When Elizabeth Holmes moved to Silicon Valley in 2002, few people thought highly of the young, blond, sharp-dressed Stanford dropout. In 2014, Wired famously dubbed her the “Felix Baumgartner of biotech.” By 2015, four other companies named Herceptin after her had produced a total of nearly $13 billion in combined revenue and forced Roche to buy it in one of the biggest biotechnology acquisitions of the decade.
Ever since that Bloomberg article emerged in 2014, along with a brewing investigation by the SEC and the Food and Drug Administration, Ms. Holmes’ fortunes have fallen. Her name was added to the World’s Most Wanted list in the summer of 2016. She allegedly spent millions of Herceptin sales proceeds on cosmetic surgeries and tennis lessons for her husband. She allegedly used high-priced consultants to promote her non-existent company called Theranos. She allegedly didn’t pay taxes, broke with an important loan agreement. And last week she was accused of running what amounted to a Ponzi scheme, as recounted in the New York Times and in a Vanity Fair article. She has resigned from all four of her listed companies.
Ms. Holmes remained an enigmatic figure for much of her life: tall, gregarious, and affable, but unfailingly modest about her accomplishments. “I am the one that has to pay people and I have to admit I haven’t been good at it,” she once said. She had no university degree, only a computer science degree from Stanford, which people didn’t seem to know much about. Her parents lived in a large bungalow in a residential neighborhood and had once been known as one of the most prominent and wealthy Mormon families in the valley. The year before her sophomore year in high school, she was dating a boy with whom she had a secret affair, a crush that she hid from her parents. “I think it’s very sad that I’m the shining example of the dysfunctionality of my family,” she told the magazine Fast Company in 2016.
But Ms. Holmes became a big deal in Silicon Valley after dropping out of Stanford in 2004, right as her boss announced a $7.5 million funding round in his company, the Web-based effort hosted by Stanford called Palo Alto Research Center. Ms. Holmes and her high-school boyfriend, a Stanford research assistant, developed an intricate apparatus, the HLST, that sucked blood from the vein and tested it for 28 biomarkers, enabling a prediction of cancer progression in four days. Next it became a technology that could test the blood of millions of people at once, and was touted by Bill Gates, Michael Dell, Larry Page, and Mark Zuckerberg. At the time, Ms. Holmes was raised in a strict Methodist home in suburban Chicago by a Mormon father and a French-Canadian mother.
Hershey’s chairman, Bernhard Oltmans, recruited Ms. Holmes to work in the corporate division of Procter & Gamble, where he was vice president. For years he had held a deep interest in the innovations in human genetics research, and in 2005 Ms. Holmes came to Palo Alto to join him there, where she founded a company called Reveal Pharmaceuticals. Her boss invited Ms. Holmes to join him in a pitch to help him sell a Series A round to their venture capital partners at Kleiner Perkins. “They said, ‘You have an idea to enter the market with in the next four to six months and we will help you get there,’” she recalled in an interview with Vanity Fair. “They told me I’d have to be the poster child for biotech and convince people that it’s possible to solve this problem in so little time.” Her pitch was that all blood tests would be this way one day, and if the venture capitalists signed on, she could get out of the venture capital business.
By 2005, Ms. Holmes had gotten her own investment and was running her company. Her name was on her company’s website, and Ms. Holmes had co-founded the firm alongside her brother, Sam, who had been recruited from Stanford by Mr. Oltmans. She kept the name Reveal while training him.
Ms. Holmes raised almost $110 million from investors, but the company never really took off. In 2015, with another round of funding, it was renamed Theranos and a new team was brought in to take it public. Theranos was preparing to go public at the same time that a Vanity Fair reporter began asking questions about its proprietary technology. Theranos wound up pulling back from its public relations efforts, and the SEC began investigating