Theranos Says Elizabeth Holmes Will Remain CEO, But it May Stop All Lab Operations

Published: Jul 13, 2016

Theranos Says Elizabeth Holmes Will Remain CEO, But It May Stop All Lab Operations July 11, 2016
By Alex Keown, Breaking News Staff

PALO ALTO, Calif. – Although suspended for two years from operating a blood-testing laboratory, Theranos’ Chief Executive Officer Elizabeth Holmes will remain as the head of the company, the company said Friday afternoon following the ruling from the U.S. Center for Medicare and Medicaid Services (CMMS).

Theranos said it will consider all options as it moves forward with Holmes at the helm, which could include shutting down its clinical labs.

“The clinical lab is just one of Theranos' many opportunities to provide access to high-integrity, affordable and actionable health care information, and the company will continue to carry out its mission under the leadership of its founder and CEO, Elizabeth Holmes,” Theranos said.

In its statement Theranos said its Newark, Calif. clinical lab is just a small part of its business, which includes “small-volume sample assays, capillary collection and testing capabilities, the ability to test small-volume samples on a variety of different platforms (high-throughput and field devices), and a software suite for testing analysis and decision support.”

The company said the CMMS decision was “difficult to hear,” but it will work to resolve the issues raised by the federal regulators.

There is little information yet about how the federal ruling is impacting the company and its employees, although late in June, Brooke Buchanan, Theranos’ vice president of communications, stepped down from her role in the company. In a statement to the San Francisco Chronicle, Theranos said Buchanan left for personal reasons, but her departure came at a time when Theranos is facing intense pressure from the public and faces criminal investigations on whether or not Theranos and its executives misled investors about the efficacy of its blood-testing products. The company also faces several lawsuits from individuals following Theranos’ decision to void two years’ worth of blood-testing data sent to customers. Congress has also weighed in, with one committee seeking information about that decision to void the data.

While the company touts its “broad range of technologies,” some employees who spoke anonymously with the Wall Street Journal, said most of those concepts have not been developed beyond laboratory research. Throughout the months Theranos has been under intense scrutiny, Holmes has attempted to put a positive spin on company matters, but has largely kept employees in the dark under a tight veil of secrecy, the Wall Street Journal said. That veil of secrecy has led some employees to lose trust in the company, according to those who spoke with the Wall Street Journal.

The loss of Buchanan was something of a blow to the company that is known for attempts to tightly control its message and public perception. When the CMMS was about to issue its findings earlier this year, Theranos’ lawyers attempted to force the agency to redact large portions under the guise of trade secrets, the Wall Street Journal noted. Employees, including members of the board of advisers are required to sign fairly strict nondisclosure agreements as well, the Wall Street Journal noted.

In addition to tightly controlling its narrative, Theranos has also kept its own research data under wraps. Earlier this summer, Holmes announced she was prepared to make the company’s first major presentation at the American Association for Clinical Chemistry's annual conference on Aug. 1. This will be the first time that Theranos has publicly shared its own scientific data. However, that too is turning out to be a problem for the company. Theranos has insufficient data and is currently running new studies to collect data to present, according to Wall Street Journal.

At one point Theranos was valued at $9 billion. However, Forbes recently valued the company at closer to $800 million. Forbes also speculated that Holmes is now worth “nothing.”

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