Published: Thu, September 06, 2018
Health Care | By Belinda Paul

Theranos Set to Dissolve As Company Defaults On Fortress Loan

Theranos Set to Dissolve As Company Defaults On Fortress Loan

Theranos, the one-time Silicon Valley biotech star valued at more than $9 billion, has ultimately run out of money, employees and time.

The once high flying blood-testing start-up Theranos, accused with cheating investors, will dissolve, the Wall Street Journal reported Wednesday.

The company plans to formally dissolve itself and pay unsecured creditors its remaining cash in coming months, the newspaper reported, citing an email sent to shareholders. To read on the go, sign up today to get biotech news and updates delivered right to your inbox!

A notoriously secretive company, Theranos shared very little about its blood-testing machine, nicknamed Edison, with the public or medical community.

However, in October 2015, the Wall Street Journal published a front-page story that claimed the technology was flawed and that the company's former chief scientist had taken his own life two years earlier after telling his wife the technology did not work.

Ms Holmes herself became a business pin-up, wearing a black turtleneck jumper that drew comparisons with Steve Jobs, while profiles regularly pointed out that, like other successful tech entrepreneurs such as Bill Gates and Mark Zuckerberg, she was a college drop-out.

Holmes, who reigned briefly as the world's youngest female self-made billionaire over her promise to revolutionize blood testing, was criminally charged in June with defrauding investors along with the Palo Alto, California-based company's former president, Ramesh "Sunny" Balwani.

The announcement of the closure comes almost three months after Theranos founder Holmes and Chief Operating Officer Ramesh Balwani were charged with criminal fraud. They have negotiated a deal with Fortress Investment Group, their lender, where Fortress retains what intellectual property Theranos had left.

The once-heralded blood-testing startup Theranos is shutting down, according to a media report.

"We are now out of time", Taylor said.

The Justice Department alleges that Holmes and Balwani transmitted the results despite knowing that the tests were unreliable.

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