Theranos Inc. is under investigation by the U.S. Attorneys Office for Northern District of California and U.S. Securities and Exchange Commission (SEC) because of problems with state health regulators.
The blood-testing start-up company faces criminal and civil probes, according to a company memo sent to its partners, which include Walgreens Boots Alliance Inc. The investigations on the company were because of several quality control issues in its California laboratory.
Theranos is also being investigated by the U.S. Food and Drug Administration (FDA), Center for Medicare and Medicaid Services (CMS) and state health departments of Pennsylvania and California.
"The company continues to work closely with regulators and is cooperating fully with all investigations," said Theranos.
The SEC and U.S. Attorney's Office are initially focused on requesting documents, in addition to CMS inspection.
The memo shared to Bloomberg came after the article was released by Wall Street Journal, wherein issues about Theranos first came out.
The first issue reported that Theranos' blood-testing machine produce erratic results and eventually followed by another issue highlighted by CMS.
The CMS found more quality control problems in Theranos' laboratory in Newark, California, which are, but not limited to, lack of proper documentation, not maintaining the fridge temperature required by drug manufacturers, unqualified personnel and missing signatures on documents.
"CMS said in late January that faults at the lab were so severe that they jeopardized patients' health," according to Bloomberg.
In the memo, Theranos also said that due to consistent press attention, they want that all the inquiries and confidentialities about the issue will come from them after being quiet in the past.
The memo also revealed that Theranos recently hosted three scientific review sessions in Palo Alto with medical experts and aims to introduce their technology through peer reviewed publications.
On NBC's Today show, Theranos CEO Elizabeth Holmes appeared before the investigations were announced, saying that she was devastated by the company's failure on catching the issues and not fixing it faster.
"[W]e've taken the approach of saying, 'Let's rebuild this entire laboratory from scratch so that we can ensure it never happens again," said Holmes.
Other involved officials from partner companies and investigative agencies declined to comment on the issue.
Another Wall Street Journal report said that CMS is proposing to ban Holmes from managing and operating a diagnostic business and stop getting payments from Medicare.
Photo: Steve Jurvetson | Flickr