The Famous Chain Drugstore, Walgreens alleged that Theranos Inc. breached their contracts. The company’s Walgreens Boots Alliance Inc. is suing Theranos, their lab-testing partner for $140 million in damages. The $140 million is what Walgreens claim they invested into the company.
In a federal court located in Delaware, Walgreens filed their civil suit under seal to prevent Theranos from asserting that the civil suit was a violation to their confidentiality agreement. Theranos released a statement, expressing their disappointment in Walgreens’ civil suit: “Over the years, Walgreens consistently failed to meet its commitments to Theranos. Through its mishandling of our partnership and now this lawsuit, Walgreens has caused Theranos and its investors significant harm.”
Theranos promised to vigorously respond to the unfounded allegations of Walgreens. They stated that the drugstore giant will be held responsible for the damages that have stemmed from this civil suit. According to Walgreens, they were misled about Theranos’ state of technology, when their agreement between the two companies was initially forged.
It was reported that Walgreens also claimed in their suit that they continued to be misled by Theranos, as the lab-testing company continued to be questioned about their technology and operations. Walgreens says that this placed their company and customers at risk. During October 2015, it was reported that Theranos had problems with lab operations and their proprietary blood testing devices.
There was a contractual agreement that allowed Theranos to operate blood-draw sites within 40 different Walgreens locations in the Phoenix area and one location in Northern California. There were future plans to establish Theranos blood-draw sites in more than one-thousand additional locations, throughout the country. The other issue is the large investment that was made by Walgreens. It was setup as a form of debt convertible to equity. This investment is the $140 million that Walgreens is seeking.