them useless as sources.
But my ears pricked up when I heard that they had talked to Theranos’s just-departed laboratory director and that he was alleging some sort of wrongdoing at the company. I also found the story of Ian Gibbons tragic and was intrigued by the fact that Rochelle said he’d confided to her on several occasions that the Theranos technology wasn’t working. It was the type of thing that would have been dismissed as hearsay in court, but it seemed credible enough to merit a closer look. In order to take this any further, though, what I needed to do next was clear: I needed to talk to Alan Beam.
* * *
—
THE FIRST HALF dozen times I dialed Alan’s number, I got his voicemail. I didn’t leave a message and instead resolved to just keep trying him. On the afternoon of Thursday, February 26, 2015, a voice with an accent I couldn’t quite place finally answered the phone. After ascertaining that it was in fact Alan, I introduced myself and told him I understood he had recently left Theranos with concerns about the way the company was operating.
I could sense he was very nervous, but he also seemed to want to unburden himself. He told me he would speak to me only if I promised to keep his identity confidential. Theranos’s lawyers had been harassing him and he was certain the company would sue him if it found out he was talking to a reporter. I agreed to grant him anonymity. It wasn’t a hard decision. Without him, all I had were secondhand sources and informed speculation. If he wouldn’t talk, there would be no story.
With the ground rules for our conversation established, Alan let down his guard and we talked for more than an hour. One of the first things he said was that what Ian had told Rochelle was true: the Theranos devices didn’t work. They were called Edisons, he said, and were error prone. They constantly failed quality control. Furthermore, Theranos used them for only a small number of tests. It performed most of its tests on commercially available instruments and diluted the blood samples.
It took me a while to understand the dilution part. Why would they do that and why was it bad? I asked. Alan explained that it was to make up for the fact that the Edison could only do a category of tests known as immunoassays. Theranos didn’t want people to know its technology was limited, so it had contrived a way of running small finger-stick samples on conventional machines. This involved diluting the finger-stick samples to make them bigger. The problem, he said, was that when you diluted the samples, you lowered the concentration of analytes in the blood to a level the conventional machines could no longer measure accurately.
He said he had tried to delay the launch of Theranos’s blood tests in Walgreens stores and had warned Holmes that the lab’s sodium and potassium results were completely unreliable. According to Theranos’s tests, perfectly healthy patients had levels of potassium in their blood that were off the charts. He used the word “crazy” to describe the results. I was barely getting my head around these revelations when Alan mentioned something called proficiency testing. He was adamant that Theranos was breaking federal proficiency-testing rules. He even referred me to the relevant section of the Code of Federal Regulations: 42 CFR, part 493. I wrote it down in my notebook and told myself to look it up later.
Alan also said that Holmes was evangelical about revolutionizing blood testing but that her knowledge base in science and medicine was poor, confirming my instincts. He said she wasn’t the one running Theranos day-to-day. A man named Sunny Balwani was. Alan didn’t mince his words about Balwani: he was a dishonest bully who managed through intimidation. Then he dropped another bombshell: Holmes and Balwani were romantically involved. I knew from reading the New Yorker and Fortune articles and from browsing the Theranos website that Balwani was the company’s president and chief operating officer. If what Alan was saying was true, this added a new twist: Silicon Valley’s first female billionaire tech founder was sleeping with her number-two executive, who was nearly twenty years her senior.
It was sloppy corporate governance, but then again this was a private company. There were no rules against that sort of thing in Silicon Valley’s private startup world. What I found more interesting was the fact that Holmes seemed to