An interesting May 2005 interview with Elizabeth Holmes, founder of the mysterious Theranos. Original audio here.
Dr. Moira Gunn: This is the Tech Nation Podcast from IT Conversations. The world we know is changing. This is BioTech Nation.
Dr. Moira Gunn: The Center for Drug Evaluation and Research at the FDA has just reported that in 2004, over 400,000 Americans reported adverse drug reactions, and 100,000 Americans died. On the benign side, other research shows that 40% to 60% of all patients don’t benefit from the drugs they’re prescribed. I asked Elizabeth Holmes, the President and CEO of Theranos: why can’t we figure out who will have an adverse drug reaction, and why certain drugs aren’t going to work?
Elizabeth Holmes: I think that part of it has to do with the fact that there is no mechanism in place to deal with monitoring patients on an individualized basis today. When we began Theranos, what we focused on was creating a customized medicine tool that could be used in the home by every patient. So that every day, a patient can get real time analysis of their blood samples, and look at not only how drugs are reacting in their body, but how other metabolic or physical factors contributed to how well a given drug works in them as an individual.
This is different from the traditional process of sending a patient into a clinic at random time points, trying to get a sample of their blood and then analyzing, at that second in time, what the drug is doing. Because it gives you a much better and much more complete understanding of all of the factors that contribute to how well a drug works or does not work. Like if the patient’s taking other drugs, which happen to cross interact. So, the ability to begin bringing monitoring, as we call it, into the home, we believe could fundamentally change the way that both patients are treated as well as drugs are developed.
Dr. Moira Gunn: I guess right now it’s called the RDX Metabolic Profiler?
Elizabeth Holmes: That’s absolutely right.
Dr. Moira Gunn: Well, we’ll get those marketing people on that. I think it may be called something else by the end, something handy by the end. Now tell us, exactly how big is it? What does it do? What do you got to do if you’re using it?
Elizabeth Holmes: So, it’s a handheld device and it’s fully integrated. The only thing you have to do is hold your finger, or you could actually use any part of your hand or your arm, up toward the device and it takes a very small sample of blood. So small that you can barely feel it. Thanks to the art of glucose monitoring, small blood sampling has really …
Dr. Moira Gunn: So it extracts a little from your hand?
Elizabeth Holmes: Exactly. It’s a little tiny needle that pulls a little tiny drop of blood, and when it gets the drop of blood, basically it runs it through, what we call, a biochip which separates out all the cells and other types of analytes in your blood which could traditionally clog a biosensor. And then, in real time it runs many different chemistries. Looking for different, in this case, targeted markers. Like the drug concentration, or concentrations of other proteins that may be in your blood that are indicative of either risk…
Dr. Moira Gunn: Adverse drug reaction.
Elizabeth Holmes: Exactly.
Dr. Moira Gunn: Okay, so once it … identifies that? What does it do? Just tell you?
Elizabeth Holmes: So, when you do that-
Dr. Moira Gunn: It has a big screen that says, “Sit down”?
Elizabeth Holmes: No. The patient doesn’t see anything. It’s a very small handheld device. So once the device begins working, it’s a real time event in which the blood sample is analyzed. When it separates all the cells out and it identifies the markers it’s looking for, the first that happens is you get a signal. It’s basically reflective of a concentration, or the presence or absence of certain cells you may be looking for.
And when that happens, the electronic aspect of the device takes hold and transmits that data to our website. Where we’ve written what is basically biostatistics algorithms to correlate that information, and profile it. So, we’re actually in the process of redesigning our websites, so that patients and physicians can log in, and a nurse can monitor this data and then say to the patient, “You know, you’re fine.”
Again, the backdrop to all of this is, when a drug is prescribed, we are coupling the system with the drug. So if you know, when you go to get a drug, that you have risk of an adverse event, or you’re not sure, or you’re nervous about it, you can monitor yourself for a month, and then evaluate whether or not that drug is the best drug for you.
Dr. Moira Gunn: Okay. I got to ask it, does it hurt to have the drop of blood extracted?
Elizabeth Holmes: I can tell you, personally, I hate needles. They make me want to faint, and I am fine doing with doing this drop of blood. We’re talking really really small. You can barely see it. If you poke yourself in the arm or on the palm of your hand, it doesn’t hurt as much as if you do it on the fingertip, because there’s many nerves in your fingertip. So it’s more of a pain site, whereas your arm has thicker skin. So you actually get an even smaller drop of blood out, but you don’t hit the nerves that make you feel pain.
Dr. Moira Gunn: And you’ve got plenty of blood to do your assay.
Elizabeth Holmes: Oh yeah. Absolutely. That’s the beauty of the technology, is that we’re really talking about miniaturization.
Dr. Moira Gunn: Now a lot of people are saying, “Well she’s President and CEO. Where are all the engineers that built this?” This is built around your patent.
Elizabeth Holmes: Yeah. That’s true. Part of the culture of our company is to make sure that we are fully integrated, so people who are working on business development and people who are working on marketing, everything, revolves around the engineering aspects and the technology aspects. And continually striving to be, really, the leader in creating an industry around these personalized monitoring systems.
So, yes, I am actively involved in the technology and the technology did come from… sort of an integration of work I’ve done in different technical fields. And the concept that if you could bring different technologies together, you could maximize the power behind them. I think it’s very clear that this is a wonderful time for the convergence of the electronic and IT infrastructure with biosystems. In our case, it’s to create biosensors.
Dr. Moira Gunn: If this is a job interview I couldn’t ask you, but I can ask you. And it’s the radio, so people are surprised. How old are you Elizabeth?
Elizabeth Holmes: I’m 21.
Dr. Moira Gunn: You’re 21.
Elizabeth Holmes: Yes.
Dr. Moira Gunn: So, you were at Stanford. What were you studying there?
Elizabeth Holmes: I was studying Chemical Engineering, but I was also involved with Electrical Engineering, and with some biosensing projects.
Dr. Moira Gunn: Okay, so you were doing all this. Did you actually build a new technology while you were there? Or did you drop out to do that?
Elizabeth Holmes: I actually did build other new technologies while I was there. I was working on a project for a major pharmaceutical company, a wireless biosensor. And I was working on another microfluidic project, basically dealing with fluids in very small volumes, which is relevant to what we’re doing now.
I actually left Stanford to go work in Singapore. Background on, I guess, story of my life. I have been studying Mandarin for a long time and have spend some time studying in China. I wanted to go back to Asia, but was interested in biotech. And so I went to Singapore, because there’s a tremendous amount of resources that are being poured into research there. I got the opportunity to help develop a novel approach in microarray, and was looking at that technology and thinking about the type of sensors I’ve built at Stanford. And realizing that if you could integrate the ability to do high-throughput screening, meaning the detection of many different types of markers into a little titanium chip like the ones that we had expertise building here… you would really have a powerful sensor, and truly a platform with respect to the ability to say, “Look, we’re going to work toward monitoring anything, anytime.”
Dr. Moira Gunn: What’s the status of the device today? Is it still just a prototype? Where are you?
Elizabeth Holmes: Okay. Our first applications are actually in monitoring acute pain killers. And that device is going into the production phase. We hope to release it, actually, to a pharmaceutical partner around mid to late this year.
Dr. Moira Gunn: So you’re almost there. You’re almost in manufacture.
Elizabeth Holmes: Oh, absolutely. I think it’s a iterative process, because what we look at is the ability to monitor different things just based on changing this little cartridge that slides into your handheld readers. We’ve got the reader, now we’re developing a series of different cartridges for different purposes.
Dr. Moira Gunn: Now, how much money have you raised thus far in venture capital funds?
Elizabeth Holmes: So, in venture capital funds we raised just over 6 million, and then we’ve also raised money from private investors.
Dr. Moira Gunn: Okay, and you’re 21?
Elizabeth Holmes: Yes.
Dr. Moira Gunn: Okay. I’m going to tell my 2 children they better get off their duffs, Elizabeth. I have one more question for left for you.
Elizabeth Holmes: Absolutely.
Dr. Moira Gunn: What are you going to do when you’re 30?
Elizabeth Holmes: This. We have ideas, and actually the way that we structured our company is to build what we call an innovation division. And already, we have next generations of this product in prototype form in-house. And that’s with respect to miniaturizing the system to make it faster. To make it more high-throughput. To put it into all sorts of different types of devices that can take use to the point where this is automated. and you don’t even have to touch your finger on the device.
Dr. Moira Gunn: No pain. Elizabeth this-
Elizabeth Holmes: No pain.
Dr. Moira Gunn: No pain.
Elizabeth Holmes: That’s the objective.
Dr. Moira Gunn: This has been terrific Elizabeth. Come back and see us anytime, and we really look forward to seeing you.
Elizabeth Holmes: All right. Thank you so much.
Dr. Moira Gunn: Elizabeth Holmes is the President and CEO of Theranos. For BioTech Nation I’m Moira Gunn. You’ve been listening to TechNation podcast from IT Conversations. For more information visit our websites at technation.com and itconversations.com. I’m Moira Gunn. Thanks for listening.
The Rationalist Conspiracy 
What is the point of quoting this decade old interview? Is the point that Theranos has not pursued this application? There are lots of obvious applications of cheap testing, but instead of pursuing them, Theranos appears to have only pursued the existing market, undercutting prices and making it less painful for the patient.
The obvious guess is regulation. Indeed, Theranos is less regulated than the technology it competes against. Devices for performing medical tests sold to Qwest are regulated, but Theranos’s vertical integration, only selling lab results, allows it to avoid the FDA. Another possibility is trade secrets, which preclude widely distributing devices.
Actually, Theranos has done two things in the direction of home testing. One is that it produced an FDA-approved at-home herpes test. Probably it is easier to get approval to cut the doctor out of the loop for this application because of embarrassment. The more interesting development is that it convinced the Arizona legislature to allow a wide range of blood tests without a doctor’s order. But these are still administered by having the blood drawn at a clinic and the test administered at a third site. This is a legal innovation, the opposite of the dream in the interview, a technical innovation under control of a doctor.