Theranos And Walgreens Settle Lawsuit

(RTTNews) - Theranos Inc., the much criticized blood-testing startup, announced Tuesday that it has settled a lawsuit brought by former partner and drugstore chain Walgreens and its parent, Walgreens Boots Alliance Inc. over blood tests.

The companies did not disclose the terms of the settlement. In a statement, Theranos said, "The agreement will result in the dismissal of Walgreens' lawsuit against Theranos, with no finding or implication of liability."

Theranos, led by founder and Chief Executive Elizabeth Holmes, had developed a novel finger-prick blood testing technology that was easier for patients with less cost.

Walgreens had entered into a partnership, under which the tests were available at 40 Walgreens stores in Arizona. However, Theranos faced criticism over the tests' accuracy and about its technology. Health regulators also found the startup out of compliance with certain federal lab requirements.

Following this, Walgreens terminated its partnership and filed its lawsuit that alleged breach of contract, stating that the blood testing technology didn't work as advertised and produced inaccurate results.

In its statement, Theranos further said, "Over the past 16 months, the Company has built a new senior management team, changed the composition and structure of its Board of Directors, installed an expert technology and scientific advisory board, and implemented a new quality and compliance program. Theranos recently closed on a recapitalization of its recent investors, unifying their support as the Company moves toward commercializing its innovative technologies."

A year ago, federal regulators banned Holmes from owning or running a medical lab for two years. In October last year, the company shut down its labs and laid off more than 40 percent of its workforce. The company is now focused on developing a portable blood-testing device called the MiniLab.

Theranos in April reached a settlement with the federal Centers for Medicare and Medicaid Services that regulate blood-testing labs.

Theranos also agreed to return $4.65 million to consumers in Arizona who paid for tests, along with $200,000 in civil penalties paid to the Arizona attorney general's office.