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Federal regulators have barred Elizabeth Holmes, chief executive of Theranos, from owning or operating a medical laboratory for at least two years, raising new questions about the future of the embattled blood-testing start-up and its founder, once a Silicon Valley phenomenon.
In a letter sent to Theranos that was made public on Friday, regulators said they were revoking the certification of its flagship laboratory in Newark, Calif., effective Sept. 5. They also said the laboratory would be prohibited from taking Medicare and Medicaid payments.
The government scrutiny stemmed from questions about the effectiveness of Theranos’s technology and the way the company operated its labs.
The company faces a fine of $10,000 for every day it is out of compliance with regulations, effective July 12.
Such stern sanctions are “virtually unheard-of in my 40 years’ experience in the industry,” said David Nichols, president of the Nichols Management Group, a consultant to and operator of clinical laboratories. “I don’t see a path forward for the company.”
What Theranos and Ms. Holmes will do next is not clear. The company said in its...