Blood-Testing Company Theranos Gives Up On That Whole Blood-Testing Thing

Image courtesy of Theranos

When your blood-testing company gets called out for lying about tests, loses its retail partnerships, and has stiff sanctions put on it by the feds, well, it’s a good sign that you probably shouldn’t be in the blood-testing biz anymore. And so, after a rough year, Theranos is backing out of the blood-testing business.

CEO Elizabeth Holmes made the announcement in the form of an open letter on the company’s website.

“After many months spent assessing our strengths and addressing our weaknesses,” Holmes writes, “we have moved to structure our company around the model best aligned with our core values and mission.”

To that end, Theranos will be closing all its clinical labs and wellness centers, cutting 340 jobs in Arizona, California, and Pennsylvania. The company is going to focus exclusively on building lab testing hardware.

The company has “a new executive team leading our work toward obtaining FDA clearances, building commercial partnerships, and pursuing publications in scientific journals,” Holmes adds.

All of those are notable steps for Theranos, which got where it is today by largely operating on its own, outside of things like “FDA approval” and “actually proving our thing works.”

The news is, perhaps, the least surprising thing to happen since the sun rose in the East this morning; Theranos has been embattled, let’s call it, for many months.

Reports surfaced early this year that Theranos was basically faking their claims about their equipment and testing procedures. While the entire point of using Theranos was to use its own blood-testing tech, the company was performing a significant number of tests using other companies’ equipment… and the tests that it ran on its own proprietary Edison machine did not meet accuracy requirements.

In May, the company had to void two years’ worth of test results that may have been flawed. In June, Walgreens backed out of the partnership that would have seen it launching Theranos centers nationwide.

And in July, federal regulators imposed stiff sanctions on the company: Theranos had its hematology certification curtailed and lost its ability to bill Medicaid and Medicare for providing blood-testing services. It also had to pay a fine to the feds.

In addition to the limitations on Theranos, regulators banned Holmes herself from owning equity in or operating any blood-testing lab for at least two years. That basically left her two choices: quit the company she built and let it try to sort its way through the lingering mess, or take the company out of the testing business.

Evidently, she went with the latter.