The shareholders of the scandal-hit US blood-testing start-up Theranos have been officially involved by the company’s chief executive David Taylor that the company would be formally dissolved.
There is no more time remaining with Theranos to get a buyer for its assets or to get more investments, Taylor said.
Criminal charges on wire fraud are being faced by Theranos founder Elizabeth Holmes and former president Ramesh Balwani. Investors, doctors and patients had been duped by the alleged executives of the company to the tune of millions of dollars according to the statement from the prosecutors in the case.
With the aim to “maximise the value of the company” for shareholders, Theranos had engaged the services of investment bank Jeffries, said Taylor, who also serves as general counsel to the firm.
Despite the investment bank reaching out to more than 80 potential buyers for the firm, nothing came out of the efforts, said Taylor in the email according to reports published in the Wall Street Journal.
“Unfortunately, none of those leads has materialized into a transaction. We are now out of time,” he wrote.
In the email, Taylor said that the company had violated the loan terms with investor Fortress Investment Group which essentially means that the investor firm can now sell or take ownership of the intellectual property and assets of Theranos.
Shareholders would probably get nothing following the collapse of the firm.
Theranos had always claimed that its Edison devices was able to just use a few drops of blood got from a small prick on the finger for effectively testing of diseases like cancer and cholesterol instead of full blood samples taken by needle from a vein as is required for traditional test methods. The firm was set up in 2003 by Holmes when she was just 19.
More than $700 million was raised by the company through funding rounds over the years. But the company’s application to get the technology passed by the US Department of Defense in 2012 was rejected because it was found that the results of the devices were unpredictable.
A number of investigative reports were published in the Wall Street Journal in a se3ries in on and after October 2015. Despite the company refuting the new reports, the company found itself facing legal cases from investors, medical authorities and five federal agencies by June 2016.
The clinical laboratory testing certificate of Theranos was revoked by the Centers for Medicare and Medicaid Services (CMS) in April 2017. That resulted in the cancellation of a partnership with the company by the pharmacy chain Walgreens and the company was sued for $140m.
(Adpated from BBC.com)