Published: Thu, September 06, 2018
Health Care | By Cedric Leonard

Blood-testing startup Theranos said to be closing

Blood-testing startup Theranos said to be closing

The company told shareholders in an email that it will dissolve and pay out the remaining cash to creditors, according to the Journal.

Theranos, with Holmes at the helm, had claimed that it could run a slew of physiological tests with a simple pin-prick of blood.

The news comes as Theranos founder Elizabeth Holmes and her second-in-command face criminal charges on accusations that they defrauded investors, doctors, and patients.

The SEC charged Holmes and former President Ramesh "Sunny" Balwani with deceiving investors into believing the portable blood analyzer could conduct comprehensive blood tests from drops of blood. 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.

She carefully crafted her image as well, wearing nearly entirely black turtleneck sweaters that earned her the moniker in Silicon Valley as "the next Steve Jobs".

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

It was briefly one of the most celebrated companies in Silicon Valley - but Theranos, a company valued at $9bn (£7bn) at its peak, will soon be no more.

But an investigation by The Wall Street Journal two years ago found that Theranos' technology was inaccurate at best, and that the Palo Alto, California-based company was using routine blood-testing equipment for the vast majority of its tests.

The indictment by the U.S. Attorney in San Francisco alleging wire fraud follows claims by the U.S. Securities and Exchange Commission that Theranos, Holmes and Balwani lied about its technology while raising more than $700 million to build the medical-testing startup. The SEC accused them of lying about the company's abilities, financial health and connections to the Department of Defense.

David Taylor, the Theranos general counsel who took over as CEO after the disgraced Elizabeth Holmes finally resigned in June, wrote to the company's stockholders to say all efforts to sell the operation had failed.

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