NEW YORK, N.Y. – Troubled blood-testing startup Theranos acknowledged that it is under investigation by several regulators and agencies.
The investigations follow a series of reports by The Wall Street Journal in which former employees said the company’s tests, which use only a few drops of blood, were unreliable. Theranos said the articles were inaccurate when they were published.
Theranos said in a letter Monday that investigations or inspections have been opened by the Centers for Medicare and Medicaid Services, the Securities Exchange Commission and the U.S. Attorney’s Office for the Northern District of California. It said investigations by the Food and Drug Administration and the Departments of Health in Arizona and Pennsylvania were closed successfully.
Founder and CEO Elizabeth Holmes told NBC News in an interview that aired Monday that she was “devastated” that the company didn’t catch and fix issues sooner after the Centers for Medicare and Medicaid Services found that one of its labs had unqualified workers.
Theranos, based in Palo Alto, California, has raised millions of dollars by pitching its technology as a cheaper, faster way to run dozens of blood tests. Holmes, reportedly the nation’s youngest female billionaire, has said that she founded Theranos in response to her fear of needles. The company’s lab tests are pitched as costing a “fraction” of what other labs charge.
But one of the company’s partners, Walgreens, asked Theranos in January to step sending samples collected at its stores to a testing facility that drew regulatory scrutiny over possible patient risks. Walgreens, the nation’s largest drugstore chain with over 8,000 stores, said the decision only affected 40 stores in Arizona and one in Palo Alto, California. Walgreens told Theranos to either send tests to a certified lab in the Phoenix area that Theranos runs or to an accredited third-party lab.