Walgreen Sues Theranos and Seeks $140 Million in Damages
Walgreens has filed a $140 million lawsuit against blood-testing company Theranos, a former business partner.
In the complaint filed on Tuesday in the District Court of Delaware, Walgreens alleges that Theranos has breached a contract, but details are scarce as the retailer has gotten the complaint sealed due to non-disclosure agreements, according to media reports. A Walgreens' spokesman confirmed to Fortune that the company has filed the lawsuit but declined to share more details.
Theranos and Walgreens first teamed up in 2010, and opened Theranos "Wellness Centers" in 40 locations where they offered blood-tests to patients. Theranos, founded in 2003 by Elizabeth Holmes, set out to develop technology that would allow for blood tests to be performed with just a few drops of blood from a finger prick.
In a statement, Theranos said it was "disappointed" Walgreens filed the lawsuit. Theranos claimed Walgreens has "consistently failed to meet its commitments to Theranos" and mishandled the companies' partnership.
In June, Walgreens announced that it was terminating its relationship with Theranos and closing operations at 40 blood-draw sites that the Silicon Valley company ran in Arizona at Walgreens' stores.
Walgreens' lawsuit reportedly claims that it was misled by Theranos over the state of its blood-testing technology when the companies first struck a deal and even as its technology was beginning to be challenged. Walgreens invested $140 million in Theranos in the form of debt convertible to equity, which is the amount it seeks to recover in the lawsuit.
"We are disappointed that Walgreens filed this lawsuit. Over the years, Walgreens consistently failed to meet its commitments to Theranos," the company said in a statement published on its website.
Last month, Theranos announced it was closing down its its labs and "Wellness Centers," and shifting its efforts onto its "minilab," a device for blood-testing it intends to sell to clinics. It laid off 340 employees, or nearly half of the 790 employees it had as of August.
The case is Walgreen Co v. Theranos Inc, U.S. District Court, District of Delaware, No. 16-01040.