Athelas co-founder says blood-testing startup 'won't be another Theranos'

Tanay Tandon, co-founder of Mountain View, Calif.-based Athelas, said he incorporated the lessons learned through the meteoric rise and fall of Palo Alto, Calif.-based Theranos to ensure Athelas' fate doesn't mimic that of Elizabeth Holmes' blood-testing company, Bloomberg reports.

The company, named for a popular healing plant featured in the "Lord of the Rings" franchise, manufactures a black cylinder, aesthetically similar to Amazon's Echo device, that can run a complete blood-cell count from a finger prick test. Mr. Tandon, along with co-founder Deepika Bodapati, raised $3.7 million from investors for their startup thus far.

The collapse of Theranos resulted from significant press coverage of the company, but little information as to how its devices functioned, the report states. When Theranos' innovations proved false, the company's value fell dramatically. To avoid the pitfalls faced by its predecessor, Athelas published initial data comparing traditional laboratory results to Athelas' results. Mr. Tandon said Athelas may be able to provide greater precision than standard testing because the technology relies on machine learning, manually feeding the computer "thousands of images of blood cells labeled by pathologists and fed … to computers to train them to distinguish between different types of cells," according to the report.

Mr. Tandon said the company submitted data to the U.S. Food and Drug Administration and hopes to receive clearance for the product this year. Until the FDA approves the product, patients can use the device as long as a pathologist verifies the results.

Two "major" pharmaceutical companies have reportedly expressed interest in exploring the device. However, Mr. Tandon refused to identify either organization to Bloomberg.

"It's pretty demoralizing to get into the car, drive three hours to be told your blood count's too low, please come back next week," Scott Kopetz, MD, PhD, an assistant professor in the department of gastrointestinal medical oncology at Houston-based MD Anderson Cancer Center, told Bloomberg. "Reducing those cases could be a benefit."

However, the device is not covered by insurance, meaning patients must pay $20 per month for testing services. Some physicians may also reject the device if it isn't compatible with their institution's existing EHR system or allows the patient to bypass a clinic appointment, which may affect a provider's revenue intake, according to the report.

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