That same device and its testing method became the center of a controversy following a Wall Street Journal report a year ago.
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United States regulators have banned Elizabeth Holmes, the chief executive of Theranos, from owning or operating a medical laboratory for at least two years, in a major setback for the embattled blood-testing firm and its once widely lauded founder.
The Silicon Valley company announced the sanctions, by the Centers for Medicare and Medicaid Services, in a news release late Thursday night.
Holmes censure, first noted in the Wall Street Journal, is based on a regulatory review of Theranos Newark California lab and includes a monetary penalty of an unspecified amount.
The company also has been barred permanently from receiving “Medicare and Medicaid payments for all laboratory services” as part of the sanctions.
“We accept full responsibility for the issues at our laboratory in Newark, California, and have already worked to undertake comprehensive remedial actions”, Holmes said in a statement.
In May, The Wall Street Journal reported that Theranos had voided all results for tests run on its proprietary Edison device in 2014 and 2015, and that it had corrected some blood coagulation tests performed in a second laboratory it operates in Scottsdale, Ariz. During this period, the company will continue to work with CMS to resolve and remediate outstanding issues in the Newark lab, and will continue to provide services to its customers through its Arizona lab.
She added that the company would shut down the Newark facility and rebuild it from the ground up. Prior to this unraveling, the company was valued at $9 billion, while Holmes’ net worth dropped from $4.5 billion to zero in a Forbes evaluation just last month.
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The Securities and Exchange Commission began an investigation in April to determine whether Theranos misled investors about the power of its technology.
