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Friday, April 21, 2017

Theranos is being accused of running fake tests using outside lab gear

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Elizabeth Holmes

New court filings allege that Theranos used a shell company to purchase commercially available lab equipment and faked blood tests in presentations with prospective investors and business partners, The Wall Street Journal reported Friday

The documents were filed as part of Partner Fund Management’s lawsuit against the blood-testing company.

Before October 2016, Theranos’s business model was based around the idea that it ran blood tests using proprietary technology that requires only a small amount of blood. 

A spokeswoman for Theranos pointed to the company’s response to the Journal. It told the paper it disagrees with the claims. Read the full Wall Street Journal story here.

Partner Fund originally sued Theranos in October 2016, claiming the company had engaged in securities fraud. The firm had invested $96.1 million in Theranos in 2014. 

It’s been a busy week for Theranos.

  • On Monday, Theranos said that it had settled up with Centers for Medicare and Medicaid Servicesthe government agency responsible for regulating blood-testing labs. As part of the settlement, Theranos has to pay $30,000, and the company won’t be able to own or operate a clinical lab within the next two years. In return, the CMS is no longer revoking Theranos’s CLIA certification, which is needed to run a blood-testing lab. 
  • On Tuesday, Theranos agreed to pay Arizona $4.65 million to refund anyone who paid to take one of Theranos’s blood tests, and will also pay $225,000 to cover civil penalties and attorneys’ fees.

Theranos has been under fire since October 2015 after the Journal published an investigation that questioned the accuracy of its blood test. One of the company’s locations was shut down, and its founder — Elizabeth Holmes — was barred for two years from running a clinical lab

The company faces lawsuits from investors, patients, and its once partner Walgreens, which ended its relationship with Theranos in June 2016 and is accusing Theranos of breaching its contract. Theranos has said it will “respond vigorously to Walgreens’ unfounded allegations.”

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April 21, 2017 at 11:30PM

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from Lydia Ramsey

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