Fearless Theranos Eyes Expansion Despite Dealing with One Setback After Another

Fearless Theranos Eyes Expansion Despite Dealing with One Setback After Another May 20, 2016
By Alex Keown, BioSpace.com Breaking News Staff

PALO ALTO, Calif. – It seems that embattled blood-testing company Theranos is not one to let a crisis go to waste and is looking at bringing on approximately 200 new employees and expanding its operations into Pennsylvania, despite increasingly troubling reports about its lab facilities in California.

On its website, Theranos is advertising for multiple positions, including assistants for Theranos founder and chief executive officer, Elizabeth Holmes. However, there are also a number of construction positions posted for Harrisburg, Penn., which lends to rumors about Theranos making a move to expand to the east coast from its base of operations in California and Arizona.

However, such a move could be in jeopardy after it was revealed that Theranos invalidated results for 2014 and 2015 and has issued “tens of thousands” of corrected blood testing results to patients and doctors.

Following an initial and excoriating review of Theranos’ Newark, Calif. laboratory, Theranos said it had “voided results associated with any findings that were not consistent with the quality standards the lab holds itself to today, under our lab’s new leadership.”

According to reports, Theranos re-performed the blood tests, but did not use its own proprietary Edison blood testing technology, instead using more traditional laboratory equipment. Theranos’ Edison machines were once called revolutionary and supposedly able to determine a number of medical diagnostic questions based on a single drop of blood. However, the efficacy of the blood testing devices have been called into question a number of times over the past year. In April, the U.S. Department of Justice launched a criminal investigation into the company, with investigations centering on whether Theranos and its executives misled investors about the efficacy of its blood-testing products.

In a lightly redacted 45-page letter dated March 18 detailing those concerns, the CMMS repeatedly used the bold-texted phrase “The laboratory’s allegation of compliance is not credible and the evidence of correction is not acceptable.” The phrase is used to indicate how Theranos failed to meet federal Clinical Laboratory Improvement Amendments (CLIA) guidelines. While many of the errors could be considered minor, the overwhelming number is concerning—something CMMS investigators noted in their letter.

The addition of about 200 new jobs is an increase of about 20 percent in employment at Theranos. However, Brooke Buchanan, vice president of communications for Theranos, told StatNews that the number of open spots is not indicative of a mass exodus of employees leaving the company in the wake of the plethora of negative reports about it. Instead, Buchannan said the positions are a “shift in focus” to support new initiatives the company announced earlier this month. Theranos announced a restructuring plan where the company will have “focuses on both the R&D and clinical lab,” which included the addition of three new members to its board of directors with a wealth of scientific experience.

Theranos added Fabrizio Bonanni, a former senior executive at Amgen in charge of quality and compliance; William H. Foege, an epidemiologist and former director of the U.S. Centers for Disease Control and Prevention; and Richard M. Kovacevich, a former chief executive officer of Wells Fargo & Co. Foege and Kovacevich previously served on Theranos’ Board of Directors before joining its Board of Counselors, an advisory group. An additional part of that restructuring resulted in the departure of Theranos’ president and chief operations officer Sunny Balwani, as he and founder Elizabeth Holmes learned they faced a possible federally-mandated two-year suspension from the blood testing industry over failures to address deficiencies at lab facilities in California.

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