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Walgreens: Theranos Misled It, Sues for $140M in Damages

Image: Walgreens: Theranos Misled It, Sues for $140M in Damages

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By    |   Wednesday, 09 Nov 2016 10:32 AM

Walgreens sued Elizabeth Holmes' Theranos Inc. for $140 million in a Delaware federal court this week, charging that its former laboratory-testing partner broke its contract.

In a civil lawsuit filed under seal, Walgreens Boots Alliance Inc. is demanding $140 million in damages, which matched the amount of money the drugstore giant invested in Theranos, the Wall Street Journal quoted sources familiar with the lawsuit.

Walgreens is charging that Theranos misled it about the state of its technology when the two signed their agreement.

Theranos said in a statement to Reuters that Walgreens "consistently failed to meet its commitments to Theranos" and mishandled the companies' partnership.

"We will respond vigorously to Walgreens' unfounded allegations, and will seek to hold Walgreens responsible for the damage it has caused to Theranos and its investors."

Walgreens announced in June that it was ending its relationship with the troubled laboratory and closing operations at 40 blood-draw sites that the company ran in Arizona at Walgreens' stores, said Reuters.

Theranos, which was founded by Holmes in 2003, was a Silicon Valley success story, claiming it developed a way to test for cancer and other ailments with only a few drops of blood, and do it cheaper and faster than current methods, said Fortune.

Her company, which had grown to 500 employees as investors pumped $9 billion into it, was damaged by a 2015 Wall Street Journal investigation that cast doubts on Theranos's tests.

A January letter from the Centers for Medicare and Medicaid Services claiming that Theranos' blood tests "pose immediate jeopardy to patient health and safety," sparked a downward slide, said Forbes.

Last month, Theranos investor Partner Fund Management sued, charging the laboratory with "myriad deceptions, falsehoods and fraudulent conduct," according to The New York Times.

Partner Fund Management claimed in a letter, according to the Times, that Theranos engaged in "a series of lies, material misstatements and omissions" to get it to invest.

Theranos announced in October that it was shutting down its clinical labs and wellness centers and laying off about 340 employees, about 40 percent of its full-time staff, reported The Associated Press.

That announcement came almost three months after federal regulators banned Holmes from owning or running a medical laboratory for two years after an investigation of its California facility, noted The AP.

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Walgreens sued Elizabeth Holmes' Theranos Inc. for $140 million in a Delaware federal court this week, charging that its former laboratory-testing partner broke its contract.
walgreens, theranos
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2016-32-09
Wednesday, 09 Nov 2016 10:32 AM
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