Disgraced blood-testing company Theranos failed a second inspection of its lab facilities before shutting down in October, but didn’t bother to disclose that information to investors or patients, The Wall Street Journal reported Tuesday night, citing sources close to the matter. Having already had its testing license for a California lab revoked over problems that put patients’ health in “immediate jeopardy,” the company may now face additional penalties, the report said. The Centers for Medicare and Medicaid Services finished its inspection of the second of the company’s two labs in Scottsdale, Arizona, on Sept. 29, according to the report. After finding “deficiencies” there, Theranos devised a plan to correct the deficiencies, but that plan was later rejected by regulators, who proposed further sanctions instead. The company continued to carry out testing at the facility even after the problems were uncovered, until announcing on Oct. 5 that the company would cease medical testing, according to the report.
After the problems were uncovered last year, the company announced it was voiding years’ worth of blood-test results because of its flawed technology, with many patients having received inaccurate diagnoses. The Silicon Valley blood-testing firm is also reportedly under criminal investigation by federal prosecutors, who believe the startup misled investors and government officials about the veracity of its technology. As part of the sanctions already imposed on the company, CEO Elizabeth Holmes has been hit with a two-year ban from the blood-testing industry.