Vilified start-up Theranos seeks second chance at Philly conference

Elizabeth Holmes, founder and CEO of the once-celebrated biotech start-up Theranos Inc., came to Philadelphia on Monday with a mission.

Scrutinized by government regulators and derided by her scientific peers, Holmes, 32, was attempting to redeem herself and restore faith in a blood-testing pioneer once valued at $9 billion until it plummeted amid investigations, accusations, and litigation.

Before a skeptical audience at the American Association for Clinical Chemistry's conference at the Convention Center, Holmes unveiled what she said was an entirely new blood-testing device. Dubbed "miniLab," the black box is designed to be portable at about 18 inches tall.

Described as a miniature laboratory in a box, it can run tests that include hematology, immunology, and clinical chemistry, she said. She did not address the fiasco that erupted last year when results purportedly generated by a previous Theranos machine were found to be unreliable.

"It's the beginning of the next phase of the company as we introduce our new technologies to the world," she told a crowd of at least 2,500. "We'll also be working with academic institutions and other parties to validate and publish our results."

Though she did not bring one of the new miniLabs to the stage, she showed video of the device in action.

A palm-size cartridge loaded with tiny vials of blood was inserted through a small door on the front of the miniLab. A small robotic arm inside pulled out the vials and placed them in a centrifuge, or ran them through advanced optical devices.

Theranos has submitted its testing protocols for the Zika and Ebola viruses to the U.S. Food and Drug Administration, and is awaiting a peer-reviewed medical journal's verdict on miniLab, she said. She displayed preliminary data showing impressive accuracy for the new device, but none of it was independently validated.

That sparked a series of questions from scientists in the audience in a session after her presentation, with every expression of doubt winning applause from the crowd.

Holmes said she created Theranos with a mission of providing cheap and accessible tests with only a few drops of blood.

"We will work as hard as it takes to realize this vision," she told the scientists assembled for the program. "I'm incredibly grateful for the opportunity to speak today and introduce our technologies."

The demonstration was a major departure for Holmes, who generally has operated away from public scrutiny.

Last October, the Wall Street Journal series on Theranos' earlier "black box" testing device, code-named Edison, triggered ongoing criminal investigations by federal authorities looking at whether investors and regulators were misled by the company. Holmes has been banned for two years from operating any blood-testing facility.

The miniLab, in development for about five years, can do more than Edison, which has been taken out of production, Holmes said. The device works in concert with a central computing facility at the company's Silicon Valley headquarters, where the information is processed and analyzed.

Even if miniLab turns out to be all that Holmes claimed on Monday, whether she can turn around the fortunes of the company remains unclear.

In addition to her two-year ban, her business alliances with the likes of Walgreens, Capital BlueCross, Pfizer and GlaxoSmithKline have collapsed.

A probe by the Centers for Medicare and Medicaid Services (CMS) slammed Theranos' main lab in Newark, Calif., saying it posed "immediate jeopardy to patient health and safety." CMS ordered Theranos to stop testing blood there and imposed hefty fines.

The company initially disputed the CMS findings, but in May voided two years of blood-testing results, according to the Journal.

Once considered a story of Silicon Valley success, the Theranos saga is now held up as a cautionary tale so extraordinary, it's literally Hollywood material. Jennifer Lawrence has signed to star as Holmes in Bad Blood, directed and written by The Big Short's Adam McKay.

Holmes founded Theranos as a 19-year-old chemical engineering student who dropped out of Stanford University with the intention of transforming the $75 billion blood-testing industry.

For more than a decade, Holmes built the company quietly, giving no interviews and not making Edison available for peer review.

Yet the promise of Theranos lured millions of dollars in capital, and attracted to its board former Secretaries of State Henry Kissinger and George Schultz; former U.S. Sens. Sam Nunn and Bill Frist; the chair of the Bechtel Group, Riley Bechtel; and a former head of the Centers for Disease Control and Prevention, William Foege.

Holmes created a stir at AACC, Philadelphia's biggest meeting this year aside from the Democratic National Convention, before she even got there.

Eleftherios P. Diamandis, the head of clinical biochemistry at Mount Sinai Hospital in Toronto, said he protested when the AACC invited Holmes to make a presentation.

"Even though she is banned from operating a lab, she is going to tell us how to operate a lab," said Diamandis, who first expressed doubts about Theranos' scientific claims in late 2014. "Of course I want to see the technology put into action, but I remain skeptical."

samwood@phillynews.com

215-854-2796@samwoodiii