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Walgreens Sues Theranos For Breach Of Contract

Walgreens Alliance Inc. has sued its former laboratory-testing partner, Theranos Inc., on claims that the company violated a contract. The lawsuit was filed in a federal court in Delaware, and seeks $140 million in damages — the same amount it invested in the blood-testing company.

Attorneys for Walgreens say details of the suit will remain under wraps due to the terms of their contract. However, a few reasons for the lawsuit are clear enough. Some blood tests conducted at Theranos labs resulted in fault results, leading to health issues in some cases. Theranos is also facing a lawsuit for fraud from one of its investors, Tech Times reports.

The contract in question was the beginning of a collaboration between Walgreens and Theranos for the latter to set up testing sites at Walgreens stores. Theranos put up blood-testing stations, called wellness centers, in 40 Walgreens outlets in Arizona and Palo Alto, California.

Theranos was once one of Silicon Valley’s brightest stars, raking in billions in investments due to its revolutionary blood testing methods that were billeted as less invasive, more affordable and extremely efficient.

Elizabeth Holmes, CEO and founder of the company, stated that Theranos’ blood tests could run the gamut in tests with just a few drops of blood. Holmes went on to appear on Forbes’ wealthiest self-made women in US history. The title is set to go down the drain should Theranos lose this suit.

After its lab methods were called into question, Theranos announced in May of this year that tens of thousands of its blood tests would be retracted. In June, Walgreens announced the end of its partnership, closing all blood testing sites in their stores. In October, Theranos decided to shut down all blood testing efforts and let go of 340 employees.

Representatives from Walgreens say that Theranos misled them regarding its technology at the time of agreement, and had consistently failed to deliver on its end of the contract. For its part, Theranos has issued a statement on the lawsuit, saying, “Through its mishandling of our partnership and now this lawsuit, Walgreens has caused Theranos and its investors significant harm. We will respond vigorously to Walgreens’ unfounded allegations, and will seek to hold Walgreens responsible for the damage it has caused to Theranos and its investors.”

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