Elizabeth Holmes, the embattled founder and chief executive of Theranos, said late Wednesday that the company will close its clinical labs and wellness centers. The open letter, posted on the company’s website, was essentially an epitaph for the consumer business that was the focus of the once-celebrated Silicon Valley company that Holmes boasted would change the world with its simple and inexpensive pinprick blood test.
In magazine interviews, TV appearances and keynote speeches she gave around the world, Holmes said the innovation would empower consumers by giving them the ability to bypass the gatekeepers — their doctors — to get important information about the health of their own bodies. Numerous investors and consumers fell for her story, and at one point the company was valued at $9 billion, making Holmes the youngest self-made female billionaire ever.
But as the company grew, so did questions about its technology. In a series of skeptical reports starting in October 2015, the Wall Street Journal recounted how even Theranos's own employees questioned the accuracy of the results of its testing and revealed that government regulators had been looking into the matter.
The company aggressively defended itself against the accusations but over the summer acknowledged major defeats. In June, Walgreens said it had terminated its partnership with the blood testing start-up effective immediately. In July, the Centers for Medicare & Medicaid Services imposed harsh sanctions against Theranos, imposing a fine, revoking its certificate for a lab and banning Holmes from owning, operating or directing a blood-testing lab for at least two years.
Wednesday's announcement essentially shuts down the consumer-focused operations that were at the heart of the vision Holmes promoted.
The move will affect about 340 employees in Arizona, California and Pennsylvania, and Holmes was generous in recognizing them for sticking by her.
“We are profoundly grateful to these team members, many of whom have devoted years to Theranos and our mission, for their commitment to our company and our guests,” she wrote.
Holmes said the company will now focus its “undivided attention” on the Theranos miniLab platform which she described as a product that would be “miniaturized, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, pediatrics, and intensive care.”
This post has been updated.