Wednesday, 21 November, 2018

Theranos, Elizabeth Holmes' startup, is shutting down for good

Forbes Under 30 Summit Theranos the blood-testing company founded by Elizabeth Holmes is going out of business. Gilbert Carrasquillo Getty Images
Melissa Porter | 07 September, 2018, 11:32

Theranos, the one-time Silicon Valley biotech star valued at more than $9 billion, has ultimately run out of money, employees and time.

In June, the US Justice Department said a federal grand jury in California indicted Holmes, 34, and Ramesh "Sunny" Balwani, 53, who had been president and chief operating officer.

Theranos has told its investors that the company will wrap up, paying "unsecured creditors its remaining cash", according to the Wall Street Journal.

Enjoying this story? Subscribe to FierceBiotech! At one time, Holmes was the youngest self-made female billionaire.

The liquidation process could take from six to 12 months, Taylor said in the email.

Taylor's email appears to herald the final stages of Theranos, which was once one of Silicon Valley's most lauded startups, drawing investments from Oracle (ORCL) founder Larry Ellison and media mogul Rupert Murdoch.

Holmes and the company have since settled these allegations.

Theranos Chief Executive Officer Elizabeth Holmes speaks on stage at the Glamour Women of the Year Awards where she receives an award, in the Manhattan borough of NY, U.S., November 9, 2015. As per the Securities and Exchange Commission's charges against them stated that the company had made huge profits to the tune of $700 million over long years by making false statements and showing false claims about the credibility of the company's technology, innovations, business, and financial performance.

A notoriously secretive company, Theranos shared very little about its blood-testing machine, nicknamed Edison, with the public or medical community.

Prosecutors alleged that they defrauded investors out of hundreds of millions of dollars and defrauded doctors and patients.

In April 2017, the Centers for Medicare and Medicaid Services (CMS) sanctioned Theranos and revoked its clinical laboratory testing certificate, which caused the pharmacy chain Walgreens to terminate its partnership with the start-up and sue Theranos for $140m. Balwani refused to settle with the SEC.

Investors lost nearly $1 billion in the company, The Journal reported.

There are many outstanding questions surrounding Theranos, not least the outcome of Ms Holmes and Mr Balwani's forthcoming fraud trial, as well as whether the remaining patents being acquired by Fortress will turn out to have any lasting value.

But as the Journal revealed in a series of articles beginning in October 2015, Theranos's blood-testing device was unreliable and the company used it for just a fraction of the more than 240 tests it offered to consumers.