Theranos Inc: A Revolutionary Blood-testing Start-Up Too Good To Be True? (A)

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Case

Reference no. W32147

Subject category: Economics, Politics and Business Environment

Authors: David Barrett (Ivey Business School, Western University); Artika Pahargarh (Ivey Business School, Western University); George Li (Ivey Business School, Western University); Julia Leonard (Ivey Business School, Western University); Hanna Ke (Ivey Business School, Western University)

Published by: Ivey Publishing

Originally published in: 2023

Version: 2023-05-31

Length: 7 pages

Data source: Published sources

Topics: Start-up; Medtech; Ethics; Communications; Economics & public policy; General management

Share a link: https://casecent.re/p/191713

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Abstract

This case series focuses on Theranos Inc (Theranos), a health care technology start-up founded by Elizabeth Holmes in 2003. Theranos focused on developing a revolutionary blood-testing technology that was supposed to be able to detect diseases using only a few drops of blood. Once valued at USD10 billion, the company never demonstrated its alleged technological breakthrough, and Holmes was eventually charged by the Securities and Exchange Commission for fraud and deceit. In 2018, Theranos was forced to shut down its operations, and in January 2022, Holmes was found guilty of three counts of wire fraud and one count of conspiracy to commit wire fraud. The case series explores Theranos's history, as well as the role of overconfidence bias in Theranos's downfall.