Theranos is reportedly closing after failing to sell itself


In a new Wall Street Journal piece, John Carreyrou-the journalist who exposed Theranos' misleading claims about the efficacy of its tests-reported that the company will next week begin to formally dissolve.

Theranos was founded and helmed by then-19-year-old Stanford dropout Elizabeth Holmes in 2003 promising the development of blood tests requiring only tiny amounts of blood (1/100 - 1/1000 the norm).

The announcement comes almost three months after Theranos founder and former chief exective Elizabeth Holmes and former chief operating officer Ramesh Balwani were charged with criminal fraud.

Soon after she devoted herself full time to her company, Holmes attracted a number of key investors (including Larry Ellison and Draper Fisher Jurvetson) and high-profile board members (including former U.S. Secretaries of State Henry Kissinger and George Schultz, and former U.S. Senators William Frist and Sam Nunn). She became a media darling, attracting millions of dollars in investment based on claims of innovative technology.

But days later, a federal grand jury indicted Holmes and Balwani on criminal fraud charges, which would seem to put a stop on those ambitions.

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That is, it did offer these services until an in-depth Wall Street Journal article in October 2015 questioned Theranos's practices, casting further doubt on the company's ability to deliver on its promises. WSJ claimed that Theranos had been using traditional blood testing machines to report test results to different investors, and that its "Edison" device provided erroneous results. If convicted, they each face a maximum sentence of 20 years in prison and a fine of $250,000, plus restitution to those found to have been defrauded, on each count.

She carefully crafted her image as well, often wearing black turtleneck sweaters that led some in Silicon Valley to describe her as "the next Steve Jobs", a reference to the Apple founder.

It took the better part of a decade for the fraud perpetrated by Theranos to be uncovered, in large part because Holmes was able to cultivate relationships with some of the world's most powerful, influential and wealthy people. Both no longer work for the company. Theranos also had a partnership with Walgreens, which had blood-testing centers in its stores. Balwani is fighting the charges.

Lawyers for the company did not respond to requests for comment.

Theranos Chief Executive Officer Elizabeth Holmes speaks on stage at the Glamour Women of the Year Awards where she receives an award, in the Manhattan borough of New York November 9, 2015.