, a Menlo Park, Calif., life sciences company, presented its initial findings at the 2018 American Society of Clinical Oncology Annual Meeting in Chicago. Its lung cancer data is part of GRAIL’s ongoing Circulating Cell-Free Genome Atlas (CCGA) study, which aims to enroll 15,000 participants and investigate 20 different types of cancers.
“We’re excited that the initial results for the CCGA study show it is possible to detect early-state lung cancer from blood samples using genome sequencing,” said lead study author Geoffrey Oxnard, MD, Dana-Farber Cancer Institute and Associate Professor of Medicine at Harvard Medical School, in a Dana-Farber news release.
“There is an unmet need globally for early-detection tests for lung cancer that can be easily implemented by healthcare systems,” lead study author Geoffrey Oxnard, MD (above), said in the Dana-Farber news release. “These are promising early results and the next steps are to further optimize the assays and validate the results in a larger group of people.” (Photo copyright: Dana-Farber Cancer Institute.)
According to the news release, researchers in this initial analysis explored the ability of three different prototype sequencing assays, each with 98% specificity, to detect lung cancer in blood samples:
Whole-genome bisulfite sequencing (WGBS) detected 41% of early-stage (stage 1-3A) lung cancers and 89% of late-stage (stage 3B-4) lung cancers;
Whole-genome sequencing (WGS) detected 38% of early-stage cancers and 87% of late-stage cancers; and,
Targeted sequencing detected 51% of early-stage cancers and 89% of late-stage cancers.
“The initial results showed that all three assays could detect lung cancer with a low rate of false positives (in which a test indicates a person has cancer when there is no cancer),” the Dana-Farber news release noted.
Identifying Disease Risk Before Symptoms Appear
Screening tests help identify individuals who are not displaying disease symptoms but may be at high risk for developing a disease. GRAIL’s goal is to develop a test with a specificity of 99% or higher. This means no more than one out of 100 people would receive a false-positive.
Otis Brawley, MD, Chief Medical and Scientific Officer at the American Cancer Society, points out that specificity is important when developing a population-based screening test that ultimately would be given to large portions of the general public based on age, medical history, or other factors.
“I am much more concerned about specificity than sensitivity [true positive rate], and [GRAIL] exhibited extremely high specificity,” Brawley told Forbes. “You don’t want a lot of false alarms.”
Some cancer experts have a wait-and-see reaction to GRAIL’s initial results, due in part to the small sample size included in the sub-study. Benjamin Davies, MD, Associate Professor of Urology at the University of Pittsburgh School of Medicine, and an expert on prostate cancer screening, told Forbes the early data was “compelling,” but the number of patients in the study was too small to generate excitement.
Oxnard, however, believes the initial results validate the promise of GRAIL’s blood screening test project.
“I was a skeptic two years ago,” Oxnard, a GRAIL consultant, told Forbes. “I think these data need to put a lot of the skepticism to rest. It can be done. This is proof you can find cancer in the blood, you can find advanced cancer, therefore this has legs. This has a real future. It’s going to be many steps down the line, but this deserves further investigation and should move forward.”
Next Steps
Researchers next plan to verify the initial results in an independent group of 1,000 CCGA participants as part of the same sub-study. They then will attempt to optimize the assays before validating them in a larger data set from CCGA, the Dana-Farber news release explained.
Illumina, a sequencing-technology developer, formed GRAIL in 2016, with participating investments from Bill Gates, Bezos Expeditions and Sutter Hill Ventures. Since then, GRAIL has attracted other high-flying investors, including Amazon, Merck, Johnson and Johnson, and Bristol-Myers Squibb.
Forbes notes that as of 2018 GRAIL has raised $1.6 billion in venture capital and has a $3.2 billion valuation, according to private market data firm Pitchbook. Last year, GRAIL merged with Hong Kong-based Cirina Ltd., a privately held company also focused on the early detection of cancer.
While GRAIL’s projects hold promise, anatomic pathologists and clinical laboratories may be wise to temper their enthusiasm until more research is done.
“We all would like to dream that someday you’d be able to diagnose cancer with a blood test,” Eric Topol, MD, Executive Vice President and Professor of Molecular Medicine at Scripps Research, told Forbes. Topol says he’s “encouraged” by GRAIL’s methodical approach, but warns: “We’re at the earliest stage of that.”
Next step is to design Web portal offering low-cost ‘polygenic risk score’ to people willing to upload genetic data received from DNA testing companies such as 23andMe
Their study, published last month in Nature Genetics, found that a genome analysis called polygenic risk scoring can identify individuals with a high risk of developing one of five potentially deadly diseases:
Polygenic Scoring Predicts Risk of Disease Among General Population
To date, most genetic testing has been “single gene,” focusing on rare mutations in specific genes such as those causing sickle cell disease or cystic fibrosis. This latest research indicates that polygenic predictors could be used to discover heightened risk factors in a much larger portion of the general population, enabling early interventions to prevent disease before other warning signs appear. The ultimate goal of precision medicine.
“We’ve known for long time that there are people out there at high risk for disease based just on their overall genetic variation,” senior author Sekar Kathiresan, MD, co-Director of the Medical and Population Genetics Program at the Broad Institute, and Director, Center for Genomic Medicine at Massachusetts General Hospital, said in a Broad Institute news release. “Now, we’re able to measure that risk using genomic data in a meaningful way. From a public health perspective, we need to identify these higher-risk segments of the population, so we can provide appropriate care.”
“What I foresee is in five years, each person will know this risk number—this ‘polygenic risk score’—similar to the way each person knows his or her cholesterol,” Sekar Kathiresan, MD (above), Co-Director of the Medical and Population Genetics Program at the Broad Institute, and Director, Center for Genomic Medicine at Massachusetts General Hospital, told the Associated Press (AP). He went on to say a high-risk score could lead to people taking other steps to lower their overall risk for specific diseases, while a low-risk score “doesn’t give you a free pass” since an unhealthy lifestyle can lead to disease as well. (Photo copyright: Massachusetts General Hospital.)
The researchers conducted the study using data from more than 400,000 individuals in the United Kingdom Biobank. They created a risk score for coronary artery disease by looking for 6.6 million single-letter genetic changes that are more prevalent in people who have had early heart attacks. Of the individuals in the UK Biobank dataset, 8% were more than three times as likely to develop the disease compared to everyone else, based on their genetic variation.
In absolute terms, only 0.8% of individuals with the very lowest polygenic risk scores had coronary artery disease, compared to 11% for people with the highest scores, the Broad Institute news release stated.
“The results should be eye-opening for cardiologists,” Charles C. Hong, MD, PhD, Director of Cardiovascular Research at the University of Maryland School of Medicine, told the AP. “The only disappointment is that this score applies only to those with European ancestry, so I wonder if similar scores are in the works for the large majority of the world population that is not white.”
In its news release, the Broad Institute noted the need for additional studies to “optimize the algorithms for other ethnic groups.”
The Broad Institute’s results suggest, however, that as many as 25 million people in the United States may be at more than triple the normal risk for coronary artery disease. And millions more may be at similar elevated risk for the other conditions, based on genetic variations alone.
Reanalyzing Data from DNA Testing Companies
The researchers are building a website that would enable users to receive a low-cost polygenic risk score—such as calculating inherited risk score for many common diseases—by reanalyzing data users previously receive from DNA testing companies such as 23andMe.
Kathiresan told Forbes his goal is for the 17 million people who have used genotyping services to submit their data to the web portal he is building. He told the magazine he’s hoping “people will be able to get their polygenic scores for about as much as the cost of a cholesterol test.”
Some Experts Not Impressed with Broad Institute Study
But not all experts believe the Broad Institute/MGH/Harvard Medical School study deserves so much attention. Ali Torkamani, PhD, Director of Genomics and Genome Informatics at the Scripps Research Translational Institute, offered a tepid assessment of the Nature Genetics study.
In an article in GEN that noted polygenic risk scores were receiving “the type of attention reserved for groundbreaking science,” Torkamani said the recent news is “not particularly” a big leap forward in the field of polygenic risk prediction. He described the results as “not a methodological advance or even an unexpected result,” noting his own group had generated similar data for type 2 diabetes in their analysis of the UK dataset.
Nevertheless, Kathiresan is hopeful the study will advance disease treatment and prevention. “Ultimately, this is a new type of genetic risk factor,” he said in the news release. “We envision polygenic risk scores as a way to identify people at high or low risk for a disease, perhaps as early as birth, and then use that information to target interventions—either lifestyle modifications or treatments—to prevent disease.”
This latest research indicates healthcare providers could soon be incorporating polygenic risking scoring into routine clinical care. Not only would doing so mean another step forward in the advancement of precision medicine, but clinical laboratories and pathology groups also would have new tools to help diagnose disease and guide treatment decisions.