This is the second lab operated by Palo Alto, Calif.-based Theranos that has lost its testing license in less than a year. The company’s main lab in California had its license revoked in July, a penalty it is appealing, according to the report.
Theranos also shut down its California and Arizona labs in October, resulting in layoffs of 40 percent of its workforce, in a move to focus on a new blood-testing device called miniLab.
The latest sanctions stem from a CMS inspection in September, about a week before Theranos disclosed its plans to shut down its lab operations. Regulators warned Theranos on Oct. 14 that its practices put patients in “immediate jeopardy” of harm, according to the report. Although the company proposed a plan to correct its flaws in November, regulators rejected it. In the Jan. 27 letter, a regulator told Theranos it couldn’t avoid the penalties by closing the lab. The company said it decided to shutter the Arizona lab before the inspection, according to the report.
Theranos has 60 days to appeal the most recent sanctions. If it doesn’t, or if the California sanctions are upheld, Elizabeth Holmes, the company’s founder, and lab directors would be prohibited from operating any lab for at least two years, according to the report.
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