- Theranos founder and CEO Elizabeth Holmes, speaking in front of an audience of industry experts at the American Association for Clinical Chemistry conference Monday, had been expected to present a rare public glimpse into some of the science behind Theranos' proprietary blood-testing technology. Instead, she introduced a new product.
- Holmes unveiled a new device, called the "miniLab", which promises to process blood samples across a number of different testing methods all in one small, roughly printer-size machine. While she presented internal data on the performance of capillary blood draws tested on the miniLab, the device and technologies are not approved by the Food and Drug Administration.
- U.S. regulators recently banned Holmes from the blood-testing business for two years and stripped the certification from one of Theranos' two central laboratories for testing violations and inaccuracies tied to the company's earlier "Edison" device.
Before its regulatory troubles, Theranos had become a vaunted Silicon Valley 'unicorn' on the promise of testing for scores of conditions from a single finger-prick of blood. Those tiny blood samples were analyzed through the company's proprietary testing device known as Edison.
But federal inspections and reporting by the Wall Street Journal began to poke holes in that story, leading to intense scrutiny and questions over the accuracy of the tests.
Inspections of Theranos' Newark, California facility by the Centers for Medicare and Medicaid Services last fall uncovered serious deficiencies in the company's blood-testing practices. Theranos worked to address those concerns, going as far as voiding and revising tens of thousands of blood tests conducted between 2014 and 2015.
But federal regulators were unimpressed. In early July, CMS opted to ban Holmes from owning or operating a medical laboratory for at least two years and revoked the Newark lab's CLIA certification. Both sanctions are set to take effect September 5, although Theranos can appeal the penalties.
If enacted, though, the sanctions would likely prompt major changes to Theranos' business model. Theranos acknowledged that losing the CLIA certification for the Newark lab would also mean the company could not operate its Arizona lab, where most test samples have been analyzed.
When the sanctions were handed down, Theranos had hinted it could continue to function as a company even without running central laboratories.
"Clinical lab services is one of Theranos’ business units. Its research and development unit has developed many technologies that are not dependent on running a clinical laboratory," the company said at the time.
Holmes presentation Monday at the AACC conference continued in that vein, focusing on the future rather than trying to address recent problems.
"We’re pleased to share our technologies with the entire laboratory industry. It’s the beginning of the next phase of the company, as we introduce our technologies to the world. We also will be working with academic institutions and other independent parties to validate and publish our results,” Holmes said Monday.
The minLab device is reportedly considered a "successor" to the Edison device by those inside the company, according to The Wall Street Journal. Theranos said the miniLab could be used in a "decentralized setting," rather than in a large laboratory.
But Holmes was criticized for not addressing the flaws in Theranos current testing practices or offering any peer-reviewed science behind either Edison or the new miniLab device.
Theranos will also need to get FDA approval for the miniLab, and for each individual test run on the device. The company said it had submitted data for a Zika virus test run on the miniLab to the FDA for Emergency Use Authorization, which is a lower bar than full approval.
Theranos looks like its trying to set itself up for a future where it may be shut out of the laboratory business. But without answering the very serious questions raised about its past, Holmes could be inviting even more skepticism.