SCRIPT FOR THERANOS SCANDAL

2015.

February 2015: A Medical Journal Editorial Criticizes

Theranos For Operating Secretly
John P.A. Ioannidis, a professor with the Stanford School of Medicine, published an editorial
in The Journal of the American Medical Association excoriating Theranos for its secrecy.
Ioannidis noted that, although Theranos received coverage from major publications such as
The Wall Street Journal, Business Insider, and Silicon Valley Business Journal, the company
hadn't published any "peer-reviewed biomedical literature."

Holmes countered the criticism by claiming the company operated privately to protect its
technology from competitors.
A piece in The Journal of the American Medical Association, penned by John P.A. Ioannidis,
MD, DSc, criticizes Theranos for having operated in “stealth mode” for years without
publishing research in peer-reviewed medical journals.

The same year, Capital BlueCross, central Pennsylvania’s largest health insurer with over
700,000 consumers, selects Theranos as its lab and bloodwork provider. At this time, the
company reaches a $10 billion valuation.

In an editorial in The Journal of the American Medical Association,

a Stanford School of Medicine professor criticizes the company for
operating in “stealth mode for more than a decade” in order to
“change the entire health system” without publishing anything in
peer-reviewed biomedical journals.

July 2015: Theranos Receives FDA Approval For Its Herpes

Detection Test
In 2015, the FDA approved Theranos's test for the herpes simplex virus 1 infection. Though
Theranos had received criticism for its secrecy, the FDA's approval lent the company
legitimacy. A Theranos press release extended the approval of one blood test to an
endorsement of the company's technology in its entirety:

[The FDA's approval] provides independent validation of Theranos's

patented finger stick and... blood testing technology and the
groundbreaking Theranos System upon which the [herpes] test is run.

Theranos’s test for detecting herpes simplex virus 1 is

approved by the Federal Drug Administration (FDA). But by
December, the test has come under scrutiny. This is the only
Theranos test to be approved by the FDA.

July 2, 2015: In what seems like a definitive shushing to critics,

Theranos gets clearance from the FDA for its HSV-1 test. This is a
milestone moment for the company, as some of its technology is
validated by the government — and its so-called trade secrets are made
public.
July 16, 2015: Theranos gets a CLIA waiver from the FDA, allowing it to
run its devices outside a laboratory. The company plans to bring its
devices to wellness centers as well as physicians offices and hospitals —
decentralizing the lab testing process for the company. The Food and
Drug Administration released inspection documents Tuesday that are
critical of lab startup Theranos' device classifications, internal
recordkeeping and lab protocols.

October 15, 2015: A 'WSJ' Investigative Report Questions

Theranos's Technology
A 2015 front-page report from The Wall Street Journal accused Theranos of performing only
15 to 20 of their over 200 advertised finger-stick blood tests with the Theranos device - the
rest were performed on commonly used machines, such as the Siemens AG. Additionally,
the blood placed into the Siemens machines was diluted from a finger stick, which likely
provided inaccurate results.

Theranos responded by firmly denying the allegations:

[The story is] factually and scientifically erroneous and grounded in

baseless assertions by inexperienced and disgruntled former employees
and industry incumbents... We are disappointed that... this reporter relied
only on the views of four "anonymous" disgruntled former employees,
competitors, and their allies, instead of reaching out to many of the
scientific, health care, and business leaders who have actually seen, tested,
used, and examined our breakthrough technologies.
: John Carreyrou of the Wall Street Journal publishes his deeply critical piece of Theranos.
He speaks with several former employees, and finds that not only is the company
mismanaged — but that it’s been overselling the efficacy of Edison. Rather, Carreyrou’s
sources say that many of the diagnostics tests are actually run on standard lab equipment –
and Theranos simply dilutes the samples so as to use that single drop of blood. Holmes
attempts to refute Carreyrou’s piece by making several appearances in the media, saying she
was “shocked” by the accusations.

The Wall Street Journal ran a scathing article criticizing Theranos. Based on
interviews with ex-employees, the newspaper alleged rampant management
incompetence and claimed that Theranos had grossly exaggerated the
capabilities of its proprietary technology. One former senior employee stated
that only a small fraction of all the tests were conducted on the "Edison
machines," and the majority of tests were handled on competitors’ equipment
despite Theranos’s claims to the contrary. If true, this would have been a
violation of the U.S. Food and Drug Administration (FDA) rules.

Holmes appeared on "Mad Money" and other media outlets to do damage

control. She was “shocked” by the Wall Street Journal article and claimed that
Theranos supplied over 1,000 pages of documentation to refute the
allegations. The Wall Street Journal stood by its reporting.

October 15 & 16, 2015: The WSJ publishes a damning report

on Theranos

Things take a turn for Theranos after The Wall Street Journal publishes John
Carreyrou’s in-depth exposé on the company. In the piece, Carreyrou interviews ex-
employees who claim management is incompetent, has exaggerated the capability
of the technology, and is deceiving the public.

Later that day, Holmes appears on Mad Money in an attempt to do damage control
in the face of rampant accusations. She claims the statements in the WSJ are false,
that Theranos had supplied over 1,000 pages of documentation that disprove the
allegations, and that she is disappointed to see that the piece has been published.
Holmes says: "This is what happens when you work to change things. First, they
think you're crazy, then they fight you, and then all of a sudden you change the
world."

In October 2015, this scrutiny came to a head when The Wall Street Journal
published a revealing report on the company. Ex-employees provided testimonies
that Theranos management was incompetent and was deceiving the company by
overstating the capabilities of the testing technology.

Holmes responded to these allegations with strident denials, providing more than
1,000 documents in an attempt to disprove The Wall Street Journal’s narrative.

At the time, she said “This is what happens when you work to change things. First,
they think you’re crazy, then they fight you, and then all of a sudden you change
the world.”

However, The Wall Street Journal was not about to let up. One day after its initial
release, the news source followed up with a report that Theranos used an
unapproved nanotainer for its blood tests but was ordered to cease this behavior. A
nanotainer is a small vial used to collect blood.

On October 16, one day after its initial bombshell, the WSJ releases a follow-up
piece that reports Theranos has been forced to cease use of its unapproved
nanotainer for all of its blood tests, except for one. The Wall Street Journal also
stands by its reporting.
October 16, 2015: Theranos stops collecting blood samples using its proprietary
“nanotainers,” thanks to questions from the FDA

A follow-up article in the Wall Street Journal stated that Theranos was forced
to suspend the use of its unapproved nanotainer for all but one type of blood
test..

October 27, 2015: An FDA Report Calls Theranos’s

Technology An ‘Uncleared Medical Device’
In October 2015, just over ten days after the FDA announced it was investigating Theranos's
nanotainer technology, they released a report in which they referred to the nanotainer as an
"uncleared medical device."

Theranos shipped the nanotainer under Class I, a low-risk class subject to little federal
scrutiny. The FDA stated the technology should have been shipped under a class subject to
more stringent federal regulations.

The FDA released two partially-redacted Form 483 reports from an

ongoing investigation into Theranos. The reports were less than
favorable and claimed that Theranos had "uncleared medical device(s),"
poor records, was mishandling complaints, and had failed to conduct
audits and produce supplier qualifications. In regard to an unspecified
medical device, an investigator noted "the design was not validated
under actual or simulated use conditions." Further, Theranos failed to
“ensure the device conforms to defined user needs and intended uses.”:
The FDA releases Theranos inspection reports that are critical of its
nanotainer and Edison technology.
Shortly after the exposé, the FDA released a report of its ongoing investigation into
Theranos equipment. The report stated that the company used “uncleared medical
device” that was “not validated under actual or simulated use conditions.”

November 2015: A Proposed Safeway-Theranos

Partnership Disintegrates
Theranos and Safeway - an American supermarket chain - entered into a $350 million
agreement, but it dissolved when executives raised concerns about the accuracy of
Theranos's testing. One executive received erroneous results indicating that he had prostate
cancer.

Theranos called The Wall Street Journal's reporting on the matter inaccurate and
defamatory.
A $350 million deal with Safeway fizzled out after Theranos failed to
meet key deadlines for rollouts and Safeway executives questioned the
validity of the test results
A $350 million deal with Safeway falls through, as reported by the
WSJ. The partnership would have allowed Theranos to offer tests in
more than 800 supermarkets. Though Safeway has spent money to
build the clinics, the tests never begin.

December 27, 2015: The Wall Street Journal ran another article alleging
management ineptitude at Theranos and test rigging to produce better
results for its Edison machines.