really sounds if they went to certification's stage too early, regulatory bodies do not tend to support rapid iteration of products
I disagree. 21 CFR 820 is deliberately written such that it does not prescribe any one specific development process; AAMI TIR-45 for example aligns agile methodologies with medical device software development and is an FDA recognized consensus standard.
What regulatory bodies do demand is that one document what one will do, and then, actually do what one has documented. Sounds like Theranos had trouble with that.
While the medical field certainly has additional concerns I do see a time where, with proper processes in place, that the final delivery may not exactly be what entered the certification phase.