Former Billionaire Elizabeth Holmes Suffers Yet Another Embarrassing Setback With California Lab Banishment

By on July 12, 2016 in ArticlesBillionaire News

It just hasn't been Elizabeth Holmes's year. She started the year as the youngest female self-made billionaire in history. Then, allegations surfaced that her revolutionary blood testing methods weren't all that accurate. Then, her net worth was downgraded from $4.5 billion to $0. Pretty bad, right? Unfortunately, things just got worse for Holmes.

Federal regulators have revoked the license of Theranos' California blood testing facility AND they have banned Holmes from owning or operating a lab for two years. The company is facing a civil financial penalty and is also now ineligible to receive Medicare and Medicaid payments.

Lisa Lake/Getty Images

Lisa Lake/Getty Images

Theranos was once the darling of Silicon Valley. It was valued at $9 billion. But then rumors began to swirl that its signature technology – wherein a single drop of blood could diagnose a cornucopia of ailments – was not functioning as advertised. In fact, it was further revealed that Theranos was using its vaunted technology in only a few cases and if was frequently inaccurate. Most of their testing was done via traditional methods. In May, Theranos had to void two years worth of lab results.

The Centers for Medicare and Medicaid Services (CMS) launched an investigation into Theranos' California lab. After the decision came in, Theranos said it would continue to operate out of its Arizona lab. While the sanctions don't take effect for 60 days, it is hard to see how, since the ban on Holmes means she cannot own, operate, or direct a lab.

Before questions about Theranos' methods surfaced, Holmes was touted as the darling of Silicon Valley's biotech sector. She was even on the cover of Inc. magazine with the headline "The next Steve Jobs." After doubts about Theranos came to light, Entrepreneur magazine named Holmes its 'Worst Entrepreneur of 2015.'

Elizabeth Holmes dropped out of Stanford at 19 to found Theranos. Now 32, maybe it is time for her to go back back and finish that degree.

Articles Written by Amy Lamare
Amy Lamare is a Los Angeles based writer covering business, technology, entertainment, philanthropy, and pop culture. She spent 8 1/2 years covering the entertainment industry for www.hsx.com. She attended the University of Southern California where she majored in Creative Writing. An avid long distance runner, weekends she can be found running the streets of Los Angeles training for 1/2 and full marathons. Follow her on Facebook.
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