Published: Fri, September 07, 2018
Health Care | By Cedric Leonard

Blood-Testing Firm Theranos Will Formally Dissolve, Report Says

Blood-Testing Firm Theranos Will Formally Dissolve, Report Says

In an email to shareholders, David Taylor, the current CEO of Theranos, announced that the company will dissolve and its remaining funds will be given to its unsecured creditors (via the Wall Street Journal).

Elizabeth Holmes, founder of the embattled blood-testing company, was charged with fraud alongside Ramesh "Sunny" Balwani, the former chief operating officer of Theranos.

Holmes was succeeded as CEO by Taylor in June this year, after the former was indicted with nine counts of wire fraud and two counts of conspiracy to commit wire fraud by a United States grand jury.

Theranos is closing up shop, The Wall Street Journal reported on Tuesday night, citing a shareholder email. If convicted, they will face up to 20 years jail time and a fine of $250,000 per count.

It began with a promise of a revolutionary blood-testing machine and the allure of a young scientist named Elizabeth Holmes.

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

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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Among the charges with which they have been indicted is claiming to investors that Theranos would enjoy sales of $1bn in 2015 when, in fact, it made just a few hundred thousand dollars.

Corrections & Clarifications: A previous version of this story misstated venture capitalist Marc Andreessen's relationship with Theranos.

According to a report by the WSJ, American business and government leaders had lost more than $600 million by privately investing in Theranos.

Ultimately, blame must be laid at the cult of hero worship that sprung up around Elizabeth Holmes, much as it did around Steve Jobs, and more recently, Elon Musk.

The company did not immediately respond to Ars' request for comment. Cue a slew of lawsuits, commercial challenges and investigations from investors and medical regulators alike, with titans like the US Securities and Exchange Commission (SEC) and Centers for Medicare and Medicaid Services (CMS) wading in on the action against Theranos.

On the strength of her claims, Theranos rolled out its vaunted finger-stick blood tests in Walgreens stores in California and Arizona and rocketed to a valuation of more than $9 billion, making Ms. Holmes a billionaire and media celebrity.

FOX Business' Brittany De Lea contributed to this article.

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