Theranos Searches for Director to Oversee Laboratory
What is Theranos?
Theranos is a privately held diagnostics and health-care start-up created by Elizabeth Holmes +
Elizabeth Holmes started Theranos when she was 19 after dropping out of Stanford in 2003 where she was studying microfluids and nanotechnology.
She claims she started Theranos around her self-professed phobia of needles.
She's also America's youngest female billionaire. Tweet
The company circumvents traditional blood testing by obtaining blood samples in "nanotainers" with just a finger prick. Theranos tests the samples with it's proprietary Theranos Edison blood testing device, claiming it can provide results for up to 30 tests in hours.
Theranos is valued at $9 billion, with funding amounting to over $400 million. 
The blood-testing company has been operating its Newark, Calif., lab for the past 10 months under the supervision of Sunil Dhawan, a dermatologist without a degree or board certification in pathology or laboratory science.
Why did Theranos scale back?
Under pressure from regulators, Theranos has stopped collecting tiny vials of blood drawn from finger pricks for all but one of it's tests.After a recent FDA inspection, officials told Theranos they considered the "nanotaniers" made and used by the company to be an unapproved medical device.
In order to resume testing, Theranos must resubmit data for many of the proprietary blood tests it has previously sought clearance for from the FDA.
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Are the blood tests accurate?
Early in 2014, Theranos performed proficiency tests, which measure if testing instruments can provide accurate results, using Edison machine and instruments from other companies. The two types of equipment gave different results when tested for Vitamin D, two thyroid hormones and prostate cancer.The gap suggested to some employees that the Edison results were off, according to internal emails and people famailier with the findings.
Some lab experts say finger-pricked blood samples can be less pure than those drawn from vein because finger-pricked blood often mixes with fluids from tissue and cells that can interfere with tests.
Dr. Dhawan, 56 years old, meets federal and state requirements to be a lab director because he is a medical doctor and has experience overseeing a lab. Theranos said he has supervised the lab affiliated with his dermatology practice for over 21 years.
However, some lab specialists say there is a difference between the skills required to analyze tissue specimens for signs of skin cancer, for instance, and those necessary to oversee a full reference laboratory, meaning one that performs a wide range of blood tests.
Despite this claim, at the end of 2014, the lab instrument developed as the linchpin of its strategy handled just a small fraction of the tests then sold to consumers, according to four former employees.
One former senior employee says Theranos was routinely using the device, named Edison after the prolific inventor, for only 15 tests in December 2014. Some employees were leery about the machine’s accuracy, according to the former employees and emails reviewed by The Wall Street Journal.
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Theranos Stats
Theranos is the most valuable health-care company among at least 125 companies world-wide that are valued at $1 billion or more by venture-capital investors, according to Dow Jones VentureSource. Theranos has raised more than $400 million from investors and has been valued at about $9 billion.This is sponsored content.
"When you consider the complexities of a reference lab with an expansive test menu, it would be next-to-unheard of to have anything less than a full-time pathologist or laboratory scientist with a Ph.D. as the laboratory director," says Ed Thornborrow, medical director of the clinical labs at the University of California, San Francisco. He said Theranos approached him about the lab-director job it is advertising.
Dr. Dhawan didn't respond to messages left at his dermatology practice in Fremont, Calif., or to an email inquiring about his lab experience.
Heather King, Theranos's general counsel, said "Dr. Dhawan is qualified to be the laboratory director of a high-complexity lab, and has many years of experience in that capacity,"" adding, "His training and expertise is highly relevant to the work that he performs for Theranos."
Dr. Dhawan's credentials as a dermatologist were previously reported by the Financial Times.
The company's Newark lab, then located in Palo Alto, was inspected by the Centers for Medicare and Medicaid Services, laboratories' chief regulator, in 2013, before Dr. Dhawan joined Theranos, according to an inspection report.
The inspectors listed several deficiencies, including results for several blood tests that they termed "unacceptable" and a lack of documented corrective actions on those and other issues. Theranos says that none of the deficiencies were serious, and that it promptly corrected them.
The lab's director at the time had extensive lab training and experience, having completed a three-year residency in clinical pathology at a Boston hospital and five years as director of a Pittsburgh lab. He left Theranos in December 2014, at which point Dr. Dhawan took over.
In recent weeks, Theranos has advertised the Newark lab-director position on its website and has approached directors of other labs in California to gauge their interest, according to people familiar with the matter and emails from Theranos recruiters reviewed by the Journal.
The first qualification Theranos lists on its website for the Newark lab-director job is "M.D. degree with Board Certification in Pathology."
On its site, Theranos has also posted three other senior positions at the Newark lab: lab manager; manager of quality assurance and quality control; and laboratory general supervisor. Lab experts say the four posts typically are a lab's senior leaders.
Ms. King, Theranos's general counsel, said: "We are a growing company and, simply because we have job openings posted or are interviewing people for those roles, does not mean that the laboratory does not already have such personnel; laboratories commonly have multiple people on staff serving with the same titles."
A Theranos lab employee who recently left the company says Dr. Dhawan didn't have a presence at the Newark lab.
Theranos's Ms. King, said that information was "at a minimum, misleading."
Theranos recently stopped drawing tiny blood samples from patients' fingers for all but one of its blood tests after the Food and Drug Administration inspected its facilities and deemed the miniature vials it used to collect the blood an "uncleared medical device." Theranos said the move was voluntary.