Embattled Theranos CEO Running Out of Money Following Multiple Lawsuits
Health tech company Theranos Inc. and its embattled CEO, Elizabeth Holmes, settled with drugstore giant Walgreen Co. for more than $25 million, marking the company's latest settlement in a stream of lawsuits from companies, regulators, and investors.
"Today we announced that Theranos has entered a confidential settlement agreement with Walgreens," the company said in a statement Tuesday, according to the Wall Street Journal. "The agreement will result in the dismissal of Walgreens' lawsuit against Theranos, with no finding or implication of liability."
Walgreens spokesman Michael Polzin told the Journal that the matter "has been resolved on mutually acceptable terms."
Walgreens was once a prominent partner of Theranos, but in November, the pharmacy chain sued Theranos for $140 million in damages to reclaim the money it had spent on the partnership. Walgreens alleged that Theranos breached their contract and misled it about the effectiveness of the health company's blood-testing devices.
An investigation by the Journal in 2015 found that Theranos misled the public about the capabilities of its blood-testing technology. The Centers for Medicare and Medicaid Services later banned Holmes from operating blood-testing labs for two years. Months later, Theranos shut down its blood-testing facilities and laid off 40 percent of its workforce.
The blood-testing technology was once thought to be revolutionary and helped make Holmes, a prominent Hillary Clinton supporter and "ambassador for global entrepreneurship" under former President Barack Obama, a Silicon Valley star. But the Journal‘s revelations and the subsequent fallout led to a flurry of lawsuits against Theranos. Forbes dropped Holmes' estimated net worth from $4.5 billion to zero after the revelations surfaced and led to investigations from several agencies.
Holmes, 33, had once been the youngest self-made female billionaire in the world. She also had been politically active, holding a fundraiser for Clinton during the 2016 presidential campaign. Clinton's team was not thrilled about its association with Holmes, however, debating at times over email whether the campaign should distance itself from the embattled CEO.
Theranos' $25 million settlement is no small fee for a company that was once valued at $9 billion. The company is already burning through its cash reserves while working through a series of disputes and lawsuits.