Theranos founder and chief executive Elizabeth Holmes, a 32-year-old Stanford dropout who claims her aversion to needles led her to invent proprietary blood testing technology requiring just a pin-prick, faces a two-year ban from the business of blood-testing if her Palo Alto-based company doesn't fix problems with its Newark, California lab.

As has most of the damning news about the healthcare startup once valued at $9 billion dollars, word of the possible sanctions came via the Wall Street Journal, who obtained a letter from the Centers for Medicare and Medicaid Services. That letter, dated to March, threatened to revoke the federal license for Theranos' California lab and impose sanctions on Holmes and the lab's other owner, Theranos' president and Holmes' right-hand man Sunny Balwani, who would face the same two-year industry ban.

Theranos' unravelling may have been set in motion after a doubting Thomas article appeared in the Wall Street Journal last October questioning the abilities of the company's technology as used in the form of a device code-named "Edison" (a name that doesn't strike me as atypically grandiose, by Silicon Valley standards, in its implicit comparisons).

A month later, in November, Theranos had already lost a major deal with Safeway, the Journal also wrote. Then, in December, government health regulators began more formal investigations in response to two former Theranos employees who came forward with similar questions about the stability and accuracy of Theranos' methods.

When we last checked at the end of January, a letter to the company's Newark lab gave Theranos just 10 days to show "acceptable evidence of correction" to what were, at the time, deemed conditions that posed "immediate jeopardy to patient safety." Apparently those weren't fully addressed, leading to the recent call for potential sanctions. As the Business Times observes, the nature of those sanctions could be more minor — a ban and shutdown are the most severe that could be taken against Theranos and its leadership.

“Due to the comprehensive nature of the corrective measures we’ve taken over the past several months, which has been affirmed by several experts, we are hopeful that CMS won’t impose sanctions," Brooke Buchanan, a company spokesperson, told the Journal. "But if they do, we will work with CMS to address all of their concerns.”

Regardless of the outcome, which could be appealed and not necessarily immediate in its repercussions, Wired contextualizes the damage to Theranos' brand. "This is bad, bad news," they write,"for a company whose brand is already facing serious problems."

Previously: Labs For Healthcare Startup Theranos Present 'Immediate Jeopardy To Patient Safety'
Health Regulators Investigating Complaints Against Healthcare Startup Theranos From Former Employees