Word

A recent letter to the WSJ in response to a Theranos story:

I am a former biotech analyst. Several years ago, the chairman of a client company told me he had seen an interview with Elizabeth Holmes and thought she was terrific and his company would be interested in working with her. He wanted to know what I thought.

Here is what I did: I went to the Theranos website and looked at the management and board of directors. I immediately noticed two red flags: First, the lack of relevant experience in the CEO’s bio, and second, the board appeared to be decorated with famous names unrelated to Theranos’s business.

Next, I called the company and introduced myself to the person who answered the phone. I explained the reason for my call and that I would like to speak to Ms. Holmes or leave her a message. I was told that there was no mechanism by which I could do that or anyone else with whom I could speak. Red flag No. 3.

It took me 10 minutes and cost my client zero dollars. Any life-sciences analyst would have done exactly the same thing and undoubtedly reached a similar conclusion. No rocket science here. So pardon my skepticism at senior members of corporations testifying as to how much money they spent on due diligence. Perhaps it’s time for their shareholders to make a change.

Elizabeth Silverman

Prism Biomedical Research

New York

2 Replies to “Word”

  1. It’ll be fun to see whatever documentary/podcast/biopic comes out of the trial, which is nine weeks in and still going.

    Prosecution: she defrauded us by lying
    Defense: your due diligence is knowing she’s lying

    Schering-Plough and Pfizer detected enough obfuscation, vagueness, and deflection to stay away from a partnership. They’re looking pretty smart now.

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