Walgreens Sues Ex-Partner Theranos for Agreement Violation

  • Contract suit filed under seal in federal court in Delaware
  • Walgreens ended Theranos relationship after testing questions

Embattled startup Theranos Inc. was sued by Walgreens Boots Alliance Inc. in connection with claims it violated an agreement tied to a scandal over faulty blood-testing claims.

Deerfield, Illinois-based Walgreens, which joined with Theranos to provide testing at some of its retail stores, filed a sealed lawsuit against its former partner on Tuesday in federal court in Delaware. The suit seeks $140 million in damages, the Wall Street Journal reported, citing court records that couldn’t be confirmed in the public docket.

Walgreens terminated its relationship with Theranos and closed 40 Arizona sites in June after questions arose about whether the Palo Alto, California-based company misled consumers and investors about the validity of its testing capabilities.

“Over the years, Walgreens consistently failed to meet its commitments to Theranos,” the startup said in a statement on its website. “Through its mishandling of our partnership and now this lawsuit, Walgreens has caused Theranos and its investors significant harm. We will respond vigorously to Walgreens’ unfounded allegations, and will seek to hold Walgreens responsible for the damage it has caused to Theranos and its investors.”

Michael Polzin, a spokesman for Walgreens, declined to comment on the case.

Walgreens joins testing patients who’ve already sued Theranos, claiming faulty blood-test results led to heart attacks and other issues. It’s also facing fraud claims in state court in Delaware from one of its investors.

Voided Results

Theranos’s reputation suffered a hit after it issued tens of thousands of corrected or voided results to former patients. It’s been investigated by federal prosecutors, securities regulators and federal and state health officials.

U.S. District Judge Sue Robinson in Wilmington, Delaware, agreed to seal the suit for seven days so Theranos officials can decide whether it contains any proprietary information, according to a public court filing.

Walgreens claims Theranos misled it about the state of its technology when the two firms entered into their agreement, the Journal reported, citing unidentified people familiar with the suit.

The case is Walgreens Co. v. Theranos Inc., No. 16-cv-1040, U.S. District Court for the District of Delaware (Wilmington).

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