The Theranos Story, ch. 21: the denouement of tears, fears and lawsuits

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2015/11/upside-down-duck.jpg” thumb_width=”150″ /]Finally, Theranos sinks its labs, Wellness Centers…and 340 employees. Since founder/CEO/controlling shareholder Elizabeth Holmes has been banned by CMS from running any labs for the next two years, shutting ’em down makes total sense in terms of saving her job. (Of course, if you are one of those fired employees in Arizona, California or Pennsylvania, it doesn’t. But hey, you may be worth more than Ms Holmes!) What she’s betting what is left of the company on is the miniLab, which hasn’t exactly come heartily out of the gate. It was Gimlet Eyed at the AACC annual meeting in Philadelphia, then shortly thereafter she withdrew from FDA review a Zika test using the miniLab due to lack of a patient-safety protocol approved by an institutional review board. (Tsk, tsk–Ed.)

Now the news of a lawsuit by a major investor will, in its process, reveal more of the Bubble That Was Theranos and possibly put the banana peel under the pivot. Investors sank over $800 million into the company, and one of them, Partner Fund Management, wants its $96 million back like Lee Marvin as Walker in Point Blank. According to the Wall Street Journal, which originally wielded the needle, the charges are that they and other funds were lured in by fraudulent claims and various misrepresentations of the Edison technology and its effectiveness–in other words, that they had labs and tests that actually worked. The SEC continues to investigate, including subpoenaing Partner and possibly other investors.  ABC News, Wall Street Journal (search on title ‘Major Investor Sues Theranos’ if you hit the paywall), Gizmodo 30 Aug, 11 Oct (a wonderfully Gimlety take by Eve Peyser), and a series of acid flashbacks in Forbes

See here for the 20 previous TTA chapters.