- Theranos, the embattled blood-testing company whose founder faces a ban from the business, said on Thursday it would appeal sweeping sanctions handed down by federal regulators last month.
- Patient testing at the Newark, California lab cited by the Centers for Medicare and Medicaid Services (CMS) was halted in July, leaving Theranos' Arizona facility as the only site currently processing blood samples. If CMS sanctions take effect in full, however, Theranos would be prevented from operating any labs for 2 years—effectively pushing the company out of clinical lab services.
- The sanctions, which also include a two-year ban for founder Elizabeth Holmes, were set to take effect on September 5. If Theranos fails to win a reprieve, the penalties would apply once upheld by an appeals judge.
In the wake of federal sanctions and doubts over the accuracy of its technology, Theranos has tried to bulk up its compliance efforts and remake the company's tarnished image. Late last month the company added two high-profile compliance executives to its staff and created a new board-level compliance and quality committee.
These efforts expanded on previous changes to restructure Theranos' corporate governance, which were aimed at raising the level of scientific expertise among company leadership.
But these steps may be too little, too late. If Theranos fails to win its appeal, it could be forced to change its business and get out of clinical lab services. In statements issued after CMS first released its sanctions, Theranos noted its R&D unit has developed "many technologies that are not dependent on running a clinical laboratory."
Holmes, much to the surprise of people in the industry, used a rare presentation at a medical conference earlier this month to introduce a new product, called the "miniLab." She had been expected to present some of the science behind Theranos' existing blood-testing technology, which has been called into question by damming inspection reports and reporting by The Wall Street Journal.
The new device, which is not yet approved by the Food and Drug Administration, promises to process blood samples across a number of different testing methods all in one small, roughly printer-size machine. Theranos said the miniLab could be used in a "decentralized" setting, rather than in a large laboratory.
But even if Theranos' new tech proves its worth, the CMS sanctions would be a damaging blow. The company said Thursday it would continue discussions with the regulator on "the possibility of reaching a mutually agreeable resolution to this matter."