Theranos CEO opens up about lab transgressions, 'devastated' by the fallout

Theranos CEO Elizabeth Holmes

Theranos CEO Elizabeth Holmes has mostly stayed quiet during the company's fall from grace. But now, the beleaguered testing company's frontwoman is talking. In a Today Show interview with NBC special anchor Maria Shriver, Holmes opened up about Theranos' ongoing testing saga and its recent fallout with the Centers for Medicare and Medicaid Services (CMS).

The company has "stopped testing and we've taken the approach of saying, 'let's rebuild this entire laboratory from scratch so that we can ensure it never happens again,'" Holmes told Shriver. "I feel devastated that we did not catch and fix these issues faster."

In November, CMS stopped by to inspect Theranos' Newark, CA-based lab after articles in The Wall Street Journal pointed to issues with the company's proprietary testing technology. Regulators found 5 major lab infractions, including one in hematology that posed "immediate jeopardy to patient health and safety."

CMS told Theranos to submit a game plan for how it would fix the problems, and the company complied. But its response did not appease regulators, who are taking a hard stance. Last week, a new report revealed that the CMS wants to take away the license for Theranos' Newark lab and ban Holmes and President Sunny Balwani from the company for at least two years.

Theranos' Palo Alto, CA, headquarters--Courtesy of Theranos

Still, Holmes remains confident about Theranos' prospects. "I know what we've built and I know what we've created and I know what it means to people and it is a change that needs to happen in the world," Holmes said.

The company has taken some steps to improve its bad rep and make good with regulators. Earlier this year, Theranos brought on a new lab director, Dr. Kingshuk Das. The embattled testing startup also recently boosted its scientific board, adding "nationally respected laboratory and medical experts" with expertise in areas including pathology and diagnostics, Theranos said earlier this month.

But whether the company will survive its past transgressions is anyone's best guess. CMS' proposed penalties, which are some of the most severe in its power, could spell out more problems for Theranos, Sidley Austin Lawyer Barbara Cammarata told the WSJ last week, ones that could lead to its demise. "They're in a lot of trouble," Cammarata said.

- watch the Today Show interview

Special Report: The most influential people in biopharma today – Elizabeth Holmes - Theranos

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