The first results from an investigation into Palo Alto-based healthcare technology startup Theranos are in, and they aren't favorable for the health of the formerly whinnying Silicon Valley Unicorn.
The blood-sampling technology upon whom aspersions were first cast by the Wall Street Journal in October has recently been under investigation from the Centers for Medicare and Medicaid Services following the complaints of a former employee.
Now the Verge reports that a letter sent to Theranos on January 25th gives the company's Newark, California lab just 10 days to provide "acceptable evidence of correction." Currently, those laboratories pose "immediate jeopardy to patient safety." The "condition-level deficiencies" noted in the correspondence are among the most serious the Centers can assign.
Issues include problems with the lab's technical supervisor, its hematology, and its analytic systems. The Centers might altogether cancel the lab's approval for Medicare payments, or instead invoke fines of $10,000 per day "if jeopardy is not removed and the laboratory does not come into Condition-level compliance."
In a statement to Business Insider, Theranos responded.
This survey of our Newark, CA lab began months ago and does not reflect the current state of the lab. As the survey took place we were simultaneously conducting a comprehensive review of our laboratory's systems, processes and procedures to ensure that we have best-in-class quality systems. We value engagement with our regulators, and are committed to ensuring that all our labs operate at the highest standards. We are still reviewing the report, but we addressed many of the observations during the survey and are actively continuing to take corrective action.
The letter is the latest in a series of setbacks for Theranos, a company not long ago valued at $9 billion. “Agencies have a process for evaluating complaints, " a Theranos spokesperson said at the time the investigation from the Centers for Medicare and Medicaid Services was made known, "and many complaints are not substantiated. We trust our regulators to properly investigate any complaints, and we look forward to continuing our strong and productive relationships with them.”