Theranos lab poses 'immediate jeopardy'

elizabeth holmes
Founder Elizabeth Holmes and her company Theranos have been under close watch in recent months.

Biotech startup Theranos has 10 days to correct critical deficiencies with its lab.

That's according to a letter issued to the company Monday by the Centers for Medicare & Medicaid Services.

Theranos says it offers a cheaper, more efficient alternative to traditional medical tests. It is valued at more than $9 billion and has been billed as a classic industry disruptor. In October, a scathing report in the Wall Street Journal called much of its technology and testing methods into question.

CMS conducted a survey of Theranos' Newark, California, lab last year. It cited five areas in which the lab failed to meet compliance standards.

"It was determined that the deficient practices of the laboratory pose immediate jeopardy to patient health and safety," reads the letter, which was released on Wednesday.

What we know about the science behind Theranos

The letter specifies that immediate corrective action is necessary because the lab "has already caused, is causing, or is likely to cause, at any time, serious injury or harm, or death."

CMS cited the lab's personnel -- including the director and technical supervisor -- as problems that must be addressed.

Theranos issued a statement on Wednesday afternoon stating that it has made policy and personnel changes in its Newark lab. It clarified that the findings do not relate to its Arizona lab, where it processes "90 percent of our tests."

Theranos: $9 billion startup in the spotlight

Theranos continues to stand behind its technology and operations:

"We are still reviewing the report, but we addressed many of the observations during the survey and are actively continuing to take corrective action. A full plan of correction will be submitted to CMS within days."

Mortgage & Savings


CNNMoney Sponsors