Elizabeth Holmes’ new company claims nuclear-based diagnostic test has failed to get investors and regulators excited

The Theranos and Theranos Rising Systems Association — which claims no ties to the blood-testing company at all — announced the arrival of a new variation of nuclear-based diagnostic tests Tuesday. It has drawn renewed attention from Wall Street analysts and regulators, who fear it might bring down Theranos.

Theranos had been making news about the new test and its early state, as the Associated Press reported. It says it represents the next generation of testing — diagnostic tests with just a single molecular antibody (which is similar to a spit), released in January. But that’s not the point, the company’s CEO and founder Elizabeth Holmes said then.

Theranos had grown into a giant DNA sequencing company since it co-founded by Holmes, a Stanford dropout who received a Nobel Prize-winning doctorate in neuroscience from the University of California, Berkeley. Theranos’s molecular testing tests are meant to eliminate human error from biology, a stand-in for the white paper on which they are based. In August, the Federal Food and Drug Administration began shutting down Theranos’ blood-testing plants. Because of the lab’s failures and Theranos’s inaccurate testing results, hundreds of Theranos customers had health problems.

Customers, medical communities and government regulators say the company’s tests are flawed, and have repeatedly warned Holmes and Theranos about the accuracy of its diagnostic technology, something the company says it fixes on all its diagnostic tests with a computer algorithm. It also uses what it calls a smart platform to analyze blood rather than machines that are factory-assembled. What this means is that testing results depend on the chemistry of the blood. Some tests might be valid, but other tests might be faulty.

Theranos and its subunits, Theranos Rising Systems and Theranos Therkonix are active in government, company, academic and medical research networks. They say they contribute to the science and technology for medical diagnostics and diagnosing cancer. Theranos, which operates in 30 states with some 80 employees, says it is looking to move into larger operations, despite the financial difficulties that stemmed from recent troubles.

In November, the Theranos directors resigned from the Theranos Rising Systems Association. In a Nov. 1 press release, Theranos confirmed the loss of three directors: Robert Hertzberg, Thomas Bouchard and Alexis Holmes. It said board replacements would be announced in a few weeks.

Theranos Rising Systems Association is a special division of the Theranos Silicon Valley Association. The statement says that Holmes will not be one of the board chairs, but that it also will not try to “take away” the board seats that Holmes holds, and that the association is not controlled by the company.

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