Theranos is shutting down its blood-testing facilities and laying off 40 percent of its workforce, the Wall Street Journal reported, marking another blow to founder and Hillary Clinton donor Elizabeth Holmes.
The news continues the downfall of the former Silicon Vally darling company that was valued at $9 billion in 2o14 thanks to its supposed breakthrough blood-testing technology, which allowed multiple tests to be conducted on just a few drops of blood. Holmes impressed investors with her pitch, raising hundreds of millions of dollars and attracting big names to her company’s board list.
However, an investigation by the Wall Street Journal revealed Theranos misled the public about the capabilities of its blood-testing technology, and it was only using its Edison device for a "small fraction" of the tests it was selling to consumers. In July, federal regulators banned Holmes from blood-testing for two years, a decision she appealed. A January letter from the Centers for Medicare and Medicaid Services stated that Theranos’ Newark, California facility posed jeopardy to patient safety.
The Wall Street Journal reports:
The shutdowns and layoffs could help the closely held company accelerate its shift to developing products that could be sold to outside laboratories. Ms. Holmes announced in August a new blood-testing device called miniLab, which is about the size of a printer but hasn’t been approved by regulators.
In a statement posted on Theranos’ website late Wednesday, Ms. Holmes said: "We will return our undivided attention to our miniLab platform. 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."
Forbes dropped Holmes estimated net worth from $4.5 billion to zero in June after the revelations surfaced about Theranos’ testing and the company "being investigated by an alphabet soup of federal agencies."
According to Vanity Fair, Holmes is currently under investigation by the Securities and Exchange Commission on whether she misled investors.
In addition to hosting a fundraiser for the Democratic nominee alongside Chelsea Clinton in March, Holmes used to be one of President Obama’s Ambassadors for Global Entrepreneurship. She stepped down from that position in August.