UPDATED: Theranos flagged by CMS for serious problems at California lab: WSJ

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

Things keep going from bad to worse for Theranos, and the latest chapter in the company's ongoing saga over its proprietary testing technology isn't looking any rosier. The Centers for Medicare and Medicaid Services (CMS) has uncovered serious problems at Theranos' Northern California lab, adding to the company's recent string of regulatory woes.

A spokesman from the CMS said that the agency "can't confirm any survey conclusions or results at this time," according to The Wall Street Journal. But regulators will soon release findings from a months-long inspection of Theranos' Newark, CA-based lab, which turned up more severe problems than those unearthed two years ago at the same facility, according to the WSJ story. No one is spelling out exactly what is in the latest reports.

Back in 2013, the CMS stopped by to inspect Theranos' Newark lab, which houses the company's proprietary Edison testing machines and other traditional testing devices made by companies such as Siemens. At the time, regulators never saw Edison machines, former employees have said. Last July, David Boies, Theranos' outside counsel and a recently appointed company director, said that inspectors didn't ask to see the Edison devices when they came for the inspection.

Theranos remains characteristically elusive about the latest CMS inspection, saying that it does not yet have the report so "it's hard to comment on something that hasn't been given to us," company spokeswoman Brooke Buchanan told FierceMedicalDevices. And the company is taking issue with the WSJ story, contending that it's "based on allegations by unnamed sources" and "not based on CMS findings," she added. Theranos "has continued its ongoing work to build best-in-class systems and engage in partnership with its regulators," Buchanan told the WSJ.

The Palo Alto, CA-based company has gotten to know regulators well this past year. Theranos only uses its Edison device for one of its more than 200 tests after the FDA paid the company a surprise visit and found that "nanotainers" manufactured and used by Theranos to collect samples were unapproved medical devices. Arizona regulators also came down on the company last year for testing issues at its Scottsdale, AZ-based lab.

The recent fallout has been enough to send some of Theranos' partners over the edge. In October, Walgreens Boots Alliance ($WBA) said that it would freeze its partnership with the company until Theranos answers some questions regarding its proprietary testing technology.

Walgreens has debated whether to close wellness centers that offer Theranos testing, and the results from the latest CMS inspection could lead the retail giant to take an even harder look at its relationship with the company, people familiar with the matter told the WSJ. But Walgreens is keeping quiet on its next move for now, saying that it is "currently in discussions about the next phase of our relationship," the company said, as quoted by the newspaper. Theranos declined to comment to the WSJ.

- read the WSJ story (sub. req.)

Editor's note: This article was updated with a statement from Theranos spokeswoman Brooke Buchanan.