AMGN Amgen Inc

By John Carreyrou 

A top executive who helped build Theranos Inc. into a major blood-testing laboratory is leaving the company amid regulatory probes of the embattled Silicon Valley firm.

The departure of Sunny Balwani as Theranos President and Chief Operating Officer comes amid a broader board reorganization announced by the Palo Alto, Calif., firm. In a release late Wednesday, Theranos said it is expanding its board, adding three members to beef up its scientific and medical expertise.

The 51-year-old Mr. Balwani, a top associate of Theranos founder Elizabeth Holmes, leaves in the wake of last month's news that the Securities and Exchange Commission and the U.S. attorney in San Francisco are investigating whether the company misled investors and regulators about the state of its technology and operations. Theranos said it is cooperating with the investigations.

Theranos also is attempting to persuade the Centers for Medicare and Medicaid Services, the federal agency that oversees clinical labs, not to shut down its northern California laboratory. Closure of the lab would result in Ms. Holmes and Mr. Balwani being barred from the blood-testing business for at least two years, under federal regulations.

Mr. Balwani joined Theranos as its No. 2 executive in 2009, five years after Ms. Holmes founded the company upon dropping out of Stanford University as a 19-year-old sophomore.

"I am deeply grateful for the opportunity to contribute to Theranos' mission to make healthcare accessible through its technology and products," Mr. Balwani said in a statement. "I will continue to be the company's biggest advocate and look forward to seeing Theranos' innovations reach the world."

Since launching Theranos in 2003, Ms. Holmes has set out to revolutionize the blood-testing industry. Before the company made changes to its website earlier this year, the website cited "breakthrough advancements" that made it possible to run "the full range" of lab tests on a few drops of blood pricked from a finger.

In October, The Wall Street Journal reported that Theranos did the vast majority of more than 200 tests it offered to consumers on traditional lab machines purchased from other companies. The Journal also reported that some former employees doubted the accuracy of a small number of tests run on the devices Theranos invented, code-named Edison.

Theranos has declined to say how many tests or which ones it runs on commercial machines. The company has said its technology has the capability to handle a broad range of tests.

Write to John Carreyrou at john.carreyrou@wsj.com

(END) Dow Jones Newswires

May 11, 2016 21:34 ET (01:34 GMT)

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