One of the films to premiere at the 2019 Sundance Film Festival chronicles Elizabeth Holmes, the criminally-charged founder of the now-defunct biotech startup Theranos, Inc. The Inventor: Out for Blood in Silicon Valley highlights the world’s youngest self-made billionaire and the psychology of fraud.
The 119-minute film is summarized by Sundance.org:
Elizabeth Holmes arrived in Silicon Valley with a revolutionary medical invention. She called it “the Edison”: a small, hyper-sophisticated black box that performed 200 tests in minutes, all from a single drop of blood. Needles, laboratories, and the select few companies that controlled them would become instantly obsolete. Like Mark Zuckerberg, Steve Jobs, and Thomas Edison himself, Holmes intended to tear down and revolutionize an entire industry.
The hitch? All of it was a lie. The system was a hoax. And what began as one of 2014’s hottest tech companies—valued at nine billion dollars—dissolved into a fraudulent, bankrupt scheme that exposed Silicon Valley’s underbelly.
At 19 years old, after dropping out of the School of Chemical Engineering at Stanford University, Holmes used her tuition money to start Theranos in 2003. Her lofty goal seemingly to change the entire lab industry. The Silicon Valley start-up promised to revolutionize laboratory testing.
At its height, Theranos, headquartered in Palo Alto, California, had more than 800 employees and laboratories in Newark, California and Scottsdale, Arizona. The biotech company garnered nearly one billion dollars in venture capital funding from several high-profile investors and was at one point valued more than ten billion dollars.
In 2014 Forbes named Holmes one of the richest women in America. Two years later Forbes revised its estimate of Holmes’ net worth from $4.5 billion to $0.
What happened? It all came crashing down after being exposed as fraudulent, deceptive, and deceitful.
An investigation by John Carreyrou, the two-time Pulitzer Prize-winning investigative journalist with the Wall Street Journal, exposed Theranos by raising serious concerns about whether the company’s biotechnology actually worked. His front-page exposé was published in 2015.
The Securities and Exchange Commission (SEC) in March of 2018 charged Theranos, Inc., Holmes, and the company’s president Ramesh Balwani “with raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance”.
The SEC went on to say:
“The complaints allege that Theranos, Holmes, and Balwani made numerous false and misleading statements in investor presentations, product demonstrations, and media articles by which they deceived investors into believing that its key product – a portable blood analyzer – could conduct comprehensive blood tests from finger drops of blood, revolutionizing the blood testing industry. In truth, according to the SEC’s complaint, Theranos’ proprietary analyzer could complete only a small number of tests, and the company conducted the vast majority of patient tests on modified and industry-standard commercial analyzers manufactured by others.”
In June of 2018, following an investigation by the U.S. Attorney’s Office in San Francisco that lasted more than two years, a federal grand jury indicted Holmes and former Theranos COO and president Balwani on nine counts of wire fraud and two counts of conspiracy to commit wire fraud.
If convicted, they each face a maximum sentence of 20 years in prison and a fine of $250,000, plus restitution for each count of wire fraud and conspiracy, according to the U.S. Attorney’s office.
Sundance Film Festival runs from January 24 to February 3, 2019. The Inventor will debut on January 24 at 5:30 p.m. at the MARC Theatre in Park City, Utah; January 25 at 8:30 a.m. at Library Center Theatre in Park City, Utah; and January 27 at 6 p.m. at Broadway Centre Cinema 6 in Salt Lake City, Utah.
