Daily Best of the Web

Theranos CEO Holmes Presses on as Costs Mount

The financial impact of Theranos’ disputes with authorities, partners and customers accumulated this week following two settlements that cost the blood-testing company almost $5 million.

The upshot was that it held onto its lab-operating certificates, posing the question of whether founder and CEO Elizabeth Holmes will ever fully recover from the scandal that started in 2015 when the Wall Street Journal first suggested the company’s products were flawed.

On Monday, Theranos agreed to drop its appeal against a ruling last year by the Centers for Medicare & Medicaid Services banning it from operating a clinical laboratory for two years. The authority also withdrew the revocation of its CLIA operating certificates and only imposed a relatively modest $30,000 fine.

A day later, Theranos agreed to pay a $4.65 million settlement to cover full refunds for every customer in Arizona that used the company’s testing services. Theranos also agreed to pay $200,000 in civil penalties and $25,000 in attorney’s fees, though, as the company noted in a statement, the matter was settled without any admission of liability.

“THE COMPANY LOOKS FORWARD TO WORKING WITH REGULATORY AUTHORITIES TO SECURE APPROVAL FOR THESE INNOVATIVE TECHNOLOGIES.”

In a separate statement, the company suggested its future could get brighter.

“Theranos exited the clinical lab and retail business last year, and is focusing on its miniaturized, automated testing platforms and related chemistries,” it said. “The company looks forward to working with regulatory authorities to secure approval for these innovative technologies.”

Last August, Holmes unveiled a new “mini-lab” kit that can run a variety of diagnostic tests on small-volume blood samples. It is still awaiting approval from the U.S. Food & Drug Administration.

In the meantime, Theranos will have to contend with looming lawsuits that could place more strain on its balance sheet. Walgreens, for example, is seeking $140 million in damages from its former partner and some investors also have sued the company.

So it looks like it’s a race against the clock to see if Theranos can get FDA approval and start generating some revenue or extra funding before its money runs out.

Even if the firm does get the regulator’s blessing, Holmes will have to convince a skeptical public exposed to almost two years of negative press that Theranos’ products and practices are sound.

You might also like:
5 Lessons for a Corporate Turnaround from an Auto Industry CEO
7 Turnaround Tips From an Interim CEO
Boards: Choose a CEO for Long-Term Growth, Not Just a Turnaround
8 Leadership Tactics From a CEO Who Orchestrated a Successful Turnaround


Ross Kelly

Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

Share
Published by
Ross Kelly

Recent Posts

A CEO State Of Mind—In County Government

Why companies like Nokia are betting on Middlesex County, New Jersey—where smart governance meets private-sector…

2 days ago

How Kardex Remstar Is Working To Build American Automation

The warehouse automation equipment maker is investing in a strong supply chain by building production…

2 days ago

Six Questions To Bring Insight Back To Strategy

Strategy processes are getting squeezed. Answering these questions will set you up for building and…

2 days ago

Reliable AI Agents

The key lies in a progressive implementation of control mechanisms, each adding a new layer…

2 days ago

CEOs Of The Year On Succeeding In The Top Job

To celebrate the 40th CEO of the Year, we share some lessons learned along the…

2 days ago

‘A Good Time To Speak Up For Business’: The 2025 CEO Of The Year Celebration

Chief Executive Group CEO Marshall Cooper opens the 40th annual celebration, this year honoring Lilly’s…

3 days ago