Embattled blood-testing firm Theranos to dissolve

Pearl Mccarthy
September 6, 2018

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 company was using routine blood-testing equipment for the vast majority of its tests.

"Because the Company's cash is not almost sufficient to pay all of its creditors in full, there will be no distributions to shareholders", the letter states. Holmes said she was inspired to start the company in response to her fear of needles.

Theranos attracted more than $700m worth of backing from a glittering line-up of investors and recruited some of America's most powerful statesmen, including former secretaries of state Henry Kissinger and George Shultz and the current defence secretary James Mattis, to its board. The company claimed it could perform a number of traditional lab tests with just a few drops of blood. Founder and former CEO Elizabeth Holmes is facing criminal charges.

Holmes was seen for a time as a rising star in Silicon Valley, appearing at events like the Women In Technology and Politics dinner hosted by Glamour and Facebook, the Vanity Fair New Establishment Summit and events hosted by the Wall Street Journal and TechCrunch.

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In March, US securities regulators accused the youthful entrepreneur of an "elaborate, years-long fraud". Holmes settled with the SEC by agreeing to pay $500,000 in fines and penalties, while Balwani is fighting the charges.

Investors bought what Holmes was selling and invested hundreds of millions of dollars in the company.

Quite apart from the crushing losses for investors, this secrecy and cult-like nature had other real-world consequences, with many patients likely to have received erroneous blood test results.

Theranos Chief Executive Officer Elizabeth Holmes speaks on stage at the Glamour Women of the Year Awards where she receives an award, in the Manhattan borough of NY, U.S., November 9, 2015.

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