By Stephanie Murg, Managing Director, G2 Intelligence
July is proving to be a month of milestones for Theranos (Palo Alto, Calif.). The company recently received its first FDA clearance—for its herpes simplex virus-1 (HSV-1) IgG assay—and announced a partnership with Pennsylvania health insurer Capital BlueCross (Harrisburg, Penn.) that will pave the way for the first Theranos patient service centers on the East Coast. Meanwhile, on July 3, the bill that Theranos lobbied into Arizona law took effect, removing all limits on the kinds of laboratory tests that can be ordered by patients in that state.
With $400 million in equity funding, Theranos emerged in the fall of 2013 after a decade in stealth mode with the promise to automate and miniaturize 1,000 laboratory tests and to deliver the results faster, better, and at less than 50% of Medicare reimbursement rates. A partnership with Walgreens, now in its pilot stages in Palo Alto and throughout Arizona, was followed by deals with Cleveland Clinic and Intermountain Healthcare as well as an aggressive rollout to consumer media outlets. Venture-capital firms now value the company at approximately $10 billion, according to founder and CEO Elizabeth Holmes.
The FDA decision, issued July 2 through the 510(k) process, clears for sale the Theranos HSV-1 IgG assay, which Theranos offers for $9.07. The laboratory-developed test (LDT), an enzyme-linked immunosorbent assay, is cleared for use on the company’s automated, proprietary platform with venous blood and fingerstick blood. The latter samples are collected in “Nanotainer” tubes that hold a few drops of blood.
Theranos has committed to submitting all of its LDTs to the FDA. “FDA review is a uniquely rigorous process we undertook voluntarily because we remain deeply committed to ensuring that our systems and all of our laboratory developed tests are of the highest quality, and that patients and their physicians have access to the most accurate information about their health,” said Holmes in a statement issued by the company.
Theranos’s move eastward will be expedited by its deal with Capital BlueCross, which covers 725,000 people in central Pennsylvania. The non-exclusive provider agreement, announced July 8, will make Theranos testing available in the two retail outlets operated by the insurer, which will promote the low-cost tests to its customers. Additionally, Theranos plans to open a network of patient service centers in the region—its first outside of Arizona and California.