Wall Street Journal reporter John Carreyrou discusses his investigative reporting on Elizabeth Holmes’ troubled biotech startup Theranos

In episode 617 of “This Week in Startups,” Jason discusses a topic that’s come up frequently on the show: Theranos. Only this time he’s joined by someone very close to the story, Wall Street Journal reporter John Carreyrou. Carreyrou’s first expose on the company last fall drew a lot of ire from Theranos founder Elizabeth Holmes, but his continued reporting has only brought more issues to light. These are five of his biggest findings about the troubled biotech startup.

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1. Business partners and government agencies have “grave” concerns about the tech
John catches Jason and the audience up on the latest break in his ongoing Theranos series for The Wall Street Journal. The company’s business partner Walgreens recently announced it was closing its Theranos Wellness Center in Palo Alto and suspending Theranos’s access to any patient samples collected at any Walgreens store. But the catalyst for this decision may be more revealing. Walgreens was spurred by a letter The Centers for Medicare & Medicaid Services sent Theranos outlining “grave” concerns about its methods and technology. That center is a federal agency within the U.S. Department of Health and Human Services, so now the company has at least two government critics.

2. The credentials of the board are questionable
Jason asks John if he found the original members of the Theranos board of directors unusual, given the volume of older male politicians like Henry Kissinger. John agrees that it’s never a good sign when only two of your members, William H. Frist and William H. Foege, have any ties to medicine or biotech — and that even those two are hardly active in those fields. (The board has since shrunk to five directors.)

3. Elizabeth’s credentials are also questionable
Elizabeth Holmes’s backstory is frequently compared to Mark Zuckerberg’s, since she dropped out of Stanford as a sophomore to start her company. But Jason and John think that story should be alarming if you’re not coding a social media site. “Any scientist will tell you that this is a field where you need to get your training,” John says. “You can’t make a contribution without attending the classes and then doing the work. As one person put it to me, there’s a reason that Nobel-winning scientists win their Nobels in their late ’50s. It takes that long to achieve break-throughs.”

4. The story isn’t over, because Theranos has capital to burn
While John has exposed several problems within Theranos, he doesn’t think the story ends with Walgreens’s suspension. Theranos might not be worth its $9 billion valuation, but John has confirmed the company has at least several hundred million to its name, and, as he points out, it takes time to burn that kind of cash.

5. The key lies in the “Edison machine”
Theranos analyzes blood samples through its revolutionary “Edison machines”…. which no one outside the company has ever seen. So could Theranos decisively answer critics’ questions if it pulled back the curtain on these gadgets? “If the company were to — as it said it would — allow journalists and scientists to come in and open the innards of this machine, I think people who are well-versed in that technology would be able to quickly ascertain whether this machine can work or not,” John says. Still, he worries the entire lab cited by the Centers for Medicare & Medicaid Services (not just the machines inside them) demands closer scrutiny.

2:41–6:00: Jason asks John when he became aware of issues at Theranos, and how his first article on the company came together

6:01–9:22: John shares the latest breaking news in the Theranos story, concerning its pharmacy partner Walgreens

9:23–10:33: John explains an important letter from a government agency concerning “grave infractions” within Theranos.

13:21–17:54: Is the Walgreens-Theranos partnership completely done? John isn’t sure, but his sources have some interesting information on that contract.

18:04–21:15: Jason asks John when he knew this was an important story, and how he convinced the Wall Street Journal to run with this.

23:43–27:33: Jason and John discuss senior Theranos scientist Ian Gibbons’ tragic fate.

27:43–29:41: Is Gibbons’ death relevant to the Theranos narrative? John details his interview with Gibbons’ widow.

33:32–36:25: Jason and John talk about Theranos investors. Why did they invest without being able to see the technology? Do they all just share Tim Draper’s views?

36:26–40:08: Jason asks John about Elizabeth Holmes’ odd choices for her board of directors.

40:10–43:02: Does Theranos need to discuss relationships between executives? Jason and John dig into the rumors about Elizabeth and Sunny Balwani.

44:21–46:01: John says Theranos still hasn’t made good on its offer to release data to journalists, or sought to have its technology peer-reviewed.

46:53–48:35: Jason asks John about his sources for his Theranos stories.

48:37–50:28: What does John think of the conspiracy theory that jealous competitors are fueling the Theranos scandal?

50:38–54:04: Jason asks John about investigative journalism in 2016.

57:37–59:37: Jason wonders where the class-action lawsuits from consumers are, and when we can expect them.

59:38–1:01:10: John explains why it will be hard to unseat Elizabeth from her position of power in the company.

1:02:07–1:04:11: Is Elizabeth’s behavior deranged or at least unusual? Jason thinks so.

1:04:14–1:06:50: Jason and John analyze Elizabeth’s erratic Twitter activity.

1:07:58–1:10:49: Jason asks John if there’s still a chance Elizabeth could come out and prove everyone wrong.

1:14:26–1:16:32: Jason discusses the college dropout genius archetype, and how Elizabeth doesn’t fit it as neatly as Mark Zuckerberg.

1:19:18–1:23:07: Will the scientists at Theranos leave, and where will they go? Jason says we have to follow the talent.

1:24:30–1:26:02: Jason asks John if we’re coming to the end of this story, and how it will continue to play out.

1:31:08–1:33:28: Jason wonders how people leak information to the public and press in situations like these.

1:33:30–1:36:28: Jason and John discuss Theranos’s fabled Edison machine, and how it’s the key to their ultimate success or failure.

— Kristin Hunt, TWiST archivist
Kristin Hunt is a freelance writer based in New York