Mattis during his frequent trips to Iraq and Afghanistan. He wore a
gun holstered under his jacket or around his ankle at all times and led
a team of a half dozen guards who were dressed in black suits and
wore earpieces.
The tight security measures made an impression on James and
Grossman. It called to mind the lengths to which the Coca-Cola
Company went to guard its secret Coke formula and suggested to them
that Theranos had very valuable intellectual property to protect. The
representations Elizabeth and Sunny made to them cemented that
belief.
During that first meeting, Elizabeth and Sunny told their guests that
Theranos’s proprietary finger-stick technology could perform blood
tests covering 1,000 of the 1,300 codes laboratories used to bill
Medicare and private health insurers, according to a lawsuit Partner
Fund later filed against the company. (Many blood tests involve
several billing codes, so the actual number of tests represented by
those thousand codes was in the low hundreds.)
At a second meeting three weeks later, they showed them a
PowerPoint presentation containing scatter plots purporting to
compare test data from Theranos’s proprietary analyzers to data from
conventional lab machines. Each plot showed data points tightly
clustered around a straight line that rose up diagonally from the
horizontal x-axis. This indicated that Theranos’s test results were
almost perfectly correlated with those of the conventional machines.
In other words, its technology was as accurate as traditional testing.
The rub was that much of the data in the charts wasn’t from the
miniLab or even from the Edison. It was from other commercial blood
analyzers Theranos had purchased, including one manufactured by a
company located an hour north of Palo Alto called Bio-Rad.
Sunny also told James and Grossman that Theranos had developed
about three hundred different blood tests, ranging from commonly
ordered tests to measure glucose, electrolytes, and kidney function to
more esoteric cancer-detection tests. He boasted that Theranos could
perform 98 percent of them on tiny blood samples pricked from a
finger and that, within six months, it would be able to do all of them