Theranos has announced that it will close its blood-testing facilities.

In an open letter to stakeholders, CEO Elizabeth Holmes said the company will close its clinical labs and Theranos Wellness Centers, which will impact about 340 employees in Arizona, California, and Pennsylvania – roughly one-fourth of the company’s workforce.

“After many months spent assessing our strengths and addressing our weaknesses, we have moved to structure our company around the model best aligned with our core values and mission,” Holmes said, adding that the company will be focusing on its new 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,” she said.

Holmes said the company has a new executive team working toward “obtaining FDA clearances, building commercial partnerships, and pursuing publications in scientific journals.” Theranos unveiled its miniLab platform in August at the American Association for Clinical Chemistry meeting.

The miniLab technology miniaturizes analytical testing equipment across different testing methods, including hematology, immunology, clinical chemistry, immunochemistry, and nucleic acid amplification.

Holmes discussed the company’s Zika nucleic acid amplification-based assay for which the company had hoped to secure FDA emergency use authorization. The firm later withdrew its request for emergency use authorization following an FDA inspection that found irregularities in protocols for trials conducted in the Dominican Republic.

CMS Sanctions

CMS sanctions prohibit Holmes from owning or operating a lab. The company has announced plans to appeal the CMS sanctions imposed on the company’s Newark, Calif., lab following multiple quality control failures at the blood testing company.

CMS also revoked the company’s Clinical Laboratory Improvement Amendments certificate, imposed monetary penalties, suspended the lab’s approval to be reimbursed by Medicare and Medicaid and said it would oversee a directed correction plan for the beleaguered company.

Following a CMS noncompliance determination in March, Theranos rescinded test results from the past two years for its Edison blood-testing diagnostics. The company issued corrected test results to doctors and patients and also voided results for some tests. In addition to filing a plan of correction, the company suspended further testing.

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