The Theranos Story, ch. 29: Blame the scientists! Bring on the lawyers!

click to enlargeIt was the fault of the scientists and the investors! That is the speculation of Quora poster Drew Smith, a former R&D director at biotech firms MicroPhage and SomaLogic. It was a round robin of founder/CEO Elizabeth Holmes’ all-too-rosy forecasts and scientists not wanting to toss a wet wool blanket on the fun by telling her what she didn’t want to hear. Mr Smith, from where his experience lies, believes that the scientists discarded the testing with bad results, passing on only the good even if flawed, in a delusional circle that ultimately went pear-shaped. Then there were the investors, who didn’t apply the usual Deep Discount to the Big Hype that all entrepreneurs weave around the Revolutionary Whatevers, for whatever reason. On this, Mr Smith doesn’t speculate. It must have been those wide-screen blue eyes, black turtlenecks, and nanotainers that kept them mesmerized. Theranos wouldn’t be the first company that failed because they believed their own press releases and pictures! Forbes  Hat tip to reader Bill Oravecz of Stone Health Innovations and WTO Associates.

And the law firms multiply. Continuing to fight Theranos’ many lawsuits in multiple courts are a bevy of Big Law firms. In Chapter 26, Boies Schiller exited, stage left, and Wilmer Hale (formally Wilmer Cutler Pickering Hale and Dorr) entered. Wilmer Hale is representing Theranos in the California class action lawsuit described in Chapter 27 and what we’ve deduced is the Partner Fund Management lawsuit filed in Delaware (Chapter 21). Here’s where Santa unloads his jolly pack of toys for the Law Boys. Cooley LLP (32nd on The American Lawyer’s 2016 Am Law 200 ranking) is busy representing Ms Holmes, who has been separately sued by Partner Fund Management, and defending an Arizona lawsuit (Chapter 22). And on deck for Theranos in the Walgreens action, also in Delaware? (Chapter 23) Newcomer Wilkinson Walsh + Eskovitz, founded earlier this year by top trial lawyers from larger firms. All those billable hours add up to gold in their stockings, coal in Theranos’. Law.com

See here for the 28 previous TTA chapters in this Continuing, Consistently Amazing Saga.

Categories: Latest News, Opinion, and Soapbox.

The Theranos Story, ch. 26: counsel Boies, Schiller & Flexner departs, disagreeing

click to enlargeAppearing in the netherworld of a Saturday weekend edition before a holiday week was this tidbit in the Wall Street Journal announcing that Theranos‘ legal representation will no longer be big, politically connected NY-based law firm Boies, Schiller & Flexner. Their replacement is a big, politically connected Washington, DC-based law firm, WilmerHale.

Reasons why, according to the John Carreyrou article, are disagreements on how to handle the ongoing multiple government investigations of Theranos. It also follows the September departure of in-house general counsel, and former Boies partner, Heather King, who is returning to the firm. Her replacement is David Taylor, who has no visible ties to WilmerHale.

According to Mr Carreyrou, Mr Boies “became Theranos’s outside counsel after being approached in 2011 by two investors in the Palo Alto, Calif., startup. He fiercely defended Theranos against questions about its technology and operations.” Those actions included threats of legal action against the WSJ and pressuring whistleblower Tyler Shultz (ch. 25).

Mr Boies also sits on the Theranos board. His fate there is not disclosed, yet.

David Boies is known as a bare-knucks litigator involved in high profile cases defending Sony, American Express and Big Tobacco, and against Medco, Microsoft and George Bush in the 2000 presidential election. At 75, the chairman is one of the best known figures in what is colorfully termed Big Law.

Perhaps another reason why is found at the end of the article. “The law firm was paid in Theranos stock for its work on the patent case, according to a person familiar with the matter. Boies Schiller was granted more than 300,000 shares valued at $4.5 million, based on a valuation of $15 a share at the time, this person said.” Since this $9 bn Unicorn is now worth about $9, this was a bad investment, indeed.

But Elizabeth Holmes, and whoever is left, are soldiering on to “show who we are through our inventions.” Indeed.

If the link hits the paywall, search on “Theranos and David Boies Cut Legal Ties”.  See here for the 25 previous TTA chapters in this Continuing Saga.