You are using an older browser version. Please use a supported version for the best MSN experience.

Theranos’ COO retires as the troubled bio-tech startup overhauls its organizational structure

TechCrunch TechCrunch 12/05/2016 Catherine Shu

The chief operating officer of Theranos, the beleaguered medical diagnostics startup currently under federal investigation for making misleading claims about its blood analysis technology, is stepping down as the company reorganizes its structure.

In a blog post, Theranos said that its president and chief operating officer, Sunny Balwani, will retire.

Theranos also plans to create a new structure with separate divisions for technology and clinical operations, which it is currently conducting leadership searches for. TechCrunch has emailed Theranos for more information about what each new division will oversee and what prompted Balwani’s retirement.

Balwani is also stepping down from Theranos’ board, which will add three new directors: Dr. Fabrizio Bonanni, who held senior positions at biotech companies Amgen and Baxter International; epidemiologist Dr. William Foege, a former director of the Centers for Disease Control who is probably best known for his role in the eradication of smallpox; and Richard Kovacevich, who was CEO of Wells Fargo from 1998 to 2007.

Both Foege and Kovacevich were already members of Theranos’ board of counselors and their new appointment as directors will give them a “more direct role in decision-making and shaping the company,” said the announcement.

Theranos is currently under investigation about whether it misled investors about its technology and operations by several government bodies, including the Securities and Exchange Commission, the U.S. Attorney’s Office for the Northern District of California, and the State Departments of Health in Pennsylvania and Arizona.

The Center for Medicare and Medicaid Services is also investigating the company for “serious deficiencies” in its testing practices which might have put patient wellbeing at risk. If sanctions are imposed by the CMS, that means Balwani and Theranos founder/CEO Elizabeth Holmes may be banned from owning or running any lab for at least two years.

More from TechCrunch

image beaconimage beaconimage beacon