Walgreens Settles Lawsuit With Theranos for Less Than $30M
Theranos Inc. has tentatively agreed to pay Walgreens Boots Alliance Inc. less than $30 million to settle a lawsuit that alleged the health tech startup breached the companies’ contract. Walgreens once hosted about 40 Theranos blood-testing centers inside its stores, allowing Theranos to get in front of many of Walgreens customers. In the suit, Walgreens had sought to recover the full $140 million it invested in the Theranos partnership, including a $40 million convertible-debt note and a separate payment as part of an effort to expand the partnership.
Total Retail’s Take: Walgreens relationship with Theranos dates back to 2010. When Theranos became the subject of criticism in 2015 due its lab practices, Walgreens ended the partnership agreement. The drug store chain was suing Theranos to get all of its money back, but will have to settle for getting less than a quarter of the $140 million it invested. While Walgreens was undoubtedly hoping that it would receive the full $140 million, at this point it has to be happy to put this situation behind it. Meanwhile, Theranos still faces a civil investigation by the Securities and Exchange Commission and a criminal investigation by the Justice Department, according to court filings. Regulators found problems in early 2016 with Theranos’ lab practices, which regulators said put patients in danger.