Can Theranos survive its ‘dramatic retreat’ and brand crisis?

NPR calls the news that Theranos is closing the core of its operations—and laying off nearly half its workforce—a “dramatic fall from grace.”

<="" a="">Business Insider reported the Silicon Valley-based company—led by Elizabeth Holmes—is regrouping.

Almost a year after The Wall Street Journal published an investigation that questioned the accuracy of Theranos' blood test, the company has decided to stop all of its clinical operations, cutting 340 positions and closing its Wellness Centers where blood tests were performed.

Instead, Theranos has decided to make a major shift, focusing solely on its technology, namely the miniLab platform it debuted in August at a scientific conference. At the time, the product reveal didn't go over too well, since those in attendance were hoping for large amounts of independently reviewed data that validated the company's blood test results.

Holmes wrote an “open letter to stakeholders” that was published on the company website late Wednesday. It read, in part:

We will return our undivided attention to our miniLab platform. Our ultimate goal is to commercialize miniaturized, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, pediatrics, and intensive care.

We have a new executive team leading our work toward obtaining FDA clearances, building commercial partnerships, and pursuing publications in scientific journals.

We are fortunate to have supporters and investors who believe deeply in our mission of affordable, less invasive lab testing, and to have the runway to realize our vision.

Reporter Neil Versel wrote on MedCityNews.com about Theranos’ legal problems:

COO and President Sunny Balwani departed the company in May in the face of federal civil and criminal investigations. Balwani has not been charged with any crimes, nor has he been replaced yet, according to the Theranos website.

So, what does the future hold for Theranos? Really, only Holmes—or perhaps a federal grand jury—knows for sure. But her dream of disrupting the lab business with minimally invasive blood testing seems gone for good, and Theranos seems like it wants to be a device company now.

As the crisis unfolded, Walgreens was one of several companies to sever its ties with Theranos.

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Meanwhile, John Carreyrou, the Wall Street Journal investigative reporter who broke the story, won praise on Twitter for his work:

Carreyrou and his colleagues at the Journal posted as well:

Patients are finally safe tonight. I did my job. #theranos https://t.co/QsCjimOci4

— John Carreyrou (@JohnCarreyrou) October 6, 2016

 

Others on social media shared their views:  

In the wake of the controversy, Theranos has accepted "full responsibility and vowed to work non-stop to resolve the issues identified."

Is this week’s dramatic pivot enough to save the company—and Holmes? How has the health care industry in general been hurt by Theranos’ downfall?

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