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Elizabeth Holmes has spent months doing damage control. Now she’s fighting for survival.

The embattled chief executive of blood-testing company Theranos is facing a proposed sanction from regulators that would ban her from owning or running a medical lab for at least two years, the Wall Street Journal reported Wednesday.

The reason: the Silicon Valley company’s failure to fix problems in its Newark, Calif., lab to the satisfaction of the Centers for Medicare and Medicaid Services. The center has also proposed revoking the lab’s license and banning Theranos president Sunny Balwani from the blood-testing business.


Brooke Buchanan, a spokeswoman for Theranos, confirmed to STAT that the company has responded to the letter from CMS and that none of the proposed sanctions have yet been imposed. She called the proposed sanctions a “normal … part of the auditing process.” If sanctions are imposed, the company could appeal.

The forceful action by CMS comes as other startups are making moves into the field that Holmes tried to stake out for Theranos: sparing patients the discomfort and expense of traditional blood draws with technology that measures an array of health metrics from a pinprick of blood.


An Arizona startup called HealthTell, which aims to assess patients’ immune responses to disease using a small volume of blood, said last month that it raised $26 million from investors. In the past few weeks, a company called Cor that promises to find “a world of insights in a tiny drop” has raised more than $100,000 on the crowdfunding website Indiegogo.

And this week, a Massachusetts company called Seventh Sense Biosystems launched a trial of a device that uses an array of microneedles, each smaller than an eyelash, and a vacuum chamber to collect blood from the upper arm.

Theranos was once valued as high as $9 billion but has experienced a precipitous fall.

Once a media darling, known for her Steve Jobs-esque black turtlenecks, Holmes has come under harsh scrutiny in recent months. A string of searing Wall Street Journal reports raised questions about the company’s highly touted technology, corporate partners that have pulled back, and regulators have cracked down on the company’s lab practices.

She recently added new medical experts to the Theranos advisory board to try to quell the criticism.

Correction: A previous version of this story imprecisely described the technology developed by Seventh Sense Biosystems.