Theranos to shutter blood-testing sites, cutting 340 jobs

Palo Alto, Calif.-based Theranos plans to close its blood-testing facilities, resulting in layoffs for more than 40 percent of its workforce, according to The Wall Street Journal.

In a statement posted on the Theranos website late Wednesday, company founder and CEO Elizabeth Holmes said the blood testing startup will close clinical labs and Theranos Wellness Centers, which will impact approximately 340 employees in Arizona, California and Pennsylvania. 

She went on to say the company will return its focus to a new blood-testing device called miniLab.

"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," Ms. Holmes said.

She also noted in the statement that the company has a new executive team leading its work toward obtaining clearances from the Food and Drug Administration, building commercial partnerships, and pursuing publications in scientific journals.

"We are fortunate to have supporters and investors who believe deeply in our mission of affordable, less invasive lab testing, and to have the runway to realize our vision. I look forward to sharing more with you as we progress along the way," she said.

Wednesday's Theranos announcement marks a move away from the company's core strategy of providing an array of low-price blood tests directly to consumers, according to The Wall Street Journal. That core strategy, according to the report, was already endangered by regulatory sanctions that followed revelations by The Wall Street Journal of shortcomings in Theranos's technology and operations.

Theranos has labs in Newark, Calif., and Scottsdale, Ariz., as well as five blood-drawing sites that send samples to the Arizona lab. The California lab has been closed since CMS revoked the company's lab certificate, a decision Theranos is appealing, according to the report.

As part of its recently announced restructuring, Theranos will now completely shut down those operations, according to the report.

Meanwhile, the company, in its appeal of regulatory sanctions, asked HHS’ Departmental Appeals Board to conduct a hearing, appeals official Eric Lester told The Wall Street Journal. The proceedings are scheduled to begin Dec. 1, at which time CMS must reveal its evidence and arguments against Theranos, Mr. Lester told the publication.


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