Theranos Now Under Criminal Investigation
The plot continues to thicken for Theranos. As the California-based startup tries to strain toward greater transparency, it is now apparently the subject of a criminal investigation. Both the Wall Street Journal and the New York Times have reported that federal law enforcement officials have been examining whether officials at Theranos may have misled investors […]
The plot continues to thicken for Theranos. As the California-based startup tries to strain toward greater transparency, it is now apparently the subject of a criminal investigation. Both the Wall Street Journal and the New York Times have reported that federal law enforcement officials have been examining whether officials at Theranos may have misled investors about the state of its technology and the progress it was making in developing it.
In a statement, Theranos said it “continues to work closely with regulators and is cooperating fully with all investigations.”
That the company is under criminal investigation is merely the latest of its problems. They include faults with its platform to perform laboratory tests with just a few drops of blood. Theranos has approval from the U.S. Food and Drug Administration to perform a single assay using the technology, although it apparently conducted testing on other widely available commercial platforms under the guise of using its own equipment. The Centers for Medicare & Medicaid Services has declared that Theranos’ laboratory in Northern California poses an immediate danger to patients because of a variety of faults in both equipment and management of the facility. Moreover, CMS has rejected many of Theranos’ corrective actions to address the issues and is moving to shut the lab down and possibly ban Chief Executive Officer and company founder Elizabeth Holmes and President Sunny Balwani from operating any laboratory for two years. And while Holmes and her Theranos employees had been highly secretive about its testing technology, that veil could be lifted shortly. The American Association for Clinical Chemistry recently announced that Holmes will present testing data at its 68th annual scientific meeting in Philadelphia on Aug. 1.
“There is no better place to present Theranos’ technology than at the AACC Annual Scientific Meeting, where leaders in laboratory medicine can evaluate Ms. Holmes’ data and research,” said AACC CEO Janet B. Kreizman in a statement. “AACC members have been asking for this information, and we are thrilled that Ms. Holmes is presenting the science behind the technology for the first time at AACC.”
Takeaway: The downward spiral of Theranos is being accelerated by a potential criminal investigation.