; 13 years ago 2003 founder elizabeth holmes headquarters palo alto california united states products blood tests services medical tests website www.theranos.com theranos is an american privately held health technology and medical laboratory services company based in palo alto california . 1 it is under criminal investigation by federal prosecutors and the securities and exchange commission . 2 theranos developed a blood testing device named edison . the company said the device uses a few drops of blood obtained via a finger stick rather than vials of blood obtained via traditional venipuncture 3 utilizing microfluidics technology . 4 by the summer of 2014 its founders had raised over 400 million from investors valuing the company at 9 billion . 5 6 in october 2015 controversy surrounding the company s blood testing process arose after a report in the wall street journal raised concerns about the accuracy of its edison device . an independent u.s. government review by the centers for medicare and medicaid services cms reported inaccurate testing results and multiple deficiencies in sample handling during a recent inspection . in june 1 2016 forbes revised its estimate of the company s net worth to 800 million . 7 8 on july 7 2016 theranos announced that it had received notice from the centers for medicare & medicaid services cms regarding the revocation of its clia certificate . sanctions include a prohibition of the owners and operators from owning or operating a lab for two years and a civil monetary penalty . 9 10 on october 5 2016 theranos announced that it would close its laboratory operations shutter its wellness centers and lay off around 40 percent of its work force while henceforth focusing on an initiative to create miniature medical testing machines . 11 contents 1 history 1.1 partnerships 1.2 technology 2 corporate affairs 2.1 location 2.2 management 3 controversies 3.1 fda 3.2 centers for medicare and medicaid services certification 3.3 board of directors appointment of david boies 3.4 u.s. military 3.5 u.s. house of representatives committee investigation 4 litigation 5 see also 6 references 7 external links history edit while at stanford university elizabeth holmes created a wearable patch to adjust the dosage of drug delivery and notify doctors wirelessly of variables in patient s blood . 12 she started developing lab on a chip technology for blood tests and the idea for a company that would make testing cheaper more convenient and accessible to consumers . 13 holmes used the education trust from her parents for stanford to found the company that would later be called theranos which is a combination of the words therapy and diagnosis . 14 15 in 2004 theranos was headquartered out of a rented basement located near a strip mall by the stanford campus . 16 by december 2004 theranos had more than 6 million from investors with an estimated value of 30 million . 17 the company had about 45 million total fundraising after series b and series c funding in 2006 . 18 theranos raised an additional 45 million in 2010 and had an estimated value of 1 billion . 17 19 the company moved to the former headquarters of facebook in june 2012 . 20 during its first 10 years of operation theranos was in stealth mode similar to other silicon valley startups which received criticism from the media and scientific community . 21 the company had significant news coverage starting in september 2013 after profiles in the san francisco business times and wall street journal . 13 by 2014 theranos had raised more than 400 million with an estimated value of 9 billion . 22 in july 2015 the food and drug administration approved the use of the company s fingerstick blood testing device for the herpes simplex virus hsv 1 outside a clinical laboratory setting . 23 24 theranos was awarded the 2015 bioscience company of the year by azbio . 25 on october 5 2016 theranos announced that it was closing its laboratories and walgreen s testing centers and would instead focus on selling its minilab blood testing device . 26 27 28 partnerships edit in september 2013 theranos partnered with walgreens to offer in store blood tests at more than 40 locations . walgreens announced plans to expand the wellness centers across the united states . 29 the company s blood tests were used on drug trial patients of glaxosmithkline and pfizer . each company stated that there were no ongoing active projects with theranos in october 2015 . 30 31 cleveland clinic announced a partnership with theranos to test its technology in order to decrease the cost of lab tests . 32 theranos became the lab work provider for pennsylvania insurers amerihealth caritas and capital bluecross in july 2015 . 33 34 walgreens suspended its plans to add theranos testing services in its stores and later removed theranos testing from all existing locations . 35 technology edit during its first decade of operation the company developed devices to automate and miniaturize blood tests using microscopic blood volumes . theranos was best known for its nanotainer fingerstick which draws a microliter sample of blood from the capillaries in a patient s hand . 36 37 38 theranos claimed to have data verifying the accuracy and reliability of its tests that would be published . 39 its technology has been criticized for not being scientifically peer reviewed . 40 41 in february 2016 theranos announced that it would permit the cleveland clinic to complete a validation study of its technology . 42 the journal of clinical investigation found that the company s blood test results were much more in line with the others than they are out of line in march 2016 . 43 in may 2016 theranos announced that it had voided two years of results from its edison device . 44 the company announced that about 1 percent of test results had been voided or corrected from its proprietary machines in june 2016 . 45 while the company was expected to present data about its edison technology to the american association for clinical chemistry in august 2016 46 it instead introduced a new robotic capillary blood testing unit named minilab . 47 48 the company did not address any questions or present any data related to the previous test results or the edison device . in august theranos announced and then later withdrew its request for emergency clearance of a new zika virus blood test . the wall street journal reported that according to unnamed sources federal regulators had found that the company didn t follow proper patient safeguards in a study for the test . theranos s vice president of regulatory quality and clinical affairs dave wurtz stated we hope that our decision to withdraw the zika submission voluntarily is further evidence of our commitment to engage positively with the agency . 49 corporate affairs edit location edit theranos is headquartered in palo alto california . it has laboratories in newark california and scottsdale arizona . 50 management edit since its foundation in 2003 holmes has been the company s chief executive officer . she recruited channing robertson a chemical engineering professor at stanford to be a technical advisor and the company s first board member during its early years . sunny balwani a software engineer holmes had met during high school joined the company as its president and chief operating officer in 2009 . 51 in july 2011 holmes was introduced to former secretary of state george shultz who joined the theranos board of directors that same month . 52 over the next three years shultz helped to introduce almost all the outside directors on the all star board which included william perry former secretary of defense henry kissinger former secretary of state sam nunn former u.s. senator bill frist former u.s. senator and heart transplant surgeon gary roughead admiral usn retired james mattis general usmc richard kovacevich former wells fargo chairman and ceo and riley bechtel chairman of the board and former ceo at bechtel group . 52 53 54 the board was criticized for consisting mainly of directors with diplomatic or military backgrounds . 13 in april 2016 theranos announced its medical advisory board which included past presidents or board members of the american association for clinical chemistry . 55 members were invited to review the company s proprietary technologies and advise on the integration into clinical practice . 55 the board included past presidents or board members of the american association for clinical chemistry such as susan a. evans william foege former director u.s. centers for disease control and prevention david helfet director of the orthopedic trauma service at the hospital for special surgery and professors ann m. gronowski larry j. kricka jack ladenson andy o. miller and steven spitalnik . 56 57 balwani left his position as president and coo in may 2016 . at that time the company announced its new board members fabrizio bonanni richard kovacevich and william foege who would help to publicly introduce its technologies . 58 the following people joined theranos as directors fabrizio bonanni former executive vice president of amgen ; richard kovacevich ; and william foege former director of the centers for disease control and prevention . 59 60 as of may 2016 the theranos board of directors are 61 elizabeth holmes founder and ceo riley bechtel former bechtel group ceo david boies a founder and the chairman of boies schiller & flexner william foege former director u.s. centers for disease control and prevention richard kovacevich former wells fargo ceo and chairman james mattis retired usmc general fabrizio bonanni former executive vice president of amgen controversies edit on october 16 2015 the wall street journal quoting many unnamed current and former employees reported that theranos s flagship edison testing device might provide inaccurate results . 62 the alleged discrepancies in theranos proficiency testing and reporting to regulators led to a formal complaint filed with the new york state department of health that was forwarded to the centers of medicare and medicaid services cms . 62 moreover the bulk of the blood tests being performed by theranos were reported to be conducted on traditional machines of competitors companies such as siemens rather than its own edison machines . 41 theranos attacked the journal but did not refute any of the allegations . 63 wired asserted that the company may have succumbed to silicon valley pressures of trying to spin hype into startup gold and promising more than they could deliver . 41 theranos has claimed to have partnerships with glaxosmithkline and pfizer which both companies have denied . 31 theranos also claimed the successful venture capital firm draper fisher jurvetson had invested in them but company principal steve jurvetson clarified that it had provided the company s first 500 000 seed investment and nothing more . 64 fda edit on october 28 2015 the food and drug administration fda also reported major shortcomings in the company s practices and ordered theranos to stop using its edison device which it had neither tested for accuracy nor approved contrary to the company s previous claims . 65 theranos was ordered to limit its use of edison to one of the 200 tests it offered . the arizona department of health services reported issues in the company s other laboratory . 66 theranos asserted that the reports were factually and scientifically erroneous and grounded in baseless assertions by inexperienced and disgruntled former employees and industry incumbents . 67 subsequently a key metric of theranos valuation was notably called into question when walgreens suspended further expansion of theranos wellness centers . 68 additionally after an fda inspection theranos reported it had voluntarily suspended use of its flagship micro or low volume blood testing technique except for herpes virus testing . 69 subsequent articles have called into question previous statements by theranos regarding the nature and source of its income . 31 though theranos has often claimed