Embattled blood-testing firm Theranos to dissolve

Henrietta Brewer
September 6, 2018

Under founder and now-former CEO Elizabeth Holmes, Theranos raised more than $700 million from investors and was valued at $9 billion at its peak.

Biopharma is a fast-growing world where big ideas come along every day. Starting in a basement located a few blocks away from campus, Holmes transformed her company to be worth over $1 billion in seven years time. But that unraveled spectacularly under the scrutiny of Wall Street Journal investigative reporter John Carreyrou.

The announcement of the closure comes almost three months after Theranos founder Holmes and Chief Operating Officer Ramesh Balwani were charged with criminal fraud. Mr. Balwani was Theranos's president and chief operating officer until he retired from the company in May 2016. If convicted, they could face prison sentences that would keep them behind bars for the rest of their lives, and total fines of US$2.75 million each.

Ms. Holmes sought to disrupt the blood-testing business. At one point, the business was valued at nearly $10 billion, largely on the strength of its promise to provide blood testing through just a drop or two of blood. As the former CEO Elizabeth Holmes is facing fraud charges, the company has been mired in a myriad of scandals.

In 2017, Theranos agreed to a two-year ban from the blood-testing business. The pharmacy chain has said it was misled by Theranos about its technology and prospects. The company claimed it could perform a number of traditional lab tests with just a few drops of blood.

Theranos become a symbol of the excesses of the current technology boom. A biochemist who worked at Theranos for eight years committed suicide in 2013 after becoming distraught by its culture of fear and secrecy and its lack of progress with its technology, according to his widow. Each invested $100 million or more in Theranos-investments that are now worthless.

Mr Taylor said the firm had breached the terms of its loan agreement with investor Fortress Investment Group, meaning the firm was now entitled to sell or take ownership of Theranos' intellectual property and assets.

Other reports by iNewsToday