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> http://www.wsj.com/article_email/theranos-voids-two-years-of-edison-blood-test-results-1463616976-lMyQjAxMTI2NTEzOTcxODkxWj <http://www.wsj.com/article_email/theranos-voids-two-years-of-edison-blood-test-results-1463616976-lMyQjAxMTI2NTEzOTcxODkxWj>
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> Theranos Voids Two Years of Edison Blood-Test Results
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> Theranos founder and CEO Elizabeth Holmes speaking in San Francisco last year. Photo: Jeff Chiu/Associated Press
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> By
> John Carreyrou
> May 18, 2016 8:16 p.m. ET
> Theranos Inc. has told federal health regulators that the company voided two years of results from its Edison blood-testing devices, according to a person familiar with the matter.
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> The Edison machines were touted as revolutionary <http://www.wsj.com/articles/theranos-has-struggled-with-blood-tests-1444881901> and were the main basis for the $9 billion valuation attained by the Palo Alto, Calif., company in a funding round in 2014. But Theranos has now told regulators that it threw out all Edison test results from 2014 and 2015.
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> The company has told the Centers for Medicare and Medicaid Services that it has issued tens of thousands of corrected blood-test reports to doctors and patients, voiding some results and revising others, according to the person familiar with the matter.
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> That means some patients received erroneous results that might have thrown off health decisions made with their doctors.
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> The corrected reports include the voided Edison results and many tests run on traditional laboratory machines, the person said.
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> Several physician practices in the Phoenix area confirmed receiving corrected test reports from Theranos in recent weeks.
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> The move is part of Theranos’s attempt to persuade the agency not to impose stiff sanctions it threatened <http://www.wsj.com/articles/regulators-propose-banning-theranos-founder-elizabeth-holmes-for-at-least-two-years-1460570869?cb=logged0.18879832658237028> in the aftermath of its inspection of the company’s Newark, Calif., laboratory. The voided and revised test results are one of the most dramatic steps yet taken by Theranos.
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> Company records reviewed during the inspection showed that the California lab ran about 890,000 tests a year. The inspection found that Edison machines in the lab often failed to meet the company’s own accuracy requirements <http://www.wsj.com/articles/theranos-devices-often-failed-accuracy-requirements-1459465578>.
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> Theranos has told regulators that it used the Edison for 12 types of tests out of more than 200 offered to consumers and stopped using the devices altogether in late June 2015, the person familiar with the matter said.
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> “There have been massive recalls of single tests in the past, but I’m not aware of one where a company recalled the entirety of the results from its testing platform,” said Geoffrey Baird, associate professor in the department of laboratory medicine at the University of Washington in Seattle. “I believe that’s unprecedented.”
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> In response to questions from The Wall Street Journal about the blood-test corrections, Theranos spokeswoman Brooke Buchanan said: “Excellence in quality and patient safety is our top priority and we’ve taken comprehensive corrective measures to address the issues CMS raised in their observations. As these matters are currently under review, we have no further comment at this time.”
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> CMS declined to comment.
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> In March, CMS proposed banning Theranos founder Elizabeth Holmes from the blood-testing business for at least two years after concluding that the company failed to fix what regulators have called major problems at the California lab. The agency is the federal overseer of clinical labs.
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> CMS also has threatened to revoke the California lab’s federal license and impose fines against Theranos.
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> The company has said it has taken broad corrective actions in response to the government’s concerns. Among other steps, Theranos has filed a detailed correction plan with regulators, hired a new director for the California lab and suspended most testing there.
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> Last week, Theranos announced the departure <http://www.wsj.com/articles/theranos-executive-sunny-balwani-to-depart-amid-regulatory-probes-1463015943> of Sunny Balwani, its No. 2 executive, who also was under the threat of a two-year ban from the blood-testing industry.
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> CMS is expected to announce a final decision on the sanctions soon. If the agency decides to go through with any sanctions, Theranos could appeal to an administrative law judge and then a departmental appeals board.
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> Drugstore operator Walgreens Boots Alliance <http://quotes.wsj.com/WBA> Inc. <http://quotes.wsj.com/WBA>was among those informed by Theranos about the corrected test results issued to doctors and patients, according to people familiar with the matter.
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> Walgreens has been Theranos’s main conduit to consumers since the companies announced a partnership <https://www.theranos.com/news/posts/theranos-selects-walgreens-as-a-long-term-partner-through-which-to-offer-its-new-clinical-laboratory-service> in 2013. In January, though, Walgreens notified Theranos that it intends to terminate <http://www.wsj.com/articles/walgreens-pulls-back-from-theranos-1454007879> the partnership unless Theranos quickly puts itself back in compliance with federal regulations.
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> Theranos has declined to quantify to Walgreens the scale of its test corrections, adding more friction to the relationship, said the people with knowledge of their discussions. Walgreens spokesman Michael Polzin said the company declined to comment.
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> One family practitioner in a suburb of Phoenix said a Theranos representative dropped off a stack of 20 corrected test reports a few weeks ago. Many of the voided results were for calcium, estrogen and testosterone tests.
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> The doctor said one corrected report is for a patient she sent to the emergency room after receiving abnormally elevated test results from Theranos in late 2014.
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> The corrected report from Theranos now shows normal values for those tests, according to the doctor.
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> Broadway East Internists in Mesa, Ariz., has received corrected reports for blood-coagulation tests that Theranos performed in its Arizona laboratory.
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> The company’s Arizona lab wasn’t part of last fall’s inspection, isn’t facing a sanctions threat and continues to run a variety of tests on samples drawn from patients at 40 Theranos wellness centers at Walgreens drugstores.
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> A person familiar with the matter said the Arizona lab performed the blood-coagulation tests with a traditional machine fromSiemens <http://quotes.wsj.com/SIEGY> AG <http://quotes.wsj.com/SIEGY>that was programmed to the wrong settings by Theranos.
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> The Arizona lab also failed several tests to gauge the purity of the water it uses in its Siemens machines, which could affect the accuracy of some blood tests run on the devices, the person said.
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> The person added that Siemens has grown wary about its relationship with Theranos.
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> In an emailed statement, Siemens said it is “confident that, when maintained and used properly, our equipment and tests will perform to specifications and deliver fast, accurate and reliable results to our customers.”
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> Last week, Siemens delivered lab equipment to a Theranos facility in the Harrisburg, Pa., area, according to the person familiar with the matter. The person said Theranos is preparing to open there what would be the company’s third lab.
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> —Christopher Weaver and Michael Siconolfi contributed to this article.
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> Write to John Carreyrou at john.carreyrou@wsj.com <mailto:john.carreyrou@wsj.com>


Eric D. Schwerin
Rosemont Seneca Advisors, LLC
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Suite 705
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eschwerin@rosemontseneca.com <x-msg://59/eschwerin@obblaw.com>
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