Health technology startup Theranos announced Wednesday that it will close all its blood-testing labs and wellness centers across the country following a series of hurdles.
“After many months spent assessing our strengths and addressing our weaknesses, we have moved to structure our company around the model best aligned with our core values and mission,” CEO Elizabeth Holmes said in a blog post on the company’s website. The move will put “approximately 340 employees in Arizona, California, and Pennsylvania” — approximately 44 percent of the 790 full-time employees — out of jobs.
The shuttering of the labs and centers is set to pave the path for the company to concentrate on its flagship innovation, the miniLab. The new blood-testing device — about the size of a printer — was announced in August but is yet to gain approval from federal regulators following a failed bid for Zika detectors that was denied by the U.S. Food and Drug Administration.
“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,” Holmes explained.
The shift in strategy comes a year after the Wall Street Journal launched an investigation into the company’s technology, which is based on the Edison machine. Regulators from the Centers for Medicare and Medicaid Services found the blood-testing methods used by Theranos as inaccurate, causing them to announce sanctions against the company. Theranos, which was valued at $9 billion in 2014, was forced to shut down its California lab facility after the company’s license to operate it was revoked in July. Holmes has been banned from operating any of her labs for two years. Theranos is appealing the move.
The Palo Alto-based company has labs in Newark, California, and Scottsdale, Arizona, along with five blood-drawing sites from where samples are sent to the Arizona lab. Amid the controversy surrounding the legitimacy of its technology, Theranos also lost its partnership with Walgreens drugstores, which closed all of its collaborative blood-collection locations in June.
“We have a new executive team leading our work toward obtaining FDA clearances, building commercial partnerships, and pursuing publications in scientific journals,” Holmes said in the post, thanking “supporters and investors” for continued support.