Medicine

Once-heralded blood-testing startup Theranos is closing

Once-heralded blood-testing startup Theranos is closing

Theranos founder Elizabeth Holmes settled a shareholder lawsuit in July that was created to recover whatever can be salvaged from the firm, the Journal said. It will formally disband in the coming months, according to an email to shareholders obtained by The Wall Street Journal.

According to the email, Theranos said it plans to spend the next few months repaying creditors with its remaining resources.

Neither Taylor nor representatives for Palo Alto, California-based Theranos immediately responded to Reuters' requests for comment. Former CEO Elizabeth Holmes' black turtleneck and lofty goals drew comparisons with Apple's Steve Jobs.

Theranos, founded in 2003 when Ms Holmes was 19, had claimed its Edison devices could test for conditions such as cancer and cholesterol with only a few drops of blood from a finger-prick, rather than taking full blood samples by needle from a vein.

It is the latest twist in one of the most dramatic rise-and-fall stories United States business has ever seen and comes three months after Elizabeth Holmes, who founded the company at the age of 19, was charged with fraud along with Sunny Balwani, her former lover and the company's former chief operating officer.

The Securities and Exchange Commission brought civil fraud charges against Holmes and Balwani in March.

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They used advertising and solicitations to encourage doctors and patients to use Theranos's blood testing laboratory services despite knowing the company could not produce accurate and reliable results consistently, prosecutors had said.

Theranos was once valued at $9 billion.

However, in October 2015, the Wall Street Journal published a front-page story that claimed the technology was flawed and that the company's former chief scientist had taken his own life two years earlier after telling his wife the technology did not work.

Theranos's other, unsecured creditors are owed at least $60 million, and the company is trying to negotiate a deal with Fortress that would see those creditors get the $5 million in cash that Theranos still holds.

"We are now out of time", Taylor said.