Theranos has been in hot water lately for under-delivering on its promise to revolutionize blood tests — and this week, it seems, one more thing didn’t work quite like it was supposed to for the embattled company.
Chief executive Elizabeth Holmes was scheduled to host a fundraiser for Hillary Clinton at Theranos’s headquarters in Silicon Valley on Monday. But in an abrupt about-face, the campaign relocated the event to the private home of a tech entrepreneur.
Here's Chelsea Clinton w/ Elizabeth Holmes, CEO of Theranos, at the campaign's San Francisco fundraiser today: pic.twitter.com/YHvY4HH2QP
— Ruby Cramer (@rubycramer) March 21, 2016
The change followed a storm of rough publicity last week as outside analysts pondered whether the Theranos connection could become a political liability for Clinton — and perhaps cast a bad light on the company itself.
“Perhaps there was a potential embarrassment factor at work here,” Mary Pendergast, a former commissioner at the Food and Drug Administration who is now an industry consultant, told STAT.
Just last week, emails to potential donors went out inviting them to a “conversation with Chelsea Clinton,” which was to be “hosted by Elizabeth Holmes.” The top ticket price: $2,700.
Chelsea Clinton, a graduate of Stanford, which is close to Theranos headquarters in Palo Alto, is still expected to attend. And Holmes will still speak, as will Heather King — a former Clinton adviser who now serves as Theranos’s general counsel. They will be joined by nine other top women in Silicon Valley, according to CNBC, which first reported the venue change.
The Clinton campaign declined to comment on the event.
A source familiar with the fundraiser told STAT that initial invitations are often distributed while host committees are being formed and venues finalized.
In this case, the source insisted that the location was never actually set — although the Clinton campaign never denied sending an email out to potential guests listing the event as taking place at Theranos. The tech news site Re/code was the first to report on those emailed invitations.
Another source familiar with the situation said the fundraiser “was intended to be and will be an event for women entrepreneurship.”
“Neither side wanted this ever to be a Theranos event,” the source said.
Given how toxic Theranos is these days, onlookers say the Clinton campaign was wise to change venues.
“This is a company on the hot seat,” said Ira Loss, an industry analyst with Washington Analysis, referring to the questions swirling over Theranos’s blood-testing technology. “They made a mistake by agreeing to be there in the first place.”
Hank Greely, who heads the Center for Law and the Biosciences at Stanford Law School, agreed that it made sense for the Clinton campaign to pull back from Holmes and Theranos.
“All in all, it seems like a decent recovery from what might have been a small teapot tempest,” he said.
The initial choice of Theranos headquarters for the event reflects the many ties between Holmes and the Clintons. William Perry, who served as defense secretary in Bill Clinton’s administration, is a Theranos board member. And last year, Holmes participated in two health care summits that were sponsored by the Clinton Foundation.
As for Theranos, the episode may become one more headache. In the past few months, pharmacies have pulled their partnerships, regulators have launched investigations, and investor lawsuits are pending.
“It would’ve been a good move for Theranos if Holmes could’ve pulled it off” and held the fundraiser, said Steve Brozak of WBB Securities, who follows the biotech industry. “But being rebuffed is not the signal you want to send, and so this creates yet another perception problem. Now they’ve become a high-profile political football, too.”
Dylan Scott contributed reporting.