Theranos, the once-celebrated Silicon Valley blood testing firm, is about to dissolve itself months after top executives were indicted for defrauding investors, the Wall Street Journal reported on Wednesday.
The company will seek to pay unsecured creditors its remaining cash in coming months, the Journal said, citing a shareholder email. To read on the go, sign up today to get biotech news and updates delivered right to your inbox! As the former CEO Elizabeth Holmes is facing fraud charges, the company has been mired in a myriad of scandals. Theranos didn't respond for a request to comment outside regular business hours.
Theranos, most widely known for its fake blood testing devices which could run batteries of tests in mere moments, is now officially shutting it all down. In reality, the SEC says, the analyzer could only complete a small number of tests, and the company "conducted the vast majority of patient tests on modified and industry-standard commercial analyzers manufactured by others". "We are now out of time", Taylor wrote. The Journal reports that most of the company's remaining employees worked their last day on August 31, while Taylor and a few others have just a few more days on the payroll.
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Mr Taylor said the firm had breached the terms of its loan agreement with investor Fortress Investment Group, meaning the firm was now entitled to sell or take ownership of Theranos' intellectual property and assets. By 2014, they were estimated to be worth $9 billion.
The Fortress Investment Group loaned $65 million to Theranos past year, with one condition being that Theranos maintain a cash level that has now been breached-hence the dissolution process that will play out over the coming months. But that unraveled spectacularly under the scrutiny of Wall Street Journal investigative reporter John Carreyrou.