Less than two years after appearing on the cover of Fortune magazine, Elizabeth Holmes, CEO of Theranos, has been banned from lab operation by federal regulators.
In 2003, Holmes dropped out of Stanford and founded Theranos, a pioneering biomedical testing company. According to Fortune, Theranos’ innovations led to blood tests that use only a few drops of blood from a finger prick. Faster, smaller, and cheaper than traditional testing equipment, Theranos’ machines were poised to revolutionize the biomedical diagnostics industry.
In a 2014 profile of Holmes for Fortune, Roger Parloff called Theranos “revolutionary.” At that time, the company had more than 500 employees and was valued at $9 billion. The company’s board, which included such figures as Henry Kissinger and George Shultz, was called perhaps “the single most accomplished board in U.S. corporate history.”
The profile included glowing quotes from colleagues and experts about Holmes’ leadership, work ethic, and innovative thinking. Holmes became a celebrity of the business world, drawing comparisons to Steve Jobs.
The company fell under increasing scrutiny in 2015 as federal regulators questioned the accuracy of Theranos’ testing. According to the Atlantic, the U.S. Department of Health and Human Services found deficiencies in the company’s lab practices and technology that essentially invalidated two years of test results.
Theranos was forced to “throw out” the questioned results. Shortly afterward, drugstore chain Walgreens ended its partnership with Theranos, and the company’s board began to crumble.
In a statement to the press, Holmes said the company accepted full responsibility for the issues and was working to rebuild the company and lab structure.
However, according to the Department of Health and Human Services, Theranos failed to adequately prove that the company had solved the problems. On July 9, the government revoked certification for the company’s California laboratory and banned Holmes from owning or operating a lab for the next two years. Theranos was also fined an unspecified amount.
Holmes has been under pressure to resign her position as CEO, says NPR, but remains CEO for the time being.
Today, Forbes estimates Holmes’ net worth as zero – down from $4.5 billion at its peak.