Theranos Shutting Down Labs

Theranos, the embattled Palo Alto-based healthcare startup, has announced it is shutting down its three laboratories, including its flagship facility in Newark.

The closures of the labs in the Bay Area, Arizona and Pennsylvania and dozens of patient draw centers led to the layoffs of 340 employees – about 45% of the company's total staff.

Theranos had originally launched a business based on being able to conduct laboratory tests using just a few drops of blood that could be drawn without a needle. It raised some $300 million in venture capital and for a time last year the company was valued at $9 billion. However, a series of investigative articles in the Wall Street Journal led to conclusion that Theranos' test platform did not function correctly and that it issued inaccurate test results to patients. The Centers for Medicare & Medicaid Services (CMS) imposed sanctions against the company, including barring Chief Executive Officer Elizabeth Holmes from operating a laboratory for two years.

Instead, the company will refocus on a miniaturized medical laboratory known as the miniLab. Holmes discussed the technology at a presentation earlier this year. It is unknown when and if the product will be available to healthcare providers.

“Our ultimate goal is to commercialize miniaturized, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, pediatrics, and intensive care,” Holmes said in a letter posted on the company's website last week.