Health retail chain Walgreen has sued US-based blood testing technology developer and portfolio company Walgreen for breach of contract, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.
Walgreen is suing for $140m, the sum being equal to the amount it has invested in Theranos. The companies formed a partnership in 2013 that would have involved Theranos blood testing being offered in Walgreens pharmacies across the US.
However, Walgreens claims Theranos misled it with regard to how advanced the technology, which promised accurate clinical testing from a pinprick-sized level of blood, was at the time of the deal.
Walgreens terminated the partnership in June this year after media reports stated Theranos’s technology was nowhere near as accurate as touted. Theranos CEO Elizabeth Holmes was subsequently banned from operating medical laboratories for two years the following month.
Theranos responded to the lawsuit with a statement on its website saying: “We are disappointed that Walgreens filed this lawsuit. 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. 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.”
Fortune reported in October 2015 that Theranos had raised approximately $750m in funding, and that its investors included real estate developer Continental Properties and BlueCross BlueShield Venture Partners, the corporate venturing arm of health insurance firm Blue Cross Blue Shield Association.
Theranos was at that time looking to raise $200m of new funding at a $9bn valuation, but those efforts, understandably, have been put on hold. Its other backers include Esoom Enterprise, Jupiter Partners, Palmieri Trust, Partner Fund Management, Draper Fisher Jurvetson, Ata Ventures, Tako Ventures and various individuals.