Theranos founder and CEO Elizabeth Holmes announced on Oct. 5 that the blood testing company would close its laboratories and wellness centers in Arizona, California and Pennsylvania.
Theranos also plans on laying off 340 employees, according to Holmes’s letter, which was published on the company’s website. The Wall Street Journal reported that Theranos had 790 full-time employees as of Aug. 1.
In July, the Centers for Medicare & Medicaid Services (CMS) revoked the certification for Theranos’s blood testing laboratory in Newark, California. CMS also prohibited Holmes from owning, operating or directing a laboratory for at least two years.
Theranos said in August that it would appeal the CMS sanctions.
Holmes explained in the letter that the company would focus on its miniLab device, which is not yet FDA-approved. She said in August that the device could run tests from a finger prick.
“We will return our undivided attention to our miniLab platform,” Holmes wrote in the letter. “Our ultimate goal is to commercialize miniaturized, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, pediatrics, and intensive care.”
Theranos was once valued at $9 billion and was heralded as an innovative company that was developing a device to collect blood samples through a finger prick. However, a CMS investigation found problems at the company’s facilities, while the Wall Street Journal reported on several technological and regulatory issues with the company. Questions also arose about the accuracy of the tests.
Since CMS announced its sanctions against Theranos, the company has taken steps to enhance its reputation and survive as a company. The company hired two executives to lead its regulatory, quality, while its board of directors established compliance departments and created a compliance and quality committee.
“We have a new executive team leading our work toward obtaining FDA clearances, building commercial partnerships, and pursuing publications in scientific journals,” Holmes wrote in the letter. “We are fortunate to have supporters and investors who believe deeply in our mission of affordable, less invasive lab testing, and to have the runway to realize our vision. I look forward to sharing more with you as we progress along the way.”
Executive Editor
Tim Casey joined TriMed Media Group in 2015 as Executive Editor. For the previous four years, he worked as an editor and writer for HMP Communications, primarily focused on covering managed care issues and reporting from medical and health care conferences. He was also a staff reporter at the Sacramento Bee for more than four years covering professional, college and high school sports. He earned his undergraduate degree in psychology from the University of Notre Dame and his MBA degree from Georgetown University.