Theranos was unable to find a buyer and aims to pay unsecured creditors its remaining cash of $5m, Wall Street Journal reports
The once-heralded blood-testing startup Theranos is shutting down, according to a media report.
Theranos was unable to sell itself and is now looking to pay unsecured creditors its remaining cash of about $5m in the coming months, according to an email the Wall Street Journal obtained that the CEO, David Taylor, sent to shareholders.
The announcement comes nearly three months after Theranoss founder and former CEO, Elizabeth Holmes, and former chief operating officer Ramesh Balwani were charged with criminal fraud.
Prosecutors allege Holmes and Balwani deliberately misled investors, policymakers and the public about the accuracy of Theranoss blood-testing technologies going back to at least 2013.
If convicted, they could face prison sentences that would keep them behind bars for the rest of their lives, and total fines of $2.75m each.
Holmes, once considered a wunderkind in Silicon Valley, had pitched Theranoss technology as a cheaper way to run dozens of blood tests.
Holmes said Theranos had discovered a new way of doing blood testing, one able to do dozens of tests with just a prick of a finger and few droplets of blood.
Theranos shared very little about its blood-testing machine, nicknamed Edison, with the public or medical community. Holmes said she was inspired to start the company in response to her fear of needles.
Investors poured hundreds of millions of dollars in the company.
At one time, Theranos was worth more than $10bn and Holmes was the youngest self-made female billionaire. But an investigation by the Wall Street Journal two years ago found that Theranoss technology was inaccurate at best, and that the company, based in Palo Alto, California, was using routine blood-testing equipment for the vast majority of its tests.
The story raised concerns about the accuracy of Theranoss blood-testing technology, which put patients at risk of having conditions either misdiagnosed or ignored.
Walgreens ended its blood-testing partnership with the company, and the Department of Health and Human Services in effect banned Theranos in 2016 from doing any blood-testing work.
The Securities and Exchange Commission brought civil fraud charges against Holmes and Balwani in March. Holmes settled with the SEC, agreeing to pay $500,000 in fines and penalties. Balwani is fighting the charges. Theranos laid off most of its staff this year.