The blood-testing startup Theranos is now firmly in disgrace. Founder Elizabeth Holmes was indicted Friday on federal wire fraud charges and has resigned as the company’s CEO. But whatever happens with Holmes and Theranos, the episode has changed the conversation around biotech investing. Michael Greeley is general partner of Flare Capital Partners in Boston, which specializes in funding health care technology companies. He spoke with Marketplace Tech host Molly Wood about what Theranos' downfall means to the industry overall. The following is an edited transcript of their conversation.
Michael Greeley: Why I was so furious at the Theranos example was if it sets back the field of rapid point-of-care testing in molecular diagnostics, that'll be very devastating to the field. And so a lot of investors now may just say simply, "This is too hard. [Holmes has] proven that it can't be done," and they'll back away and they'll go invest in other areas. If what she's done is caused innovation to be retarded and capital not going into the category or scientists moving away from the category, that could be potentially catastrophic.