|Theranos' Palo Alto, CA, headquarters--Courtesy of Theranos|
Walgreens ($WBA) wants out of its relationship with controversial blood testing company Theranos, and it wants out fast. To do that, it's going to the mattresses.
The drugstore giant is asking its lawyers to look at its contract with Theranos to see whether there is a way to force the company to close the 40 blood-testing clinics that it set up at Walgreens' Arizona drugstores, The Financial Times reports. The move comes on the heels of more pushback from Walgreens, which is none too pleased with the recent turn of events at Theranos.
"They've been unhappy with the relationship and it's really a question of working through the contractual and legal arrangements," a person familiar with the matter told the FT. "They're not interested in the Theranos deal."
In January, Walgreens said that it would not send patient blood samples to Theranos' Newark, CA-based lab after the Centers for Medicare and Medicaid Services (CMS) cited the company for dangerous practices at its facility. Walgreens also said that it would temporarily close its Palo Alto, CA-based Theranos Wellness Center until Theranos clears up the problems.
When it didn't look like the company was moving fast enough, Walgreens issued an ultimatum, giving Theranos 30 days to fix the lab violations laid out by regulators. Otherwise, Walgreens will call off the partnership altogether, it said earlier this month.
Theranos and Walgreens are staying quiet about a potential breakup, with both companies declining to comment to the newspaper. But Walgreens calling it quits on Theranos would be a significant blow to the company, because most of its blood-testing outlets are located at Walgreens drugstores, the FT points out.
A failed deal with Walgreens would be the cherry on top of a disastrous year for Theranos, which has been struggling under the weight of claims of faulty testing. Last year, numerous reports showed kinks in the company's proprietary technology. One article found that "nanotainers" made and used by Theranos to collect blood samples were uncleared medical devices. Another story showed that the company's lab tool only handled a small portion of tests sold to consumers.
Meanwhile, Theranos is trying to pick up the pieces. "We value engagement with our regulators, and are committed to ensuring that all our labs operate at the highest standards," the company said in January. Theranos recently sent a plan to the CMS for getting things back on track at its Newark facility, and the agency's staff "is currently reviewing" Theranos' proposal, CMS spokesman Aaron Albright said earlier this month.
- get the FT story (reg. req.)