Wal­greens set­tles law­suit

Drug­store chain had sued over the Palo Alto firm’s blood tests.

Los Angeles Times - - BUSINESS - By James F. Peltz james.peltz@la­times.com

The drug­store chain had sued Palo Al­to­based blood test maker Ther­a­nos Inc. af­ter ques­tions about the tests’ ac­cu­racy.

Ther­a­nos Inc., the on­ce­high­fly­ing blood-test­ing firm, said Tues­day it had set­tled a law­suit filed against the com­pany by the drug­store chain Wal­greens and its par­ent, Wal­greens Boots Al­liance Inc.

Terms of the set­tle­ment were not dis­closed, but Ther­a­nos said there was “no find­ing or im­pli­ca­tion of li­a­bil­ity” and Wal­greens’ law­suit will be dis­missed.

Ther­a­nos, led by founder and Chief Ex­ec­u­tive Eliz­a­beth Holmes, had de­vel­oped a novel test­ing tech­nol­ogy that made blood draw­ing eas­ier for pa­tients and be­low com­mer­cial-lab prices.

Many of the Palo Alto com­pany’s tests re­quired only droplets of blood from fin­ger pricks, as op­posed to ob­tain­ing a vial of blood, and used Ther­a­nos’ pro­pri­etary test­ing tech­nol­ogy that en­abled the tests to cover dozens of med­i­cal con­di­tions.

Wal­greens had en­tered a part­ner­ship to make the tests avail­able at 40 Wal­greens stores in Ari­zona, as well as one in Palo Alto.

But start­ing in late 2015, ques­tions mounted about the tests’ ac­cu­racy and whether Ther­a­nos’ tech­nol­ogy was flawed. Health reg­u­la­tors also found Ther­a­nos out of com­pli­ance with cer­tain fed­eral lab re­quire­ments.

Wal­greens then ter­mi­nated its part­ner­ship with Ther­a­nos and in Novem­ber filed its law­suit that al­leged breach of con­tract.

U.S. reg­u­la­tors a year ago banned Holmes from own­ing or run­ning a med­i­cal lab for two years. In Oc­to­ber, Ther­a­nos shut down its labs, laid off 340 em­ploy­ees, or more than 40% of its work­force, and shifted its fo­cus to devel­op­ing MiniLab, a por­ta­ble blood-test­ing de­vice.

In April, Ther­a­nos reached a set­tle­ment with the fed­eral Cen­ters for Medi­care and Med­i­caid Ser­vices, which reg­u­late blood-test­ing labs.

That same month, Ther­a­nos agreed to re­turn $4.65 mil­lion to Ari­zona con­sumers who paid to take one of Ther­a­nos’ tests, along with $200,000 in civil penal­ties paid to the Ari­zona at­tor­ney gen­eral’s of­fice.

Getty Im­ages

ELIZ­A­BETH HOLMES is founder and chief ex­ec­u­tive of Ther­a­nos.

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