
Walgreen Sues Theranos, Seeks $140 Million in Damages - smaili
http://www.wsj.com/articles/walgreens-seeks-to-recover-140-million-investment-from-theranos-1478642410
======
ryandrake
Theranos has got to be my favorite tech story of the year, possibly of the
decade. There's nothing quite as satisfying as the schadenfreude of watching
an "elite" who got by for years on charm, connections, hot air and wealth
finally get called on their BS and go down in flames so publicly!

There are plenty of hard working, talented tech people out there with grit and
integrity and even actual products, held back by their lack of deep-pocketed
Ivy-league connections. Yet borderline fraud gets funded and gushed over by
the press. If there's justice in the world, the Theranos drama is a sliver of
it.

~~~
will_brown
>There are plenty of hard working, talented tech people out there with grit
and integrity and even actual products, held back by their lack of deep-
pocketed Ivy-league connections.

As someone who launched a side project in the _pharmacy_ space and closed a 6
month pilot with the World's largest company and still can't get a YC
interview or VC response...I can tell you there is no justice in what happened
to Theranos because it doesn't make it any easier for those people with actual
products, it's just business as usual.

~~~
EpicEng
Releasing a diagnostic or prognostic test shouldn't be easy. I've worked in
biotech my entire career and it's just too easy to screw up. There are already
far too many shortcuts taken in CLIA labs and the LDT space.

~~~
apathy
> too many shortcuts taken in CLIA labs and the LDT space.

jesus fuck, this is NOT what I need to hear as we push our salvage therapy
companion biomarker into a 160 patient trial.

then again I work in pediatrics these days and nobody ever made any money in
peds. So I guess there's that. People expect their 99-year-old grandpa to die
of prostate cancer (or apnea, or constipation, or...). It's rather a more
unpleasant shock when your 3-year-old does the dying.

Won't make anyone rich but maybe it'll relieve a little suffering in the
world. I guess I'd best be OK with that.

~~~
EpicEng
Well... hopefully it doesn't apply to your company!

------
dxhdr
This is following the suit filed by $96MM investor Partner Fund Management
last month.

[http://www.businessinsider.com/partner-fund-management-
sues-...](http://www.businessinsider.com/partner-fund-management-sues-
theranos-2016-10)

And Theranos' announcement of shutting down their labs and firing 40% of their
staff.

[https://news.theranos.com/2016/10/05/an-open-letter-
elizabet...](https://news.theranos.com/2016/10/05/an-open-letter-elizabeth-
holmes/)

~~~
JumpCrisscross
Yet David Boies, a lawyer and Theranos Director, continues to defend the
company and its leadership [1].

[1]
[http://www.bloomberg.com/news/articles/2016-04-19/theranos-d...](http://www.bloomberg.com/news/articles/2016-04-19/theranos-
director-defends-ceo-holmes-says-investors-have-faith)

~~~
rayiner
His firm represents Theranos. Although, see:
[http://mobile.nytimes.com/2016/02/03/business/dealbook/david...](http://mobile.nytimes.com/2016/02/03/business/dealbook/david-
boiess-dual-roles-at-theranos-set-up-conflict.amp.html).

EDIT: what the hell Google, stop hijacking links.

~~~
JumpCrisscross
He is still a Director. That entails a fiduciary duty to Theranos' investors.

"But management pays me to kiss their asses" isn't a valid excuse.

~~~
rayiner
Right. You expect him to paint a rosy picture but he's walking a very fine
line.

------
M_Grey
As always, I'm still waiting on criminal charges for this classic case of
fraud.

~~~
Crito
I fear you'll be kept waiting.

~~~
M_Grey
Yeah, I suspect that you're absolutely correct.

------
tedmiston
Well _that 's_ gonna make it tough to raise another round.

------
bedros
a similar statup ubeam by a female founder, with secrecy, and non proven
prototype yet.

however, a16z invested in them to my surprise.

[https://techcrunch.com/2016/05/11/charged/](https://techcrunch.com/2016/05/11/charged/)

~~~
nikanj
UBeam et al don't make a product, their product is the company. A16z is
betting there's high demand for pie-in-the-sky, female-ceo, headline-making
companies. So far, they've been right.

~~~
thebiglebrewski
I really don't like your tone about female CEOs. UBeam and Theranos are
terrible examples. Far more companies have been run into the ground by male
leadership.

PS - I'm a dude

~~~
dleslie
There's a present fad to seek out and support female contenders, and this
makes those with good intentions meaty targets for those inclined to exploit
good intentions.

It's not that women are less capable, it's that there's an angle where well
meaning individuals may be exploited by predators.

In a way, it's flattery to claim that there may exist women who are aware of
this opportunity and are exploiting it.

------
_RPM
I'm actually pleased to hear that a tech company is going to perish. Too many
of them think they are invincible (airbnb)

~~~
AndrewWarner
What makes you say that Airbnb feels invincible?

They seem like humble guys who are constantly at battle to save their company.

~~~
TeMPOraL
Honest question: at what point does a company stop being called "[two] guys
(...) at a battle to save their company", and starts being called a
multinational enterprise with ~2000 employees?

~~~
AndrewWarner
It's fair to say they're a multinational company and that they're big.

I was talking about the founders being humble.

My point was that the company doesn't seem to think they're invincible. They
seem aware of the dangers.

~~~
j-walker
>I was talking about the founders being humble.

[http://www.theverge.com/2015/10/22/9591596/airbnb-san-
franci...](http://www.theverge.com/2015/10/22/9591596/airbnb-san-francisco-ad-
campaign-proposition-f)

~~~
_RPM
This perfectly illustrates the founders and CTO. Their arrogance is striking.

------
walrus01
long form article on theranos:
[http://www.vanityfair.com/news/2016/09/elizabeth-holmes-
ther...](http://www.vanityfair.com/news/2016/09/elizabeth-holmes-theranos-
exclusive)

~~~
at-fates-hands
Jesus, red flags EVERYWHERE

\- _was also bubbling throughout the company’s mustard-and-green Palo Alto
headquarters, which was nearing the end of a $6.7 million renovation._

Not sure how many startups you guys have been apart of, but none of the ones I
worked for were making 7 million dollar renovations to their offices.

\- _Holmes largely forbade her employees from communicating with one another
about what they were working on—a culture that resulted in a rare form of
executive omniscience._

This also keeps your employees in the dark when the ship starts sinking.

\- _Moreover, he was also struck by Holmes’s limited ability to explain how it
all worked._

You're running a biotech company and you don't even know how the technology
works? Another HUGE red flag.

\- _And, as a then dark-haired 19-year-old first-year at Stanford University’s
School of Chemical Engineering_

So somewhere she was able to charm people that she was some kind of biotech
expert after only having ONE YEAR in a chemical engineering program? Unreal.

There's a bunch more, but I'm quite shocked frankly she got as far as she did.
There should have been so many red flags on the investors part to stay away
from this company and they all got suckered into it.

~~~
joering2
> There's a bunch more, but I'm quite shocked frankly she got as far as she
> did.

That's only because you don't know who she knew. With such deep connected
friends when you bring powerful people to the board, money will follow.

~~~
tenpies
It's also worth noting the context: the media/large segments of the population
were (still are) clamouring for women in STEM. Holmes emerged as a woman in
STEM, who was a college drop out, dressed like Steve Jobs, apparently had the
work ethic of Elon Musk, came from a well connected family, all while also
being some sort of science prodigy who found a way to defy the physical rules
of biology.

They ate it up and anyone who asked any questions was immediately labeled a
misandrist, so I think it's quite easy to understand how she got this far.
Virtually everything was stacked her way and she was immune to criticism.

~~~
foobarian
Pardon me but why misandrist instead of misogynist?

~~~
tenpies
Apparently I get those two words confused. Should be misogynist.

------
thinkcomp
Actual court docket:

[http://www.plainsite.org/dockets/32vhjo5i9/delaware-
district...](http://www.plainsite.org/dockets/32vhjo5i9/delaware-district-
court/walgreen-co-v-theranos-inc/)

------
throw2016
How well connected is Holmes that there are still no criminal charges or even
a criminal investigation?

This is stark constrast to little people put in prison or harassed for any
small transgression.

Seriously this is in healthcare with tons of rules and regulations covering
every minutae as any well developed country would have. How can it be remotely
possible Theranos has not run foul of any of these rules by deception, fraud
and endangering the public?

What does this tell us about the american legal system and rule of law if the
well connected are systematically spared or loopholes intentionally left like
in the banking crisis and now.

This is not about retribution or seeing bankers or Holmes suffer, its about a
civilised and not feudal justice system. Currently it does seem there is a
completely different set of rules in operation for the rich and privileged.

------
jeremynixon
None of the top VC firms were invested in Theranos. Was this intentional on
Theranos’ founders part? Were they evaluated by top VCs and found lacking?

~~~
acchow
Do the top VCs really play in biotech?

~~~
akiselev
Biotech/medical venture capital is a completely different and only slightly
smaller industry than software VC but yes the top late stage firms, like
Sequoia Capital, generally invest in both. It's hard to find companies to
invest tens or hundreds of millions of dollars into (each) and biotech
companies can easily require that much in an industry with proven exit
strategies (and greater annualized returns than software according to some
studies). Since pharma largely outsources R&D to the startup world, there are
many exit paths including technology or talent acquisition (people,
techniques, and equipment), patent acquisition (before and after approval),
and even pre-revenue IPOs which are surprisingly common in the life sciences
to this day.

------
perseusprime11
Can somebody please objectively fill me in on what caused the failure of
Theranos? Is it a scam from the get go? I had high hopes after reading the
profile of their CEO.

~~~
iaw
The existing industry has rigorous standards that have been established over
decades of tragedies.

Theranos announced that it had a technological breakthrough that took less
time/money/blood for the same results.

Walgreens, seeing a potential competitive advantage, partnered with Theranos
to start administering the tests with a promise from Theranos that everything
was good & on the up-and-up.

When the FDA started looking at the quality of the tests Theranos was
administering they felt that they were not good & not on the up-and-up. The
tests failed the criteria that made them valid.

In the mean time Walgreens customers potentially received treatments for
illnesses they didn't have (or worse, missed illnesses they did) because
Theranos misrepresented, implicitly or explicitly, the quality of their tests.

The part that makes it hard to disentangle the internet hates from the actual
problems with the company is it's founder: Elizabeth Holmes. Questions have
been raised around whether Elizabeth Holmes did anything meaningful or if she
simply curried some personal connections into a company that then became a
shell game of smoke and mirrors. She spent a lot of time currying press
attention, bilking herself as the next Steve Jobs while her company was being
ran by ???

~~~
perseusprime11
Thanks. Just re-read the original WSJ article that started it all. Here are
some things that caught my attention:

\- No Research to prove this methodology worked \- Influential parents with
connections in D.C helped create a powerful board with members such as Henry
Kissinger \- Theranos knew their results were flawed but did not report \-
According to FDA, labs were deficient and their quality control methods
themselves were deficient \- They claimed to run 70 tests from a tiny sample
of blood from your finger tip when they had permission to do only one test
from FDA.

This stuff is crazy. Kudos to the folks who did the investigative journalism
to uncover these things. It looks like people's lives were put at risk with
this company.

------
staticautomatic
Anyone see where this was filed? I can't find it on PACER or the Chancery
court website. The article says "Delaware federal court"...

~~~
thinkcomp
Delaware District Court

[http://www.plainsite.org/dockets/32vhjo5i9/delaware-
district...](http://www.plainsite.org/dockets/32vhjo5i9/delaware-district-
court/walgreen-co-v-theranos-inc/)

~~~
staticautomatic
Now I'm really confused. That case number is not in PACER as of right now.

~~~
thinkcomp
You may be looking on the wrong site? In any event, this is why I created
PlainSite: because PACER is too expensive and too difficult to use!

~~~
staticautomatic
I've had a PACER account for years and am definitely not looking in the wrong
place. Since you've familiar with PACER, feel free to double check yourself.

------
zair
You guys remember Channing Robertson, the professor who first bought into this
BS? I would looooove to understand what he was/is thinking.

------
tn13
The Eagle* 1 might be in trouble now!

*Theranos CEO hired a top notch security firm to protect herself (for no good reason) and her code name was Eagle 1.

~~~
nols
She's a multi-billionaire heavily featured in the press. I think it's
reasonable to want security.

~~~
tn13
Taken from WSJ :

Ms. Holmes maintains a heavy security detail. Men with earpieces escort her
wherever she goes outside the Palo Alto headquarters. Their code name for her
is “Eagle 1,” current and former employees say. Mr. Balwani, until he retired,
was “Eagle 2,” they say.

Despite the meetings with attorneys, Ms. Holmes still finds time to work on
her external messaging. Several weeks ago, she traveled to New York and met
with the television host Charlie Rose, the person who recently interacted with
her said. Mr. Rose didn’t respond to an email seeking comment.

She has also been talking with Jason Blum, who was executive producer of HBO’s
“The Jinx: The Life and Deaths of Robert Durst,” about a potential documentary
that would chronicle her life and career, people familiar with the matter
said. Mr. Blum’s production company didn’t respond to an email seeking
comment.

------
noir-york
Great day to bury the bad new Theranos!

------
Crito
I'm stunned it took this long.

------
daodedickinson
Anyone else see the recent WikiLeak about Theranos?

~~~
ben_jones
Do you have a link for those who haven't?

Edit:

“I don’t think it was wise to have Elizabeth Holmes host a Clinton event,”
Clinton donor Herbert Sandler wrote in an email to campaign chairman John
Podesta a week before the fundraiser. “There are significant questions
concerning Holmes and her company. She may come out alright, but it is
certainly possible that everyone associated with her venture will be
embarrassed.”[1]

[1]:[http://us11.campaign-
archive2.com/?u=f8609630ae206654824f897...](http://us11.campaign-
archive2.com/?u=f8609630ae206654824f897b6&id=bc1ee3dff7)

~~~
Crito
TBQH the Russians probably faked that email. Sure makes you wonder how the
Russians were wise to their scheme when the Americans were falling for it!

 _(I honestly can 't tell if I'm being sarcastic or not...)_

~~~
daodedickinson
Did they also fake the Record article reporting on the public fundraiser that
Hillary held with the Theranos CEO? The email was just commenting on the
actually controversial and interesting event, which was publicly available
information.

------
tn13
This has also hurt the cause of feminists.
[http://www.returnofkings.com/76246/is-theranos-a-girl-
powere...](http://www.returnofkings.com/76246/is-theranos-a-girl-powered-scam)

~~~
draw_down
Nah.

------
dannylandau
Theranos is probably many things, but bringing criminal charges might be going
to far. From 20,000 feet, it looks like an ambitious girl out of Stanford that
got way ahead of herself and her abilities. This Company should be allowed to
quietly recede into the sunset.

~~~
Crito
_Too far?_ Everyone in a position to know the true state of Theranos should be
publicly hanged for attempting to defraud the American Government, and by
extension, the American people themselves.

The fact that the fraud was related to healthcare should earn them all _short_
ropes.

~~~
Mz
You and my late father would have gotten along. His theory was that the death
penalty should involve hanging people and re-using the same rope to keep it
cheap. When it finally breaks, commute that individual's sentence and get a
new rope to continue on with the next person.

~~~
iaw
There's an episode of "Murdoch's Mysteries" about the process of hanging a
man. The rope was consistently reused, it was nearly as thick as your wrist.
Too short and the man would strangle, too long and he would be decapitated.

~~~
Mz
I don't think my father actually knew that. I think he was just trying to be
nasty/snarky.

Things learned talking to people in online forums...

~~~
iaw
I find it kind of interesting that there was a whole process/methodology
behind it that modern society has forgotten.

~~~
Mz
We have forgotten tons -- like how the Romans made ice in the desert, Greek
fire and how to bend mother of pearl to clad statues -- yet imagine ourselves
superior in every way.

~~~
gohrt
The Romans made ice in the desert by leaving a bucket of water out overnight
where temperatures drop below freezing, which deserts do.

