Theranos has been having an awful time of it lately, mostly of its own making, with several lawsuits in place, including ones from Walgreens and hedge-fund Partner Fund Management (PFM). The company that promised investors a revolutionary blood-testing technique and custom analysis machinery has just settled the latter suit for an undisclosed sum. The original lawsuit sought recovery of a $96.1 million investment plus damages. A particularly large settlement could have a significant impact on the beleaguered company, of course, which told investors that it only had $200 million in cash as of the end of last year. The Wall Street Journal reports that Theranos has already spent $5 million on other recent settlements.
The lawsuit brought by PFM alleged that Theranos had defrauded the company into making its large investment. Documents filed as part of the suit alleged that the medical company directly misled investors and even its own directors about its testing practices while secretly using off-the-shelf lab equipment which it passed off as its own revolutionary machinery. The Walgreens suit, filed for a reported $140 million, could be yet another costly settlement in the future, though the details are sealed behind a non-disclosure agreement between Theranos and its former retail partner.
Partner Fund Management has a separate suit filed to block a Theranos deal with late-stage investors that would reward them with stock if they promised not to sue the company. Now that the first PFM suit is settled, the deal can go through. Theranos says in a statement that 99 percent of its shareholders are committed to the agreement ahead of a planned May 15th closing date.