The president of Theranos Inc. will retire as the embattled blood-testing company shuffles its leadership.
The Palo Alto company — which has been the target of multiple federal investigations since questions arose about the accuracy and reliability of its tests — added three new members to its board of directors and said it will change its organizational structure and implement specific corporate divisions for technology and clinical operations.
President Sunny Balwani, who also served as the company's chief operating officer, was key to the firm's product development and growth, Theranos said in a statement Wednesday. The company also said it has initiated searches for "multiple executive positions." No date has been set for Balwani's retirement; the company said he will stay on through the transition process.
"Sunny has made invaluable contributions to Theranos' technology and business," the board of directors said in a statement. "We will miss him as a board member and are grateful for his extraordinary service."
The three new board members are Fabrizio Bonanni, a former Amgen Inc. executive vice president; Richard Kovacevich, former chief executive of Wells Fargo & Co.; and William Foege, former director of the Centers for Disease Control and Prevention. Theranos said Foege has been working closely with the company as it prepares to "publicly introduce its technologies."
Theranos spokeswoman Brooke Buchanan said the additions to the board, as well as the reorganization, are part of the "next evolution of Theranos as a company."
The company, founded in 2003, gained attention for its claims that its technology could test for a variety of conditions with just a few drops of blood. But it has faced increased scrutiny by federal and state regulators about the reliability and accuracy of its tests after an investigation by the Wall Street Journal raised questions about the capabilities of Theranos' Edison lab instrument. The company told the Journal that it did not exaggerate its achievements.
Last month, the federal centers for Medicare and Medicaid Services said Theranos was out of compliance with certain federal lab requirements. In a letter sent to the company, regulators proposed revoking the federal license for Theranos' California laboratory and banning its two top executives — Balwani and Chief Executive Elizabeth Holmes — from the blood-testing business for at least two years.
Buchanan said Balwani's retirement was not related to these proposed sanctions.
Theranos is also being investigated by the Justice Department and the Securities and Exchange Commission. The company said last month that investigations by the U.S. Food and Drug Administration and the state departments of health in Pennsylvania and Arizona had been "successfully closed out."