Anyone reading the business press over the last 20 years is familiar with the terms 'disruptive innovation' or 'disruptive technology.' These were introduced in 1995 by Clayton Christensen of the Harvard Business School, who rose to guru status as a result. At my first Christensen talk, the primary example came from the disk drive industry, as the format and capacity advanced every few years while cost declined, leaving many slow deciders in the dust. It all seemed so logical after the fact, a form of Monday morning quarterbacking. Research at business schools is quite different from the research we life scientists are used to in our labs; it often attempts to explain the secrets of success or how the blindsided naively failed.
Once a term enters the business school jargon, it spreads well beyond its original intent. Science and business do have that feature in common. We all love our paradigm shifts, omics, nano, strategic plans, business models and how they all come together out of the box at the end of the day. Then the next day we pivot. Disruptive innovation has been suggested as a justification for investment. Some of these gambles, like a new drug candidate, may pay off. We want to catch the wave before it hits the beach. There have been many examples, but none in recent years has gotten the attention of Theranos. If no publicity is bad publicity, Theranos has visibly thrived like none other in the last three months. What happened?
The company had operated in a submarine fashion for a number of years, presumably to advance its confidential disruptive technology in the in-vitro diagnostics (IVD) market widely projected to grow to $75 billion by 2020. (Note that such projections have credibility only slightly higher than the promises of a presidential candidate.) Theranos came out of the closet late, years into its mission, and then announced a disruptive business model whereby they would take clinical chemistry to the retail setting. The stated goals included overcoming a human aversion to providing blood samples, dramatically reducing IVD pricing and improving turnaround time as a result. Most compelling was the promise of a huge menu of tests available, simultaneously, on a drop of finger prick blood collected in a “nanotainer” vial. There’s that word nano again. Less pain, reduced cost, fast drop-in service at a pharmacy or grocery store and fast data were combined for an apparent disruptive tsunami. The traditional clinical laboratory service providers as well as the instrument companies were thus at risk from the combination of novel measurement instrumentation and a novel service model.
Theranos was stubbornly reluctant to describe in detail how these objectives would be accomplished. Thus, IVD professionals quickly had their doubts. For one thing, it’s all about the data and its reliability to support a medical decision. Nothing was revealed, nothing was published comparing Theranos data with accepted standards. Other concerns were evident. Most of us actually have no problem providing a blood sample in the traditional way, and we have plenty to provide. Most of us also lack the sophistication to interpret numerical clinical chemistry results even if valid. It is well known that finger-stick blood does not reliably have the same composition as venous blood. The thought of carrying out 100 quantitative tests on a few microliters of blood is an attractive goal, but is not yet achievable with known peer-reviewed science.
Theranos hid its technology under CLIA (Clinical Laboratory Improvement Act) and LDT (Laboratory Developed Test) formalities not quite designed for this combination of circumstances. Aphorisms that come to mind: “What appears to be too good to be true, often is not true.” “Oh, what a tangled web we weave when first we practice to deceive.” “Theory guides, experiment decides.” “A sucker is born every day.” “Where there’s a will, there’s a way, but biology is less cooperative than most challenges.” Many of us began to ask questions. Employees were sworn to secrecy, but information finds freedom and the press got to snooping.
While the company is private, and likely wishes today they were even more private, purportedly $400 million was raised on the disruptive dream, and the valuation was said to be in the $9-billion range. Theranos had a board of senior people with global reach, but with no known experience as bioanalytical chemists. I’ve not yet been secretary of state or a four-star military man, but one thing I do know is how challenging it is to get good data on the concentration of anything in a blood sample. Consider all the tales of disruptive wearable devices which inspire imagination, but these are not presently capable of valid chemical measurements. Counting steps and heart rate is not diagnostic chemistry and should not hint at the same. Glucose meters are widely cited as exemplary of the future, but blood glucose concentrations are in the mg/mL range and those meters display at least one digit that has no meaning. They save lives and are fit for purpose, but are not representative of what is needed on a regular basis for any other known analyte. Bedside critical care chemistry devices are well developed, but are priced in the $10,000 range and the cost per test is rather high. That’s a completely different environment vs. walking into a local pharmacy. A thought to keep in mind: A bad number in clinical chemistry can be worse than no number at all. Nano, fast, cheap, convenient do not compensate for wrong.
I’m rooting for Theranos to go back into their cave and make their undefined microfluidics technology deliver good numbers. Show me the validated data vs. the proven instruments from Roche, Siemens, Abbott, et al. and I’m all in. Until that data sees the light of day, the fact that the Theranos CEO is “incredibly confident in the data” is not sufficient.