Drugstore giant Walgreen Co. has sued former laboratory-testing partner Theranos Inc. in a federal court in Delaware, alleging that it breached a contract between the two companies, according to a report in the Wall Street Journal. Walgreens is seeking $140 million in damages, equal to the amount it invested in Theranos.
The civil suit was filed under seal in a Delaware federal court because Walgreens was concerned Theranos might assert that the action violated a confidentiality agreement between the firms, according to the Journal.
In a statement, Theranos said it “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.”
Walgreens told the Journal that it had no comment regarding the lawsuit.
Walgreen’s partnership with Theranos was announced in September 2013. As part of their contract, Theranos ran blood-drawing sites at 40 Walgreens stores in the Phoenix area and at one store in northern California. Walgreens planned to put Theranos centers in thousands of its drugstores across the United States, but in June 2016 it abruptly terminated its partnership with the blood-testing company.
According to the Journal article, Walgreens alleges in its lawsuit that Theranos continued to mislead the company after questions about Theranos’s technology and operations arose during the past year, putting the drugstore chain’s customers at risk.
In a series of articles that began in October 2015, the Wall Street Journal has detailed problems with Theranos’s proprietary blood-testing devices and laboratory operations.
Last month, the company shut down all of its blood-testing facilities and said it would focus on developing products that could be sold to outside labs.
Theranos also is appealing sanctions proposed by federal regulators, including a ban on founder Elizabeth Holmes’ participation in the blood-testing industry for at least two years.
Source: Wall Street Journal; November 8, 2016.