Elizabeth Holmes, the embattled CEO of blood testing company Theranos announced last night in a letter to company stakeholders that the startup she founded will abandon its core mission and will no longer test blood. This is the latest, and perhaps most stunning, admission of defeat from a once superstar sitting atop a business previously valued at $9 billion.
"We have decided to close our clinical labs and Theranos Wellness Centers, which will impact approximately 340 employees in Arizona, California, and Pennsylvania," explained Holmes — lightly touching on the lay offs. "We will return our undivided attention to our miniLab platform. Our ultimate goal is to commercialize miniaturized, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, pediatrics, and intensive care."
The move away from grand promises of cheap and easy tests requiring just a pin-prick of blood follows a two-year ban issued by the Centers for Medicare and Medicaid Services which prevents Holmes from owning or operating a blood testing facility. That decision followed reports that the technology touted by Holmes didn't work as advertised.
Consumerist reports that Theranos was forced to void two years worth of lab results in May due to concerns about their accuracy. Shortly thereafter in July, the Business Times informs us that CMS revoked the Theranos lab certificate and ended Medicare and Medicaid payments to the company.
Holmes founded Theranos in 2003 and raised $686 million in capital. Cracks began to show after a deep investigative dive by a Wall Street Journal reporter John Carreyrou called many of the company's claims into question.
"We have a new executive team leading our work toward obtaining FDA clearances, building commercial partnerships, and pursuing publications in scientific journals," explains Holmes of her path forward — marking a huge change for a company notable for its secrecy and FDA avoidance. As the Wall Street Journal reported in October of last year, because Theranos wasn't selling its Edison testing machines to other labs, FDA approval wasn't required.
It is the manufacture of lab-testing hardware like the Edison, reports Consumerist, that Theranos will now focus on.
Last night's announcement from Holmes will, without a doubt, end up as a significant moment in the story of her life — currently being turned into a film starring Jennifer Lawrence.