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A biotech company’s blood test proves too good to be true

Bad Blood: Secrets and Lies in a Silicon Valley Startup

John Carreyrou
352 pp.
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In the opening pages of Bad Blood, the chief financial officer for the blood-testing company Theranos meets with his boss, Elizabeth Holmes, a charismatic 20-something Stanford University dropout, and warns her that the company must stop lying to its investors. Holmes’s expression turns icy. She informs him that he’s not a team player. Then she fires him on the spot.

Variations on this story recur throughout this engrossing new book by John Carreyrou, the Wall Street Journal reporter whose articles—guided by dozens of frightened but determined sources—brought down Theranos. The fraud that fooled everyone from Walgreens to U.S. statesmen is almost too fantastical to be believed. Holmes, vindictive and paranoid, and the company’s number two, Ramesh “Sunny” Balwani, a bully almost 20 years her senior with whom she was in a romantic relationship, are pitted against employees frantic that patients will be harmed by a technology that doesn’t work.

Holmes dreamed up Theranos in 2004, while at Stanford. She had recently completed an internship at the Genome Institute of Singapore, where she tested patient samples for the severe acute respiratory syndrome (SARS) virus that had devastated Asia. Determined to transform the clunky testing technology, Holmes imagined an arm patch that would diagnose and treat medical conditions. This morphed into Theranos testing devices, which she claimed could run hundreds of tests on a few drops of blood.

It was a remarkable idea. There was just one problem: Scientists and engineers at Theranos couldn’t produce reliable results, at least not in the time frame demanded. That didn’t stop Holmes and Balwani from raking in hundreds of millions of investor dollars or from deploying the error-prone machines for use on unsuspecting patients.

Venture capitalists—particularly ones less familiar with medical technologies—were riveted by Holmes’s vision and her passionate pitches (no matter, Carreyrou writes, that she invented projected profits and falsely claimed that the U.S. military had stationed her devices on Humvees in Iraq). Companies such as Safeway and Walgreens feared missing out on a revolutionary technology that they imagined would vault them ahead of their competitors. And it’s hard not to notice that many in thrall with Holmes were older men who often invested in the company or joined her board of directors: George Shultz, a secretary of state under President Ronald Reagan; Larry Ellison, the billionaire who cofounded the Oracle Corporation; and James Mattis, now U.S. secretary of defense, among others.


A driven entrepreneur, before the company’s downfall Elizabeth Holmes was touted as “the next Steve Jobs.”

Theranos also benefited from uncertainty among regulators, who struggled to identify which agency should be charged with policing its services. Was the company offering simple blood tests, which fall under the Centers for Medicare and Medicaid Services? Did it have a diagnostic tool, governed by the U.S. Food and Drug Administration? Or was the Theranos product a “laboratory developed test,” at the time a more unusual offering in a regulatory gray zone? Like many legitimate companies, Holmes pressed for whichever oversight would prove easier to navigate and managed to place her testing machines in drug stores without validation.

But if the scientific fraud is impressive, it’s Holmes’s reportedly ruthless treatment of anyone who challenged her that makes Bad Blood hard to put down. Theranos, Carreyrou writes, was a revolving door, as Holmes and Balwani fired anyone who voiced even tentative doubts. (He shares that Holmes stopped speaking to an employee whose sister turned down a Theranos job offer.) Company emails were strictly monitored; legal threats were frequent and aggressive. One former employee suspected being followed. The family of another shelled out hundreds of thousands of dollars in legal fees to protect themselves.

Bad Blood boasts movie-scene detail—indeed, a film based on the book is under way. In one passage, for example, Holmes’s father flies a paper airplane toward her during Christmas dinner, with “P.H.D.” written on the side. (“No, Dad, I’m not interested in getting a Ph.D., I want to make money,” she tells him.) But the book’s detail can be dizzying, making it hard to follow the various narrative threads and the dozens of named individuals.

Theranos employees are the story’s heroes, with the force of journalism not far behind. In the last quarter of Bad Blood, Carreyrou describes the tip that ultimately led him to expose the company’s misdeeds. Nailing the story required coaxing truth from physicians and former employees, many of them fearful of legal action, and, with his superiors, facing down Theranos’s threats to the Journal.

What’s frightening is how easy it is to imagine a different outcome, one in which the company’s blood-testing devices continued to proliferate. That the story played out as it did is a testament to the many individuals who spoke up, at great personal risk.

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About the author

The reviewer is on staff at Science magazine.