The Theranos saga just keeps getting stranger and stranger.
Not much more than a year ago, Theranos was a hot startup valued at about $9 billion. The company, founded and led by Stanford dropout Elizabeth Holmes, promised it could perform a full battery of blood tests on just a single drop of blood, at prices well below those of blood-testing giants such as LabCorp and Quest Diagnostics.
Then, in October 2015, The Wall Street Journal began a series of stories, using information from former employees, stating that Theranos's blood-testing technology was not what it seemed, and sometimes delivered inaccurate results. The company is now being investigated by the U.S. attorney general's office and the Securities and Exchange Commission. It has also been sued by investors and by former partner Walgreens. Theranos is currently fighting a judgment from federal regulators that Holmes herself be banned from the blood-testing industry for two years.
Now, in another Journal story, comes news that one of the former employees who spoke with a Wall Street Journal reporter was Tyler Shultz, the grandson of George Shultz.
Yes, that George Shultz, the one who served as secretary of state under Ronald Reagan. When the Journal began to publish stories doubting the validity of Theranos's tests, Schultz was a member of its board of directors.
When the younger Schultz suspected trouble at the company, he didn't go immediately to the Journal. He spoke with one of his supervisors at Theranos, but wasn't satisfied with the explanation he was given, and eventually filed an anonymous complaint with a state regulator. He also sent an email to Holmes, who forwarded it to Sunny Balwani, Theranos's president at the time.
Shultz's unusual position, as the grandson of a board member, perhaps explains in part the extreme snippiness of the response he received from Balwani, which questioned his knowledge of biology and mathematics, which included this: "Let me share with you that had this email come from anyone else in the company, I would have already held them accountable for the arrogant and patronizing tone and reckless comments."
The Journal story goes into some depth about Tyler Shultz's relationship with his grandfather. George Shultz seems to have tried to arrange a settlement between his grandson and Theranos, which fell apart when the company's lawyers repeatedly asked him to sign documents different from those that had been agreed on.
George and Tyler Shultz seem to have been somewhat close, but now appear not to be on speaking terms. Tyler Shultz says part of the reason he decided to speak out was that he was hoping his grandfather would distance himself from the company. So far, that hasn't happened.