Theranos CEO Faces Critics, Presents New Product Plans
The chief executive of embattled Theranos Inc. on Monday presented plans for a new product and said the blood testing company was working diligently to rectify all of its outstanding issues involving its product and laboratory operations.
CEO Elizabeth Holmes described new technologies that she said were "distinct from the operations of our clinical laboratories" that have come under scrutiny -- part of a presentation before some 2,650 scientists at the American Association for Clinical Chemistry meeting in Philadelphia.
Those technologies included a new "minilab" product that can run a broad range of tests on a single desktop machine.
It was her first public appearance since the privately held company and Holmes personally were sanctioned by the U.S. government's Centers for Medicare & Medicaid Services. Theranos has long been criticized by the medical community for refusing to share information about its technology and Monday's appearance was aimed in part at addressing those concerns.
Among the tests that can be run through the minilab technology is a diagnostic for Zika that Holmes said can detect additional strains of the mosquito-borne virus from blood drops finger-pricked from patients. Zika has spread rapidly across the Americas.
Holmes said the company had sent the Zika results to the U.S. Food and Drug Administration and that the company believed the analysis of blood collected using its finger-prick methodology was as effective as other methods, a comparison also sent to the FDA.
The company, once valued at $9 billion, was founded by Holmes in 2003 to develop an innovative blood testing device that would give quicker results using just one drop of blood.
Theranos ran into trouble after the Wall Street Journal published a series of articles beginning last October suggesting the blood-testing devices were flawed and inaccurate.
Theranos technology challenged
Holmes last month was barred by U.S. regulators from owning or operating a lab for at least two years and, in a crushing blow, the Centers for Medicare & Medicaid Services revoked a key certificate for its California lab and terminated the facility's approval to receive government payments.
Walgreens Boots Alliance terminated its relationship with the company in June and closed operations at all 40 Theranos Wellness Centers at its drug stores in Arizona.
Members of the audience applauded several times when doctors on the stage challenged aspects of Theranos technology.
Dr. Stephen Master, a pathologist at Weill Cornell Medical College in New York, said much interest in the company stemmed from claims it made which were very broad.
"The evidence you presented fell far short of that," Master said to applause.
Prior to introducing Holmes, association president Patricia Jones said the organization does not endorse Theranos. "We're all aware that there have been some suggestions about whether we'll see some science today and the viability of Theranos technology," Jones said.
Holmes, when asked in an interview whether she would consider stepping down because of the sanctions, said they apply to her because she owns more than five-percent of the company, not because she is chief executive. Theranos has taken steps to fix the problems, including hiring a new chief compliance officer and appointing an independent board committee, Holmes said in the interview.
Holmes said she could not give an estimate of how much time it would take for Theranos to fix all its outstanding issues because of the ongoing involvement of regulators.
Theranos runs four patient testing centers in Phoenix, Arizona which continue to generate revenue, Holmes said in the interview. Holmes declined to comment on how much cash Theranos has on hand.
(Reporting by Suzanne Barlyn and Bill Berkrot; Editing by Jonathan Weber and Edwina Gibbs)