Theranos Shutting Down - What You Need to Know
Posted on September 05, 2018 by Medtech[y] Staff
According to WSJ reporter, John Carreyrou, the blood-testing company,Theranos, has emailed shareholders and has decided to shut the company down.
Here are five things to know -
1. Once valued at $9 billion and having raised over $900 million, the one-time Silicon Valley darling has decided to close their doors and use their remaining assets to pay back the remaining unsecured creditors. Shareholder email below Credit: WSJ
2. Theranos claimed they invented blood-testing machines that were capable of running a wide-range of blood tests using a single finger prick sample. WSJ reporter, John Carreyrou, did a great job explaining and exposing the fraud in his book, "Bad Blood."
3. Theranos founder Elizabeth Holmes and her second-in-command are already facing criminal charges that they defrauded investors, patients and doctors. The Centers for Medicare and Medicaid Services also dealt a blow to Theranos as they concluded the company had put numerous patients at risk.
4. On behalf of Theranos, Jefferies reached out to over 80 potential sale counter-parties—from large healthcare companies to niche, IP-focused buyers—and executed NDAs with 17 of those parties. They assisted those parties with diligence and had numerous follow-on conversations. Unfortunately, none of those leads materialized into a transaction.
5. In the email to shareholders, new Theranos CEO, David Taylor, wrote that the company was in default of a loan from Fortress Investment Group, which now has the right to take ownership of all of its assets. The company is still hopeful that they can reach a settlement with Fortress, which would allow them to distribute an estimated $5 million in cash to other creditors. Taylor shared that in addition to Fortress, the company owes at least $60 million to their unsecured creditors.