Blood-testing startup Theranos is trying to hold its head high through another volley of scrutiny. Today the embattled drug testing startup received a letter from federal regulators citing serious problems in the company’s California laboratory.

How bad is it? Theranos is able to test blood because federal health inspectors have certified that its labs meet certain conditions. Today’s letter says that the lab is deficient in meeting several of those conditions, and it’s very serious, says Ed Thornborrow, medical director at UC San Francisco’s clinical labs. “It means the Centers for Medicare and Medicaid Services fear you are operating in a manner that could cause immediate jeopardy to patients,” he says. From the relatively vague details in the statement, it appears that Theranos’ CLIA-certified testing facility in the marshy south San Francisco Bay had problems that extended all the way up to its lab director.

The company has ten days to respond to the citations, otherwise the feds could start hitting the company with serious fines—or shut the lab down. “This type of letter is one step down from ‘we’re shutting you down immediately!’,” says Tim Hammill, director for UC San Francisco’s China Basin clinical labs. “Then again, any details are completely conjecture because the letter doesn’t say what Theranos is being cited on.”

In other words, kick back a few grains of salt before you read between the lines. Ready? OK, let’s dive in, starting with hematology. Of the five violations listed, the worst applies to the company’s deficient blood work tests, which “pose immediate jeopardy to patient health and safety.” In an emailed response, Theranos points out that this violation does not apply to the lab as a whole. Which is right: This is only a subset of tests that rely on analyzing red cells, white cells, and platelets—not proteins, antibodies, or other markers found in bodily fluids.

The second infraction, analytic systems, is similarly vague. But Hamill says it most likely refers to a commercial system, in other words not something the company developed in house. The biggest clues come from the final three bullet points, which collectively imply that the people Theranos hired to run its California lab were running things into the gutter.

Which Theranos makes a point of addressing in its response. “As part of our review, we have made policy and personnel changes in our Newark, CA lab,” the company writes. Their, ahem, new blood includes lab director Dr. Kingshuk Das, previously associate director of UCLA’s clinical labs; and clinical consultant Dr. Waldo Concepcion, formerly chief of clinical transplantation at Stanford University Medical Center. It’s fair to speculate that the staff turnover has trickled down to the level of bench technician.

Theranos also mentions that the CMS audit doesn’t address recent allegations made by the Wall Street Journal and other publications. These charges include cheating on proficiency tests, manipulated data, and diluted samples, among others. Which is true, but the fact that those things aren’t mentioned in this report doesn’t mean they didn’t happen. As the company points out in the same response, over 90 percent of its tests go to its Arizona lab, which was not covered in this review. The status of those broader allegations isn’t necessarily moot, but certainly take a back seat to its more immediate problem: Keeping its doors open for business.

Check out the CMS letter for yourself:

Theranos-Inc-Cover-Letter-01-25-2016-0 (PDF)

Theranos-Inc-Cover-Letter-01-25-2016-0 (Text)

Original source:

Federal Regulators Say a Theranos Lab Has Serious Problems