Scandal-hit blood-testing company Theranos to formally dissolve with stakeholders receiving nothing
Embattled blood-testing company Theranos will formally dissolve and hand over its remaining cash to creditors, shareholders have been told.
Chief executive David Taylor said the company – once valued at $9bn (£6.9bn) – had run “out of time” in its hunt for investment or a buyer for its assets.
In an email obtained by the Wall Street Journal, Taylor said the investment bank Jeffries had unsuccessfully reached out to more than 80 potential buyers.
He said: “Unfortunately, none of those leads has materialized into a transaction.
“We are now out of time.”
Stakeholders are expected to receive nothing following the firm's collapse.
The firm's founder and former chief executive Elizabeth Holmes and her second-in-command Ramesh Balwani are facing criminal charges of wire fraud.
US prosecutors said the pair engaged in a multi-million dollar scheme to defraud investors, doctors and patients – encouraging them to use the test results despite knowing they were not consistently accurate.
Theranos, founded in 2003 by Holmes who was 19 at the time, had claimed its Edison machine could test for a range of conditions, including cancer, using a few drops of blood from a finger rather than taking a large amount by needle from a vein.
Holmes raised more than $700m in funding before her pitch to the US Department of Defense in 2012 was rejected due to the devices' unpredictable results.
Following a Wall Street Journal investigation in 2015, investors, medical authorities and five federal agencies launched legal challenges against the company.
The Centers for Medicare and Medicaid Services (CMS) revoked its clinical laboratory certificate in April 2017 – the company settled with CMS agreeing to stay out of the blood-testing industry for two years.
As a result pharmacy chain Walgreens terminated its partnership with Theranos and sued the company for $140m, settling out of a court for a smalle amount.
Holmes and Balwani were charged in June.