Healthcare firm Theranos in trouble again with latest lawsuit
Consumer healthcare technology company Theranos is being sued again by investors, who say that the company has made false claims. This is the third claim filed against Theranos, which is already fighting lawsuits brought by Walgreens and Partner Fund Management (PFM), according to a report by Endgadget.
The latest to sue the company is Robertson Stephens & Company co-founder Robert Colman, who accused Theranos Inc. in its most recent lawsuit of making false and misleading claims about its operations and technology while soliciting money from its investors. The suit, filed in federal court, is seeking class-action status, meaning the bad news could keep pouring in for Theranos.
According to the Wall Street Journal, the lawsuit says that Colman agreed to invest in the company after Donald Lucas, founder of Lucas Venture Group, wrote a letter that Theranos had invited the firm to purchase $15 million in stock. The misleading comes in part from the agreement with Walgreens to give customers access to Theranos’ technology, which gave investors confidence.
The Wall Street Journal first broke the story of the once-promising biotech firm’s problems in 2015. The paper found that the company, led by Elizabeth Holmes, wasn’t using its groundbreaking technology for all the tests it offered, specifically those that claimed the company could process a full range of lab tests with just a few drops of blood.
The company has become the subject of a criminal investigation after its blood testing methods were found to be suspect and had put people in danger by not disclosing test deficiencies. Holmes, once the youngest self-made woman billionaire with a net worth of $4.5 billion, has seen her financial status drop to almost nothing, according to a story in Forbes. Holmes was banned from running the lab, Walgreens severed its ties and brought a lawsuit, and many Theranos employees were let go.
The Walgreens suit is seeking $140 million in damages and the latest suit, if it gets class-action status, the number could be the final nail in the Theranos coffin.