Elizabeth Holmes, founder and CEO of the biotechnology company Theranos, has been banned from running her lab operations for two years by US federal officers on account of false claims and low-quality laboratory practices. The certification of Theranos labs has also been revoked by the government. The development was announced by the company during a recent press release.
Theranos is a California-based biotechnology company which runs blood testing laboratories claiming to have revolutionized the blood testing industry with the creation of innovative technology. According to Theranos, their cutting-edge technology has made it possible to carry out numerous blood tests using just a few drops of blood.
Theranos was founded by Holmes in 2003 after she dropped out of Stanford University at the age of 19. Theranos gradually started making a name for itself in the biotechnology world and by 2014, the corporation was worth a whopping $9 billion. Holmes herself was valued at $4.7 Billion and was even likened to tech innovators such as Steve Jobs due to her uncanny business activity and fondness of black turtlenecks.
However, ever since reports of misconduct appeared last year, not all has been well at Tharanos. In the fall of 2015, Theranos was accused of using its advanced technology on an extremely small number of blood tests implying the company was still using standard tests and devices manufactured by others to test the blood samples they received.
The accusations resulted in an inspection of the company’s laboratory in California by federal regulators. Following the inspection, Theranos was sent a warning letter by the Centers for Medicare and Medicaid Services (CMS), which stated their labs were not on par with federal rules. The company was also found to practice ways which may pose “immediate jeopardy to patient health and safety”, since it was found their blood clotting tests were being performed inaccurately. The warning further stated if the raised concerns were not dealt with, the laboratory’s working license would be revoked and all Theranos officials would be sanctioned.
After the ban imposition, Theranos has revealed the company will also have to pay federal officials an unspecified penalty. The ban is not exclusive to Theranos only but also prohibits Holmes and other owners from working in any laboratory for the next two years at least.
Holmes, for her part, has accepted full responsibility for the problems detailed by federal agencies. She promised to renew the lab along with providing new leadership after the ban is lifted. Theranos has also promised to enhance their quality and training procedures in these two years.
“While we are disappointed by CMS’ decision, we take these matters very seriously and are committed to fully resolving all outstanding issues with CMS and to demonstrating our dedication to the highest standards of quality and compliance,” said Holmes.
Although Theranos seems to be in a pickle right now, this may not be the end of the line for the biotech startup. It seems the laboratory division was just one of many operations run by the corporation and according to their press release, they have developed numerous other technologies which will keep them running.
The press release stated, “The clinical lab is just one of Theranos’ many opportunities to provide access to high-integrity, affordable and actionable health care information, and the company will continue to carry out its mission under the leadership of its founder and CEO, Elizabeth Holmes.”
Likewise, the federal inquiry had issue with the way Theranos’ labs were being run and not with the machines created by Theranos. One option for the company could be to sell their high-tech blood testing machines to another laboratory.