- Theranos president and chief operating officer Sunny Balwani is leaving the embattled blood-testing firm amid a broader restructuring which includes the addition of three members to the board of directors, the company announced on Wednesday.
- Last month, Theranos confirmed new investigations into the company had been opened by the Department of Justice and the Securities and Exchange Commission. At the same time, the Centers for Medicare and Medicaid (CMS) has threatened to revoke Theranos' California lab's certification and ban founder Elizabeth Holmes from the blood-testing business.
- A former top executive at Amgen will join Theranos' board, along with two current members of a company advisory panel. Theranos is also seeking multiple executives to head up its newly created corporate divisions for Technology and Clinical Operations.
Sunny Balwani's departure comes as Theranos is attempting to bulk up on scientific and medical expertise to restore confidence in its now-troubled business. In early April, the company added several new medical and laboratory experts to its medical advisory board, including William Foege, a former director of the U.S. Center for Disease Control and Prevention.
Foege will now join Theranos' board of directors, as will Fabrizio Bonanni, a former head of Operations at Amgen, and Richard Kovacevich, ex-CEO of Wells Fargo.
Balwani joined Theranos in 2009 and had served as Elizabeth Holmes' number two since then, presiding over the company's rapid rise as a Silicon Valley "unicorn."
But questions of the firm's proprietary finger-prick blood-testing technology began to emerge last fall. In inspections around that time, CMS flagged several serious deficiencies at Theranos' Newark, California lab, including some that posed an immediate threat to patient health.
Reporting by The Wall Street Journal found the company was only using its unique testing technology for a much more limited number of tests than the company had claimed and questioned the accuracy of testing results.
Theranos worked to correct the violations outlined by CMS, but the regulator last month found the company's efforts to fix the issues insufficient and proposed revoking the Newark lab's certification to operate. It also said it could ban both Holmes and Balwani from the business for two years and impose fines on the company.
CMS is currently reviewing Theranos' latest response and has yet to hand down any sanctions. Closure of the Newark lab would be a significant blow to Theranos' image, but as much as 90% of the testing conducted by the company is done out of its separate Arizona lab.
The recently announced moves appear to be an attempt to shore up investor faith in the business and boost the scientific chops of its executive leadership team. New board member Fabrizio Bonanni will "work in a special capacity with management as it builds on its operations and quality systems infrastructure," the company said.
Bonanni worked for 14 years at Amgen, serving as corporate compliance officer, senior vice president of manufacturing, and finally as head of operations. Prior to his work at Amgen, he held senior roles at Baxter International.
His appointment to the board should help Theranos navigate the challenges of rebuilding the credibility of its blood-testing tech. But the company still has a long way to go to clear the ongoing federal investigations, as well as answer questions regarding the accuracy of its methods.