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Supply Chain Shortages Threaten Medical Imaging Testing While Clinical Laboratories Face Scarcity of Blood Collection Specimen Tubes

From infant formula to contrast dye for CT scans, ongoing healthcare product shortages highlight continuing US supply chain and manufacturing issues

Medical laboratory directors and pathologists have firsthand knowledge of COVID-19 pandemic-driven supply chain issues, having faced backlogs for everything from pipettes and transport media to personal protective equipment (PPE). But the latest shortage impacting blood collection tubes is another example of why it is important to manufacture key products—including clinical laboratory tests, analyzers, and consumables—domestically.

On January 19, 2022, the federal Food and Drug Administration (FDA) issued a Letter to Healthcare Providers and Laboratory Personnel recommending “conservation strategies” to minimize blood collection tube use because of  “significant disruptions” in supplies due to COVID-19-increased demand and “recent vendor supply challenges.”

“The FDA updated the device shortage list to include all blood specimen collection tubes (product codes GIM and JKA),” the letter noted.

This announcement followed a similar June 10, 2021, Letter to Healthcare Providers and Laboratory Personnel that stated the FDA was aware “that the US is experiencing significant interruptions in the supply of sodium citrate blood specimen collection (light blue top) tubes because of an increase in demand during the COVID-19 public health emergency and recent vendor supply challenges.”

A spokesperson for Becton-Dickinson (BD), a manufacturer of blood specimen collection products, told Forbes that the COVID-19 pandemic caused “the most unpredictable demand that BD has experienced in our company’s history.” The spokesperson added, “Worldwide, BD produced nearly a half a billion additional blood tubes in 2021 versus 2020 … Like every business across every industry around the world, BD is experiencing limited availability of and access to raw materials, shipping and transportation delays, and labor shortages, which hinders our ability to ramp production.”

Christine Nielsen, CEO of the Canadian Society for Medical Laboratory Science, explained that the supply-chain problem includes many routine items, such as Phosphate-buffered saline, and cannot be solved by stockpiling certain supplies.

“It’s also a challenge because we’ve moved to just-in-time (JIT) inventory across all sectors, including labs … They outdate just like food [and] are no longer fresh. [The product] is no longer reliable and you can’t use it. So, we can’t stockpile either,” Nielsen told Forbes.

Shortages Hit Other Critical Healthcare Sectors

But shortages of supplies and equipment have spread beyond the clinical laboratory. Intravenous contrast—which contains iodine and is used to improve the accuracy of CT scans and exclude life-threatening conditions such as cancer—has been in short supply since GE Healthcare shut down its manufacturing facility in Shanghai, China, during the city’s two-month pandemic lockdown that began in early April.

“I can’t overstate the importance of iodinated contrast for really critical diagnostic tests,” said radiologist Geoffrey Rubin, MD, a specialist in cardiovascular and pulmonary imaging, and professor and Chair of Radiology at University of Arizona, Tucson, in a Radiological Society of North America (RSNA) news release covering the contrast shortage.

“This isn’t an ancillary tool. This is something that’s used many, many times every day for both lifesaving decisions in the setting of trauma and for managing cancer patients and determining the appropriate care for them,” he added.

Rosa DeLauro, US Representative
 US Rep. Rosa DeLauro (above), lamented the fact these vital products are not being made in sufficient quantities in the US. “In the wealthiest nation on Earth, there should be no reason doctors are forced to ration lifesaving medical scans to compensate for a shortage of material,” DeLauro told The New York Times. “We are seeing supply chains break down because of consolidated industries experiencing manufacturing shortages and offshoring American jobs to China.” Clinical laboratory managers have first-hand knowledge of the severity of supply shortages. (Photo copyright: CNN.)

GE Healthcare is one of four companies that supply iodine-containing contrast to the United States, but the other three manufacturers have been unable to scale-up and offset the shortage.

By June 14, 2022, the Shanghai facility had returned to 100% production capacity following the easing of local COVID restrictions, according to a GE Healthcare statement. But shortages remain.

“There is still the challenge of bringing the contrast media across the ocean and distributing it to healthcare facilities across the nation,” Nancy Foster, the American Hospital Association’s (AHA) Vice President of Quality and Patient Safety Policy, told CNN.

“The hospital association estimates that about half of all hospitals in the United States rely on GE for contrast dye to perform about 20 million scans a year, or about 385,000 scans each week,” CNN reported.

Critical Medical Products Must be Manufactured Domestically

Oncologist Shikha Jain, MD, Assistant Professor of Medicine at the University of Illinois Cancer Center in Chicago, told CNN that contrast shortages are “not an isolated incident.”

“We’ve been having shortages throughout the pandemic. At the very beginning of the pandemic, it was PPE shortages,” Jain said. “Now, we have contrast shortages and formula shortages for babies.”

The infant formula crisis is the other headline grabbing news in recent weeks. Three companies—Abbott, Reckitt, and Gerber—manufacture 95% of the baby formula sold in the US, with Abbott controlling roughly 42% of the nation’s supply, CNN reported.

“Initially, this problem affected those who are on more specialized formulas or had nutritional issues,” Stephanie Seger, Director of Government Relations at Children’s Mercy Hospital in Kansas City, Mo., told CNN. ‘Then the gap, or the emptiness on the shelves, increased to the point where it’s now any formula. It’s now any parent of any baby.”

The Biden administration took steps in May to increase the supply of imported formula, but like the Intravenous contrast shortage, the problem has not been solved.

The COVID-19 pandemic has served to underscore the serious issues affecting supply chains for hospital, medical laboratory, and other critical supplies. While no quick fix has appeared on the horizon, the clinical laboratory industry should take steps now to work toward long-term solutions.

—Andrea Downing Peck

Related Information:

GE Healthcare Update on Iodinated Contrast Media

Update: Blood Specimen Collection Tube Conservation Strategies—Letter to Health Care and Laboratory Personnel

Blood Specimen Collection Tube Shortage: Frequently Asked Questions

Patients Face Long Delays for Imaging of Cancers and Other Diseases

Memorandum: Hearing on ‘Formula Safety and Supply: Protecting the Health of America’s Babies’

President Biden Announces Additional Steps to Address Infant Formula Shortage

Despite Moves to Increase Supply, Families Are Still Feeling the Pain of the Baby Formula Shortage

Blood Collection Tube Shortages Continue, ‘Routine’ Labs Should Be Limited

Hospitals Grapple with Shortage of Crucial Component for Medical Imaging Testing

Iodinated Contrast Shortage Challenges Radiologists

Walmart’s Health and Wellness Chief Discusses Retail Giant’s Move to Healthcare/Telehealth Provider, a Step with Implications for Clinical Laboratory Testing

Retail giant now has primary care clinics at stores in five states, but the rollout has not gone smoothly

Healthcare is increasingly being driven by consumerism and one clear sign of this trend is Walmart’s ambitious plan to open health clinics at its retail locations. The retail giant set its plans in motion in 2019 with its first primary care site in a suburban Atlanta store, however, the rollout since then has presented certain challenges.

Nevertheless, the trend of placing nearly full-service primary care clinics in retail locations continues. Clinical laboratories in these areas need strategies to serve customers accessing healthcare through these new channels, particularly as Walmart and the national retail pharmacy chains continue to expand the clinical services offered in their retail stores.

“Consumer engagement is a huge part of healthcare, [yet it is also a] gap for us in healthcare,” cardiologist and Walmart VP of Health and Wellness Cheryl Pegus, MD, told Modern Healthcare. “Healthcare is incredibly complicated,” she added. “And where we are in healthcare today is not in having great treatments. It’s not in having evidence-based medicine. It’s understanding how we engage consumers.”

The company also entered the telehealth business with last year’s acquisition of multispecialty telehealth provider MeMD.

“Telehealth offers a great opportunity to expand access and reach consumers where they are and complements our brick-and-mortar Walmart Health locations,” said Pegus in a Walmart new release announcing the acquisition. “Today people expect omnichannel access to care and adding telehealth to our Walmart healthcare strategies allows us to provide in-person and digital care across our multiple assets and solutions.”

Currently, Walmart Health centers only operate in Georgia, Florida, Illinois, and Arkansas. But telehealth enables Walmart “to provide virtual healthcare across the country to anyone,” Pegus said. With both offerings, “we’re really attempting to allow people to get healthcare the way they need it without disrupting the rest of their life.” Many users of these services are Walmart “associates,” she added, using the company’s term for its retail employees.

Cheryl Pegus, MD
 
“In this country, about 25% of people don’t have a primary care physician,” cardiologist Cheryl Pegus, MD (above), Walmart’s VP of Health and Wellness, told Medscape. “So, your options for being able to solve in real time something that will help you, they’re quite limited. What we’re trying to do is give those options. We’re not trying to take away emergency rooms, or healthcare systems, or existing primary care. We’re asking, how do we expand that infrastructure so that people get care when they need it?” And this includes clinical laboratory testing, radiology, and telehealth services as well. (Photo copyright: Walmart.)

Large Portfolio of Healthcare Offerings

Pegus joined Walmart (NYSE:WMT) in December 2020 to oversee a portfolio that now includes more than 4,700 pharmacies and 3,400 Vision Centers, in addition to the telehealth operation and the Walmart Health centers. She was previously chief medical officer at Walgreens and Cambia Health Solutions and worked in private practice as a cardiologist.

The retail giant opened its first Walmart Health center in Dallas, Ga., an Atlanta suburb, in September 2019, followed by additional centers in Georgia, Arkansas, and Illinois.

Earlier this year, it opened five new clinics in northern and central Florida with plans for at least four more in the Jacksonville, Orlando, and Tampa areas, according to a press release. Each health center is adjacent to a Walmart retail location.

These centers offer a range of primary care medical services, including:

  • physicals,
  • injury care,
  • immunizations,
  • radiology, and
  • care for chronic health conditions.
One of the first health clinics established by Walmart
Pictured above is one of the first health clinics established by Walmart. This location is in a western Atlanta suburb. Note that the services advertised include more than just primary care. Also offered are “labs and X-ray,” along with dental, hearing, optometry, and counseling. Clinical laboratory managers and pathologists may want to monitor whether consumers embrace primary care delivered from clinics located in retail stores. (Photo copyright: Georgia Health News.)

As Dark Daily reported in May 2020, the Walmart Health centers also offer clinical laboratory testing at cut-rate prices, such as:

  • $10 for a lipid test,
  • $10 for Hemoglobin A1c, and
  • $20 for a strep test.

On the Walmart Health website, patients can enter their Zip code to view a list of Walmart Health clinics in their area, including links to price lists.

Walmart’s Expansion into Healthcare Not Without Problems

In “Walmart to Open 4,000 Healthcare ‘Supercenters’ by 2029 That Include ‘Comprehensive’ Clinical Laboratory Services,” Dark Daily covered how Walmart was poised to become a much bigger healthcare player with an expanded menu of clinical laboratory testing services including EKGs, vision care, dental care, and more for children and adults.

However, the company’s expansion into healthcare has not gone smoothly. In 2018, the Walmart board signed off on a plan to open 4,000 health centers by 2029, Insider reported. By the end of 2021, Walmart expected to have 125 health centers in operation, but as of June 2022, the Walmart Health website listed only 25 locations, mostly in Georgia.

Citing anonymous sources, Insider reported problems that include “leadership changes, competing business priorities brought on by the coronavirus pandemic, and the complexity of scaling a massive healthcare operation.”

In Sept. 2021, Insider further reported that the clinics were experiencing operational difficulties including hidden fees and billing problems. One culprit, the story suggested, was the company’s electronic health record (EHR) software. That same month, Walmart announced it would adopt the Epic health records system, beginning with the opening of new clinics in Florida locations.

Pegus’ arrival at Walmart appears to be part of a management shakeup. In January 2022, Insider reported that she had assembled a new executive team, with David Carmouche, MD, Senior VP, Omnichannel Care Offerings, overseeing the health centers and telehealth operations. By then, the original executives leading the rollout of the health centers had all left, Insider reported. Carmouche was previously an executive VP with Ochsner Health in New Orleans.

Partnership with Quest Diagnostics

Meanwhile, in January, Walmart announced a deal with Quest Diagnostics that allows consumers to order more than 50 lab tests through The Wellness Hub on Walmart.com, which is separate from the Walmart Health website. The tests cover “general health, digestive health, allergy, heart health, women’s health, and infectious disease,” according to a press release announcing the partnership.

Consumers can order at-home test kits for certain conditions or set up appointments for tests at Quest Patient Service Centers. The tests on the Walmart/QuestDirect website include:

  • COVID-19 Active Infection ($119+)
  • COVID-19 Antibody Test ($69)
  • Cholesterol Panel ($59)
  • Complete Blood Count ($59)
  • Comprehensive Metabolic Panel ($49)
  • CRP Inflammation Marker ($59)
  • Diabetes Management ($69+)
  • Diabetes Risk ($99+)
  • Food Allergy Test Panel ($209)
  • Chickenpox ($59)

The website also offers a combined Basic Health Profile with CBC, CMP, cholesterol panel, and urinalysis for $149. “Each purchase is reviewed and, if appropriate, ordered by a licensed physician,” the press release states.

What does all this mean for clinical laboratories? “They need to recognize that the Millennials and Gen Zs are driving a consumer revolution in healthcare,” said Robert Michel, Publisher and Editor-in-Chief of Dark Daily and its sister publication The Dark Report.

“Walmart was early to recognize and respond to this, in part because it employs 1.3 million Americans, many of whom are Gen Y and Gen Z and quick to use telehealth and similar virtual health services,” he added.

Clinical laboratory leaders need to understand this trend and develop strategies to attract and serve new patients who are willing to access healthcare virtually, while still needing to provide blood and other specimens for the lab tests ordered by their providers.

Stephen Beale

Related Information:

Q/A with Dr. Cheryl Pegus of Walmart: ‘Consumer Engagement Is a Huge Part of Healthcare’

Nine Numbers That Show How Big Walmart’s Role in Healthcare Is

Walmart Health Opens Two More Locations in Chicago

Change Makers: Dr Cheryl Pegus on How Walmart Is Rethinking Health

Walmart to Open Two Health Clinics in Rogers, Fort Smith

Walmart Deepens Healthcare Offering with Lab Test Partnership

Walmart Tests Leap into Healthcare Business by Opening Second Clinic

Walmart to Open 4,000 Healthcare ‘Supercenters’ by 2029 That Include ‘Comprehensive’ Clinical Laboratory Services

Tale of Two Trials: Unlike Ex-Theranos CEO Elizabeth Holmes, COO/President Ramesh ‘Sunny’ Balwani Found Guilty of All Charges

Balwani’s lawyers opted not to have their client testify in his own defense and called only two witnesses, while Holmes’ defense team offered jurors the opportunity to hear her testimony

Elizabeth Holmes and Ramesh “Sunny” Balwani dreamed of revolutionizing the clinical laboratory blood-testing industry with their now defunct Theranos Edison device, which they claimed could perform multiple tests with a single finger prick of blood. Instead, they became the rare Silicon Valley executives to be convicted of fraud.

On July 7, ex-COO/President Balwani was convicted on all 12 counts of wire fraud and conspiracy charges in his federal fraud trial. Holmes, Theranos’ founder/CEO and former romantic partner to Balwani, avoided convictions six months ago in January on seven of the 11 counts she faced for her role in exaggerating the accuracy and reliability of the company’s Edison blood-testing device and providing false financial claims to investors.

“Once again, a jury has determined that the fraud at Theranos reached the level of criminal conspiracy,” said FBI Special Agent in Charge Sean Ragan in a press release posted on Twitter following the verdict. “The FBI has spent years investigating this investment fraud scheme with our partners at USPIS and the FDA Office of Criminal Investigations. Lies, deceit, and criminal actions cannot replace innovation and success.”

How did the trials differ? That’s the question many clinical laboratory directors and pathologists who followed Theranos’ legal saga may be asking, as well as how the Theranos trials reflect on their own duties under the Clinical Laboratory Improvement Amendments of 1988 (CLIA).

Ramesh “Sunny” Balwani
 
Ramesh “Sunny” Balwani (above center), former COO/President of Theranos, is shown leaving the federal courthouse in San Jose, Calif., on July 7 after he was found guilty on all 12 counts of fraud, a verdict more severe than ex-CEO and Theranos founder Elizabeth Holmes received in January for similar charges. Clinical laboratory directors and medical laboratory scientists have been closely monitoring both trails. (Photo copyright: Jim Wilson/The New York Times.)

Balwani’s Age and Experience May Have Worked Against Him

Michael Weinstein, JD, a former Justice Department prosecutor who is the Chair of White-collar Litigation at Cole Schotz, told The New York Times that Balwani’s age and his trial date—three months after Holmes’ conviction—worked against him. Balwani, 57, could not present himself as a young and inexperienced tech executive easily manipulated by those around him, as Holmes, 38, had attempted to do.

“Holmes could come off as a bit naïve, and [her defense team] tried to sell that,” Weinstein said of the former Stanford University dropout who founded Theranos in 2003 when she was 19.

In Holmes’ case the verdict was mixed, with jurors acquitting her of the patient fraud counts but unable to reach a decision on some of the investor fraud counts, Bloomberg reported.

Mr. Balwani, however, “came off as more of an experienced technology executive,” Weinstein added.

Weinstein pointed out that because the government’s case against Balwani mirrored its case against Holmes, prosecutors had time to refine their strategy before making a second appearance inside US District Court Judge Edward Davila’s San Jose courtroom.

“The streamlined presentation, the streamlined evidence, the streamlined narrative—all was beneficial for the government in the end,” he said.

Ever since opening arguments in March, Balwani’s legal team portrayed him to the jurors as a loyal partner who believed in Theranos’ technology and “put his money where his mouth is,” the Guardian noted.

Prosecutors, however, made the case that Balwani had a hands-on role in running the lab and was the source of Theranos’ overinflated financial projections.

Balwani invested about $15 million in the startup between 2009 and 2011 and never cashed in when his stake grew to $500 million. That money evaporated when Theranos collapsed.

In all, 24 witnesses testified against Balwani. He was ultimately convicted of all 12 counts he faced:

  • Two counts of conspiring with Holmes,
  • Six counts of defrauding investors, and
  • Four counts of patient fraud.

Major Differences in Trial Testimony

The Balwani trial made headlines due to COVID-19 pandemic related delays, but otherwise did not produce the news-generating moments that punctuated Holmes’ nearly four-month-long court appearance. Thirty-two witnesses appeared at the Holmes trial, including Secretary of Defense James Mattis, according to CNN.

Another significant difference in the two trials was that Holmes testified in her own defense. Holmes spent nearly 24 hours on the stand, CNN Business noted at that time, during which she cast the blame for Theranos’ failings on those around her, including Balwani.

In one of her trial’s most dramatic moments, a tearful Holmes accused Balwani of emotional and sexual abuse, including forcing her to have sex, which Dark Daily covered in “Balwani and Holmes’ Personal Relationship Takes Center Stage in Criminal Trial, Fueling Continued Public Interest in Theranos Fraud Saga.” Balwani denied those allegations.

ABC News Rebecca Jarvis, host and creator of the podcast “The Dropout,” believes Balwani’s decision not to testify worked against him.

“[The abuse claims] did not come up at his trial, but during [Holmes’] seven days of testimony, they were a big portion of what she talked about,” Jarvis said in an ABC NewsStart Here” podcast. “The biggest difference is that he didn’t take the stand to say, ‘I didn’t do this,’ or … raise his own objections to the claims against him.

“You think about a jury who is supposed to know nothing about any of [the defendant’s] backstory, and they’re shown these things like … case pictures of [Holmes] so much younger than [Balwani], supposedly having to rely on him for his expertise,” Jarvis added.

“You can imagine where the jury may have found that presentation more sympathetic than Sunny Balwani who had experience,” she said.

Text May Have Been Balwani’s Undoing

Balwani’s defense team called only two witnesses:

  • A naturopathic physician who used Theranos’ blood-testing lab, and
  • A technical consultant who Balwani’s legal team hired to assess the accessibility of patient data in Theranos’ Laboratory Information System (LIS), which the defense argued could have provided evidence of the accuracy of Theranos’ test results.

Attorney Jennifer Kennedy Park, JD, a partner at Cleary Gottlieb, told Yahoo Finance the LIS database may have played a role in the jury’s verdict as well.

“This verdict also signals the jurors did not buy Balwani’s highly speculative argument that the database Theranos lost in 2018 would have proven his innocence,” Park said.

In a statement to CNN Business, Balwani attorney Jeffrey Coopersmith, JD, of Orrick, Herrington and Sutcliffe, LLP, said the defense is exploring avenues to possibly fight the jury’s decision.

“We are obviously disappointed with the verdicts,” he said. “We plan to study and consider all of Mr. Balwani’s options including an appeal.”

Following the verdicts, Judge Davila raised Balwani’s bail to $750,000 and set a Nov. 15 sentencing date. Holmes is scheduled to be sentenced Sept. 26.

Balwani’s own words may have been his final undoing. During closing arguments, prosecutors again showed jurors a text message Balwani sent to Holmes in 2015, The New York Times reported.

“I am responsible for everything at Theranos,” he wrote. “All have been my decisions too.” 

Clinical laboratory directors and medical laboratory scientists will no doubt continue to monitor the fallout from these two extraordinary federal fraud trials. There’s still much to learn about CLIA-laboratory director responsibility and how the government plans to prevent future lab testing fraud from taking place.

Andrea Downing Peck

Related Information:

Tweet: FBI San Francisco

Theranos Trial: Legal Saga Reaches Final Chapter as Sunny Balwani Faces Verdict

No. 2 Theranos Executive Found Guilty of 12 Counts of Fraud

The Key Moments from Elizabeth Holmes’ Trial

Theranos Ex-President Balwani Found Guilty of Fraud

ABC: Start Here Podcast

Theranos: Elizabeth Holmes Co-Defendant Sunny Balwani Found Guilty of All 12 Counts

Former Theranos COO Is Guilty of Federal Fraud

Closing Statements Made in Trial of Sunny Balwani

Theranos Trial: Legal Saga Reaches Final Chapter as Sunny Balwani Faces Verdict

Former Theranos President’s Defense Rests in Criminal-Fraud Trial

Former Theranos Executive Sunny Balwani’s Fraud Trial Heads to Jury

Ramesh “Sunny” Balwani Convicted by a Jury on 12 Counts of Fraud in Theranos Trial

Theranos ex-COO and President Balwani will be sentenced on Nov. 15, while former CEO Elizabeth Holmes has her sentencing on Sept. 26

Observers within the clinical laboratory industry likely were not surprised to hear that Ramesh “Sunny” Balwani was convicted on Thursday of 12 counts of fraud related to his work at disgraced medical laboratory testing startup Theranos.

After all, Balwani’s conviction comes six months after a similar verdict for Elizabeth Holmes, the former founder and CEO of Theranos. The two were romantically involved during their time at the company.

A jury in San Jose deliberated for several days before reaching the guilty verdict against Balwani, 57, on a dozen counts of wire fraud and conspiracy to commit wire fraud. He is the former chief operating officer and president at the Theranos. Holmes was convicted of four counts in January.

“The jury concluded that Balwani perpetrated frauds on unsuspecting patients,” Stephanie Hinds, US Attorney for the Northern District of California, told the press after the verdict.

Balwani didn’t provide any comments to the two dozen or so reporters and photographers who followed him as he left the courthouse.

Ramesh “Sunny” Balwani leaves the courthouse after being convicted on 12 counts of fraud during his Theranos trial.

Balwani, Like Holmes, Faces 20 Years Behind Bars

Balwani will be sentenced on Nov. 15, reported NBC Bay Area. Holmes is scheduled to be sentenced on Sept. 26. She and Balwani each face up to 20 years in prison on each count, although a judge could allow those terms to run concurrently for each individual.

At the core of Balwani’s trial was whether he knew that Theranos allegedly defrauded patients and investors about its proprietary Edison blood-testing machine. The government argued that Balwani realized the Edison analyzer did not work and that he should have informed investors about the poor accuracy of the equipment. 

As The Dark Report noted in its April 25 issue, keen laboratory directors and pathologists following the trial and verdict would be wise to review how the proceedings put the spotlight on lab director duties required under the Clinical Laboratory Improvement Amendments of 1988.

‘I am Responsible for Everything at Theranos’

In the end, the jury did not believe Balwani’s contention that he was merely an investor who let Holmes steer business matters at Theranos. Jurors saw text messages between Balwani and Holmes that defied that defense strategy.

For example, in one text to Holmes, Balwani wrote, “I am responsible for everything at Theranos,” NBC Bay Area reported during the trial.

A profile on Balwani published in March 2022 by The Cut, a website affiliated with New York magazine, also pushed the idea he had influence. “While many questions remain about Balwani’s role in the Theranos scheme, he definitely wielded a lot of power at the company,” The Cut reported.

Balwani and Holmes were indicted by federal prosecutors in June 2018. The indictments followed a three-year investigation by the government, which occurred after a blockbuster series of articles by the Wall Street Journal that detailed complaints from whistleblowers who formerly worked at Theranos.

Balwani never took the stand in his own defense. However, during closing arguments, his attorney, Jeffrey Coopersmith, JD, said Holmes’ charm influenced Balwani, much like it did Theranos investors.

“There’s no reason why he wouldn’t have seen the exact same thing: the charisma, the drive, the vision, the goal to change diagnostic testing. And he bought into that vision,” Coopersmith told the jury, as reported by Bloomberg. “He bought into that vision not only with his time but also with his own money,” investing $4.6 million in Theranos.

Compared to Holmes’ trial, which attracted huge media attention from around the world, Balwani’s proceedings occurred to much less hype and fanfare, given he was not as well known as Holmes to the general public and press.

Scott Wallask

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Related Information:

Balwani and Holmes’ Personal Relationship Takes Center Stage in Criminal Trial, Fueling Continued Public Interest in Theranos Fraud Saga

Theranos Founder and Former Chief Operating Officer Charged in Alleged Wire Fraud Schemes

The Powerful Impact of the Theranos Whistleblower

California-Based Genomics Startup Secures $600 Million in Funding to Deliver $100 Whole Human Genome with Its New High-Throughput, Low-Cost Sequencing Platform

Ultima Genomics says it is emerging from “stealth mode” with millions in fresh capital and technology capable of sequencing whole human genomes for a fraction of the cost

Investors seem to be optimistic that an emerging genetics company has the proprietary solution to sequence a whole human genome for just $100. If true, this is a development that would be of interest to clinical laboratory managers and pathologists.

The company, Ultima Genomics of Newark, Calif., recently announced that it had raised $600 million from the investment community. In a press release last month, the company announced it has “emerged from stealth mode with a new high-throughput, low-cost sequencing platform that delivers the $100 genome.”

The press release goes on to state that Ultima will unleash a new era in genomics-driven discoveries by developing a “fundamentally new sequencing architecture designed to scale beyond conventional approaches, including completely different approaches to flow cell engineering, sequencing chemistry, and machine learning.”

Are we at the cusp of a revolution in genomics? Ultima Genomics’ founder and CEO, Gilad Almogy, PhD, believes so.

“Our architecture is intended for radical scaling, and the $100 genome is merely the first example of what it can deliver,” he said in the press release. “We are committed to continuously drive down the cost of genomic information until it is routinely used in every part of the healthcare system.”

From an Estimated Cost of $3 Billion to $450 in Just 30 Years!

Whole genome sequencing (WGS) has decreased dramatically in cost since research into the technology required got started in the early 1990s with the publicly-funded Human Genome Project. At that time, the cost to sequence the entire human genome was estimated at around $3 billion. Then, in 1998, John Craig Venter created Celera Genomics (now a subsidiary of Quest Diagnostics) and was the first to sequence the whole human genome (his own) and at a significantly lower cost of around $300 million.

The cost continued to drop as technology improved. In 2001, the cost to sequence the whole human genome hovered around $100 million. Twenty years later that cost had dropped to about $450/sequence, according to data compiled by the National Human Genome Research Institute (NHGRI), a division of the National Institutes of Health (NIH).

When DNA sequencer Illumina announced in 2014 the arrival of the $1,000 genome, the news was expected to put whole genome sequencing on the road to becoming routine, Forbes reported. But that prediction didn’t pan out.

Ultima Genomics’ $100 price point, however, could be game changing. It would make the cost of decoding a human genome affordable for nearly everyone and accelerate the growth of personalized medicine in clinical laboratory diagnostics.

Applied Physics versus Biological Sciences

According to GEN, Almogy brings a tech background to Ultima—his PhD is in applied physics, not the biological sciences. He founded Ultima in 2016 after serving as founder, president, and CEO at Fulfil Solutions, a manufacturer of custom automation robotics systems. At Ultima, his goal is to “unleash the same relentless scaling in sequencing” that was used to drive down the cost of computing power and transform modern life.

“Ultima is the real deal, with good technology,” Raymond McCauley, cofounder and Chief Architect at BioCurious, and Chair of Digital Biology at Singularity Group, told Singularity Hub. “They’ve been working on an Illumina killer for years.”

Gilad Almogy, PhD
 “We designed our new sequencing architecture to scale beyond conventional technologies, and are excited to soon make the UG 100, our first instrument using this architecture, commercially available to more customers,” said Gilad Almogy, PhD (above), Ultima Genomics’ founder and CEO, in a press release. “In the future, we aim to continuously improve our technology, further drive down costs, and increase the scale of genomic information to improve patient outcomes.” At $100/sequence, whole genome sequencing may well become commonly available to improve precision medicine diagnostics and clinical laboratory testing. (Photo copyright: Ultima Genomics.)

In late May, Ultima released “Cost-efficient Whole Genome-Sequencing Using Novel Mostly Natural Sequencing-by-Synthesis Chemistry and Open Fluidics Platform,” a preprint that details the technology underlying Ultima’s UG100 platform. That news was followed by presentations of early scientific results by research institutes currently using Ultima’s technology during the Advances in Genome Biology and Technology 2022 annual meeting.

TechCrunch reported that Ultima’s UG100 sequencing machine and software platform can perform a complete sequencing of a human genome in about 20 hours, with precision comparable to existing options, but does so at a far lower cost per gigabase (Gb), equal to one billion base pairs.

According to the Ultima Genomics website, its breakthroughs include:

  • An open substrate that creates a massive, low-cost reaction surface that delivers many billions of reads while avoiding costly flow cells and complicated fluidics.
  • Novel scalable chemistry that combines the speed, efficiency, and read lengths of natural nucleotides with the accuracy and scalability of endpoint detection.
  • A revolutionary sequencing hardware that uses spinning circular wafers that enable efficient reagent use, zero crosstalk, and ultra-high-speed scanning of large surfaces.

“We may be on the brink of the next revolution in sequencing,” Beth Shapiro, DPhil, an evolutionary molecular biologist at the University of California, Santa Cruz (UCSC), told Science. Shapiro is a professor of ecology and evolutionary biology and an HHMI Investigator at UCSC and Director of Evolutionary Genomics at the UCSC Genomics Institute.

Ultima Genomics maintained a low profile since its founding six years ago. But that changed in May when it announced it had raised $600 million from multiple investors, including:

Affordable Genomics Will Lead to ‘Millions of Tests per Year’

Exact Sciences’ Chairman and CEO Kevin Conroy—whose Wisconsin-based molecular diagnostics company recently entered into a long-term supply agreement for Ultima Genomic’s NGS technologies—believes low-cost genomic sequencing will improve cancer screening and disease monitoring.

“Exact Sciences believes access to differentiated and affordable genomics technologies is critical to providing patients better information before diagnosis and across all stages of cancer treatment,” Conroy said in a press release. “Ultima’s mission to drive down the cost of sequencing and increase the use of genomic information supports our goal to provide accurate and affordable testing options across the cancer continuum. This is particularly important for applications like cancer screening, minimal residual disease, and recurrence monitoring, which could lead to millions of tests per year.”

GEN pointed out that Ultima’s 20-hour turnaround time is fast and its quality on par with its competitors, but that it is Ultima’s $1/Gb price (noted in the preprint) that will set it apart. That cost would be a fraction of Illumina’s NextSeq ($20/Gb) and Element Biosciences’ AVITI ($5/Gb).

Almogy told TechCrunch that Ultima is working with early access partners to publish more proof-of-concept studies showing the capabilities of the sequencing technique, with broader commercial deployment of the technology in 2023. Final pricing is yet to be determined, he said.

If the $100 genome accelerates the pace of medical discoveries and personalized medicine, clinical laboratory scientists and pathologists will be in ideal positions to capitalize on what the executives and investors at Ultima Genomics hope may become a revolution in whole human genome sequencing and genomics. 

—Andrea Downing Peck

Related Information:

Ultima Genomics Delivers the $100 Genome

Ultima Genomics Claims $100 Full Genome Sequencing after Stealth $600M Raise

A $100 Genome? New DNA Sequencers Could Be a ‘Game Changer’ for Biology, Medicine

Ultima Genomics and Exact Sciences Enter Long-Term Supply Agreement Aimed at Improving Patient Access to Genomic Testing by Driving Down Sequencing Costs

Cost-Efficient Whole Genome-Sequencing Using Novel Mostly Natural Sequencing-by-Synthesis Chemistry and Open Fluidics Platform

Ultima Genomics Bursts onto the Scene Targeting the “$100 Genome”

MGI Announces Commercial Availability of DNBSEQ Sequencers in the United States

The $1,000 Genome Arrives–for Real, This Time

Ultima Genomics Claims the $100 Genome and Raises $600M to Go Even Lower

Diagnosing Ovarian Cancer Using Perception-based Nanosensors and Machine Learning

Two studies show the accuracy of perception-based systems in detecting disease biomarkers without needing molecular recognition elements, such as antibodies

Researchers from multiple academic and research institutions have collaborated to develop a non-conventional machine learning-based technology for identifying and measuring biomarkers to detect ovarian cancer without the need for molecular identification elements, such as antibodies.

Traditional clinical laboratory methods for detecting biomarkers of specific diseases require a “molecular recognition molecule,” such as an antibody, to match with each disease’s biomarker. However, according to a Lehigh University news release, for ovarian cancer “there’s not a single biomarker—or analyte—that indicates the presence of cancer.

“When multiple analytes need to be measured in a given sample, which can increase the accuracy of a test, more antibodies are required, which increases the cost of the test and the turnaround time,” the news release noted.

The multi-institutional team included scientists from Memorial Sloan Kettering Cancer Center, Weill Cornell Medicine, the University of Maryland, the National Institutes of Standards and Technology, and Lehigh University.

Unveiled in two sequential studies, the new method for detecting ovarian cancer uses machine learning to examine spectral signatures of carbon nanotubes to detect and recognize the disease biomarkers in a very non-conventional fashion.

Daniel Heller, PhD
 
“Carbon nanotubes have interesting electronic properties,” said Daniel Heller, PhD (above), in the Lehigh University news release. “If you shoot light at them, they emit a different color of light, and that light’s color and intensity can change based on what’s sticking to the nanotube. We were able to harness the complexity of so many potential binding interactions by using a range of nanotubes with various wrappings. And that gave us a range of different sensors that could all detect slightly different things, and it turned out they responded differently to different proteins.” This method differs greatly from traditional clinical laboratory methods for identifying disease biomarkers. (Photo copyright: Memorial Sloan-Kettering Cancer Center.)

Perception-based Nanosensor Array for Detecting Disease

The researchers published their findings from the two studies in the journals Science Advances, titled, “A Perception-based Nanosensor Platform to Detect Cancer Biomarkers,” and Nature Biomedical Engineering, titled, “Detection of Ovarian Cancer via the Spectral Fingerprinting of Quantum-Defect-Modified Carbon Nanotubes in Serum by Machine Learning.”

In the Science Advances paper, the researchers described their development of “a perception-based platform based on an optical nanosensor array that leverages machine learning algorithms to detect multiple protein biomarkers in biofluids.

“Perception-based machine learning (ML) platforms, modeled after the complex olfactory system, can isolate individual signals through an array of relatively nonspecific receptors. Each receptor captures certain features, and the overall ensemble response is analyzed by the neural network in our brain, resulting in perception,” the researchers wrote.

“This work demonstrates the potential of perception-based systems for the development of multiplexed sensors of disease biomarkers without the need for specific molecular recognition elements,” the researchers concluded.

In the Nature Biomedical Engineering paper, the researchers described a fined-tuned toolset that could accurately differentiate ovarian cancer biomarkers from biomarkers in individuals who are cancer-free.

“Here we show that a ‘disease fingerprint’—acquired via machine learning from the spectra of near-infrared fluorescence emissions of an array of carbon nanotubes functionalized with quantum defects—detects high-grade serous ovarian carcinoma in serum samples from symptomatic individuals with 87% sensitivity at 98% specificity (compared with 84% sensitivity at 98% specificity for the current best [clinical laboratory] screening test, which uses measurements of cancer antigen 125 and transvaginal ultrasonography,” the researchers wrote.

“We demonstrated that a perception-based nanosensor platform could detect ovarian cancer biomarkers using machine learning,” said Yoona Yang, PhD, a postdoctoral research associate in Lehigh’s Department of Chemical and Biomolecular Engineering and co-first author of the Science Advances article, in the news release.

How Perception-based Machine Learning Platforms Work

According to Yang, perception-based sensing functions like the human brain.

“The system consists of a sensing array that captures a certain feature of the analytes in a specific way, and then the ensemble response from the array is analyzed by the computational perceptive model. It can detect various analytes at once, which makes it much more efficient,” Yang said.

The “array” the researchers are referring to are DNA strands wrapped around single-wall carbon nanotubes (DNA-SWCNTs).

“SWCNTs have unique optical properties and sensitivity that make them valuable as sensor materials. SWCNTS emit near-infrared photoluminescence with distinct narrow emission bands that are exquisitely sensitive to the local environment,” the researchers wrote in Science Advances.

“Carbon nanotubes have interesting electronic properties,” said Daniel Heller, PhD, Head of the Cancer Nanotechnology Laboratory at Memorial Sloan Kettering Cancer Center and Associate Professor in the Department of Pharmacology at Weill Cornell Medicine of Cornell University, in the Lehigh University news release.

“If you shoot light at them, they emit a different color of light, and that light’s color and intensity can change based on what’s sticking to the nanotube. We were able to harness the complexity of so many potential binding interactions by using a range of nanotubes with various wrappings. And that gave us a range of different sensors that could all detect slightly different things, and it turned out they responded differently to different proteins,” he added.

The researchers put their technology to practical test in the second study. The wanted to learn if it could differentiate symptomatic patients with high-grade ovarian cancer from cancer-free individuals. 

The research team used 269 serum samples. This time, nanotubes were bound with a specific molecule providing “an extra signal in terms of data and richer data from every nanotube-DNA combination,” said Anand Jagota PhD, Professor, Bioengineering and Chemical and Biomolecular Engineering, Lehigh University, in the news release.

This year, 19,880 women will be diagnosed with ovarian cancer and 12,810 will die from the disease, according to American Cancer Society data. While more research and clinical trials are needed, the above studies are compelling and suggest the possibility that one day clinical laboratories may detect ovarian cancer faster and more accurately than with current methods.   

—Donna Marie Pocius

Related Information:

Perception-Based Nanosensor Platform Could Advance Detection of Ovarian Cancer

Perception-Based Nanosensor Platform to Detect Cancer Biomarkers

Detection of Ovarian Cancer via the Spectral Fingerprinting of Quantum-Defect-Modified Carbon Nanotubes in Serum by Machine Learning

Machine Learning Nanosensor Platform Detects Early Cancer Biomarkers

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