Theranos has withdrawn its application to the Food and Drug Administration for emergency approval of a new diagnostic blood test for Zika virus infections, according to the Wall Street Journal. The FDA’s emergency approval process, used in times of extraordinary medical need, such as the current Zika outbreaks, is a lower-than-normal regulatory hurdle for new medical products.
The Zika test was allegedly performed on Theranos’ new MiniLab device; both were unveiled Aug. 1 at a conference of the American Association for Clinical Chemistry. However, during a subsequent lab inspection, the FDA found that the company collected some of the data on its Zika test before establishing patient safety protocols. Theranos informed investors that it “recognized” the problem during the inspection and decided to withdraw its application.
The move is another stumbling block for the company, which appears to be seeking to rebrand itself as a device maker after federal regulators issued heavy sanctions over safety concerns in the company’s clinical diagnostic work.
The biotech startup rose to prominence and a hefty valuation — as high as $9 billion — with the promise of revolutionary technology that could run medical tests on just a few drops of blood from finger pricks that could sidestep the dreaded twitching. But in July, the Centers for Medicare & Medicaid Services (CMS) revoked the company’s license to operate one of its two clinical labs and banned its CEO and founder, Elizabeth Holmes, from running a lab for at least two years. to own, operate or direct. . The sanctions were imposed after the CMS discovered several violations in its lab and testing protocols, including one that posed “immediate danger to patient health and safety.” Amid the painful sanctions, the company lost its largest commercial partner, Walgreens. It has also been sued by several former clients, facing criminal charges for misleading investors and regulators, and has seen its valuation drop to just $800 million.
Theranos announced last week that it would appeal the CMS sanctions. However, professions are rarely successful.
With the unveiling of the MiniLab at the beginning of the month, Theranos appeared to be focusing its business model on selling diagnostic devices rather than conducting its own tests. This may be the company’s only option if the sanctions are in effect.
At the AACC conference, Theranos presented the MiniLab as a convenient, automated device that combined standard laboratory equipment and tests in one unit to perform a wide variety of medical tests on small amounts of blood at the touch of a button. While it’s not the revolutionary diagnostic technology the company made its name on, many scientists and experts at the AACC conference were generally impressed with the device’s design.
Still, some were skeptical about the company in general given its past troubles. And others expressed concern about the company’s rush to get approval for a Zika test run on an untested diagnostic platform. They considered the move reckless and a repeat of past mistakes.
It seems those critics were right.