Theranos: Scandal hit blood-testing firm to shut

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Theranos founder Elizabeth Holmes is facing criminal charges of wire fraud

Scandal-hit US blood-testing start-up Theranos is to formally dissolve, the firm's chief executive David Taylor has told shareholders in an email.

Mr Taylor said Theranos had run "out of time" to secure further investment or secure a buyer for its assets.

Theranos founder Elizabeth Holmes and former president Ramesh Balwani are facing criminal charges of wire fraud.

Prosecutors say they engaged in a multi-million dollar scheme to defraud investors, doctors and patients.

Mr Taylor, who also serves as general counsel to the firm, said that Theranos had engaged the services of investment bank Jeffries to try to "maximise the value of the company" for shareholders.

In the email obtained by the Wall Street Journal, he said the investment bank had "reached out" to over 80 potential buyers, but to no avail.

"Unfortunately, none of those leads has materialized into a transaction. We are now out of time," he wrote.

Mr Taylor said the firm had breached the terms of its loan agreement with investor Fortress Investment Group, meaning the firm was now entitled to sell or take ownership of Theranos' intellectual property and assets.

Shareholders are expected to receive nothing after the firm's collapse.

Criminal charges

Theranos, founded in 2003 when Ms Holmes was 19, had claimed its Edison devices could test for conditions such as cancer and cholesterol with only a few drops of blood from a finger-prick, rather than taking full blood samples by needle from a vein.

Ms Holmes raised over $700m in funding for Theranos, but when she tried to pitch the technology to the US Department of Defense in 2012, her pitch was rejected due to the devices' unpredictable results.

The Wall Street Journal began investigating and published a series of exposes starting from October 2015.

Theranos denounced these articles, but by June 2016 it was facing legal challenges from investors, medical authorities and five federal agencies.

In April 2017, the Centers for Medicare and Medicaid Services (CMS) sanctioned Theranos and revoked its clinical laboratory testing certificate, which caused the pharmacy chain Walgreens to terminate its partnership with the start-up and sue Theranos for $140m.

In March, Ms Holmes settled charges with the Securities and Exchange Commission, a top US financial regulator.

The regulator alleged that Theranos, Ms Holmes and Mr Balwani made a series of false and misleading statements in investor presentations, product demonstrations and interviews.

As part of the settlement, Ms Holmes had to return millions of shares to the privately held company and pay a $500,000 fine. She was also banned from serving as an officer or director of a public company for 10 years.