[82lsju]

Holmes may have been able to sweet talk a bunch of VC's to part with hundreds of millions of dollars based on hype and talk of disruption

Theranos raised ~$786 million with ~$547 million coming from private equity, $50 million from Walgreens and the rest from a variety of sources

https://www.crunchbase.com/organization/...os#/entity

Rumor mill is that a lot of the funding came from Larry Ellison and his investment arm Tako Ventures

[82lsju]

Holmes may have been able to sweet talk a bunch of VC's to part with hundreds of millions of dollars based on hype and talk of disruption

Theranos raised ~$786 million with ~$547 million coming from private equity, $50 million from Walgreens and the rest from a variety of sources

https://www.crunchbase.com/organization/...os#/entity

Rumor mill is that a lot of the funding came from Larry Ellison and his investment arm Tako Ventures

[fullmetal]

2) the FDA.  Holmes may have been able to sweet talk a bunch of VC's to part with hundreds of millions of dollars based on hype and talk of disruption, but the FDA is arch-conservative and very skeptical of hype; the greater the "disruption" the more proof they will want that it works as well.  Her strategy was to shoot first and ask questions later on the thought that it is better to ask forgiveness than beg permission.  That didn't go over well with the FDA.

I think Theranos actually got initial FDA approval despite the fact that it's never disclosed any of its trade secrets--to the FDA or otherwise.  IIRC, prior incarnations of Theranos's board of directors were filled with political heavyweights, probably aimed at getting regulatory approval rather than providing oversight and technical expertise.

http://fortune.com/2014/06/12/theranos-board-directors/

[fullmetal]

2) the FDA.  Holmes may have been able to sweet talk a bunch of VC's to part with hundreds of millions of dollars based on hype and talk of disruption, but the FDA is arch-conservative and very skeptical of hype; the greater the "disruption" the more proof they will want that it works as well.  Her strategy was to shoot first and ask questions later on the thought that it is better to ask forgiveness than beg permission.  That didn't go over well with the FDA.

I think Theranos actually got initial FDA approval despite the fact that it's never disclosed any of its trade secrets--to the FDA or otherwise.  IIRC, prior incarnations of Theranos's board of directors were filled with political heavyweights, probably aimed at getting regulatory approval rather than providing oversight and technical expertise.

http://fortune.com/2014/06/12/theranos-board-directors/

[washingtonismoney]

I think Theranos actually got initial FDA approval despite the fact that it's never disclosed any of its trade secrets--to the FDA or otherwise.  IIRC, prior incarnations of Theranos's board of directors were filled with political heavyweights, probably aimed at getting regulatory approval rather than providing oversight and technical expertise.

http://fortune.com/2014/06/12/theranos-board-directors/

That's not quite accurate. Theranos's herpes test got FDA approval, but not its other test. For that, FDA got data. However, FDA regulations are not strictly speaking relevant here. As a lab provider, it fell under CMS regulations. Holmes portrayed her decision to go to FDA as a way of demonstrating she was going above and beyond the call of duty.

Rumor mill is that a lot of the funding came from Larry Ellison and his investment arm Tako Ventures

No rumor; you can see that in their SEC filing, I'm pretty sure. Or it's been reported somewhere. Other investors included BlueCross BlueShield's VC arm.

[washingtonismoney]

I think Theranos actually got initial FDA approval despite the fact that it's never disclosed any of its trade secrets--to the FDA or otherwise.  IIRC, prior incarnations of Theranos's board of directors were filled with political heavyweights, probably aimed at getting regulatory approval rather than providing oversight and technical expertise.

http://fortune.com/2014/06/12/theranos-board-directors/

That's not quite accurate. Theranos's herpes test got FDA approval, but not its other test. For that, FDA got data. However, FDA regulations are not strictly speaking relevant here. As a lab provider, it fell under CMS regulations. Holmes portrayed her decision to go to FDA as a way of demonstrating she was going above and beyond the call of duty.

Rumor mill is that a lot of the funding came from Larry Ellison and his investment arm Tako Ventures

No rumor; you can see that in their SEC filing, I'm pretty sure. Or it's been reported somewhere. Other investors included BlueCross BlueShield's VC arm.

[BostonCard]

[quote author=Boston Card link=topic=15866.msg174980#msg174980 date=1475869249]
2) the FDA.  Holmes may have been able to sweet talk a bunch of VC's to part with hundreds of millions of dollars based on hype and talk of disruption, but the FDA is arch-conservative and very skeptical of hype; the greater the "disruption" the more proof they will want that it works as well.  Her strategy was to shoot first and ask questions later on the thought that it is better to ask forgiveness than beg permission.  That didn't go over well with the FDA.

Gotta disagree with you here -- CMS was much more the problem than FDA, at least with Theranos's business model, which relied on building their own labs. For that, getting and maintaining their license was essential. Once the violations were found it was game over for the business model.

(The FDA did make them withdraw use of their "nanotainer" but they could still do testing with larger containers and/or needles...)
[/quote]

Well, if they could do testing with larger containers or needles, then they are basically Quest diagnostics.  CMS was the last nail in the coffin, but FDA came first.  To give you the order of things:

Oct. 16, 2015: Wall Street Journal comes out with its expose
Oct. 28, 2015: FDA orders Theranos to stop using its technology for all but one test.  Given how soon after it came from the WSJ, the FDA had to have been in the process of investigating Theranos long before
Jan. 27, 2016: CMS cited Theranos and said that its testing posed "immediate jeopardy to patients"; the appeal process goes on through April (given CMS' speed, this process likely also predated the WSJ
July 7, 2016: CLIA certificate revoked and Holmes prohibited from running a testing company

The FDA was the first formal regulatory action, and thus had the biggest impact.  But it may be fair to say that FDA was shorthand for "federal regulators".

BC

[BostonCard]

[quote author=Boston Card link=topic=15866.msg174980#msg174980 date=1475869249]
2) the FDA.  Holmes may have been able to sweet talk a bunch of VC's to part with hundreds of millions of dollars based on hype and talk of disruption, but the FDA is arch-conservative and very skeptical of hype; the greater the "disruption" the more proof they will want that it works as well.  Her strategy was to shoot first and ask questions later on the thought that it is better to ask forgiveness than beg permission.  That didn't go over well with the FDA.

Gotta disagree with you here -- CMS was much more the problem than FDA, at least with Theranos's business model, which relied on building their own labs. For that, getting and maintaining their license was essential. Once the violations were found it was game over for the business model.

(The FDA did make them withdraw use of their "nanotainer" but they could still do testing with larger containers and/or needles...)
[/quote]

Well, if they could do testing with larger containers or needles, then they are basically Quest diagnostics.  CMS was the last nail in the coffin, but FDA came first.  To give you the order of things:

Oct. 16, 2015: Wall Street Journal comes out with its expose
Oct. 28, 2015: FDA orders Theranos to stop using its technology for all but one test.  Given how soon after it came from the WSJ, the FDA had to have been in the process of investigating Theranos long before
Jan. 27, 2016: CMS cited Theranos and said that its testing posed "immediate jeopardy to patients"; the appeal process goes on through April (given CMS' speed, this process likely also predated the WSJ
July 7, 2016: CLIA certificate revoked and Holmes prohibited from running a testing company

The FDA was the first formal regulatory action, and thus had the biggest impact.  But it may be fair to say that FDA was shorthand for "federal regulators".

BC

[82lsju]

No rumor; you can see that in their SEC filing, I'm pretty sure. Or it's been reported somewhere. Other investors included BlueCross BlueShield's VC arm.

yes, the list seems to include

Draper Fisher Jurvetson (only in a seed round)
ATA Ventures
Tako Ventures
Don Lucas
Larry Ellison
BlueCross BlueShield Venture Partners
Continental Properties Co
Esoom Enterprise
Jupiter Partners
Palmieri Trust
Partner Fund Management
Dixon Doll
Ray Bingham
B.J. Cassin

http://fortune.com/2015/10/28/theranos-i...w-funding/

[82lsju]

No rumor; you can see that in their SEC filing, I'm pretty sure. Or it's been reported somewhere. Other investors included BlueCross BlueShield's VC arm.

yes, the list seems to include

Draper Fisher Jurvetson (only in a seed round)
ATA Ventures
Tako Ventures
Don Lucas
Larry Ellison
BlueCross BlueShield Venture Partners
Continental Properties Co
Esoom Enterprise
Jupiter Partners
Palmieri Trust
Partner Fund Management
Dixon Doll
Ray Bingham
B.J. Cassin

http://fortune.com/2015/10/28/theranos-i...w-funding/

[washingtonismoney]

Well, if they could do testing with larger containers or needles, then they are basically Quest diagnostics.  CMS was the last nail in the coffin, but FDA came first.  To give you the order of things:

Oct. 16, 2015: Wall Street Journal comes out with its expose
Oct. 28, 2015: FDA orders Theranos to stop using its technology for all but one test.  Given how soon after it came from the WSJ, the FDA had to have been in the process of investigating Theranos long before
Jan. 27, 2016: CMS cited Theranos and said that its testing posed "immediate jeopardy to patients"; the appeal process goes on through April (given CMS' speed, this process likely also predated the WSJ
July 7, 2016: CLIA certificate revoked and Holmes prohibited from running a testing company

The FDA was the first formal regulatory action, and thus had the biggest impact.  But it may be fair to say that FDA was shorthand for "federal regulators".

Still disagree with you. Perhaps in retrospect it's more clear, but at the time it absolutely was not. For example, Cleveland Clinic CEO Toby Cosgrove was still more-or-less positive about Theranos even after the FDA action: http://www.cnbc.com/2015/10/30/well-work...c-ceo.html

Let's think through two different scenarios -- of which it was not, at the time of FDA's action, clear which one was true (from the outside):

1) Best Case Scenario: FDA found that the nanotainer was a class II device, rather than a class I device as Theranos claimed. That meant Theranos could -- assuming everything was in order -- get 510(k) clearance within three to six months of submission to the agency. Nor was the agency rejecting the premise of Theranos out of hand, as they did with 23andMe. Even if they did, you can still bend the agency your way with concerted effort; the FDA has since come around to 23andMe's way of thinking and regulated the industry (more-or-less) to the company's desires. Not a death knell at all, really.

2) Worst Case Scenario: which you describe as "basically Quest Diagnostics." That's not that bad a fate! Quest Diagnostics is a $9 billion or so company. Certainly not a world-changer, but it's no shame to have founded that company. No one would've created a thread on Cardboard had Theranos suffered an altogether pretty minor FDA violation,* and wound up a solid lab company.

* (Let's be real -- this was no Vioxx or OxyContin, or metal-on-metal hip, at least from the evidence available at the time of the FDA citation.)

Moreover the tenor of the coverage didn't shift until January, after the CMS action. Until then non-Wall Street Journal media were taking a bit of a he-said,she-said tone to the matter -- certainly respectful of WSJ claims but not dismissing Theranos's out of hand.

It wasn't until January's CMS citation -- which potentially came with a $10,000/day fine, banning from the lab industry, and revocation of lab license -- that the tone changed. I didn't see people predicting the demise of Theranos until January, though it's possible my memory is faulty.

Finally, that CMS's action -- rather than FDA's -- was decisive can be seen in Theranos's acts themselves. The company is laying off 40% of its workforce and shutting off its labs, but still developing devices. (Allegedly.) If they do develop a device, they'd submit to FDA. That means their actions are more consistent with CMS being the decisive blow than FDA.

[washingtonismoney]

Well, if they could do testing with larger containers or needles, then they are basically Quest diagnostics.  CMS was the last nail in the coffin, but FDA came first.  To give you the order of things:

Oct. 16, 2015: Wall Street Journal comes out with its expose
Oct. 28, 2015: FDA orders Theranos to stop using its technology for all but one test.  Given how soon after it came from the WSJ, the FDA had to have been in the process of investigating Theranos long before
Jan. 27, 2016: CMS cited Theranos and said that its testing posed "immediate jeopardy to patients"; the appeal process goes on through April (given CMS' speed, this process likely also predated the WSJ
July 7, 2016: CLIA certificate revoked and Holmes prohibited from running a testing company

The FDA was the first formal regulatory action, and thus had the biggest impact.  But it may be fair to say that FDA was shorthand for "federal regulators".

Still disagree with you. Perhaps in retrospect it's more clear, but at the time it absolutely was not. For example, Cleveland Clinic CEO Toby Cosgrove was still more-or-less positive about Theranos even after the FDA action: http://www.cnbc.com/2015/10/30/well-work...c-ceo.html

Let's think through two different scenarios -- of which it was not, at the time of FDA's action, clear which one was true (from the outside):

1) Best Case Scenario: FDA found that the nanotainer was a class II device, rather than a class I device as Theranos claimed. That meant Theranos could -- assuming everything was in order -- get 510(k) clearance within three to six months of submission to the agency. Nor was the agency rejecting the premise of Theranos out of hand, as they did with 23andMe. Even if they did, you can still bend the agency your way with concerted effort; the FDA has since come around to 23andMe's way of thinking and regulated the industry (more-or-less) to the company's desires. Not a death knell at all, really.

2) Worst Case Scenario: which you describe as "basically Quest Diagnostics." That's not that bad a fate! Quest Diagnostics is a $9 billion or so company. Certainly not a world-changer, but it's no shame to have founded that company. No one would've created a thread on Cardboard had Theranos suffered an altogether pretty minor FDA violation,* and wound up a solid lab company.

* (Let's be real -- this was no Vioxx or OxyContin, or metal-on-metal hip, at least from the evidence available at the time of the FDA citation.)

Moreover the tenor of the coverage didn't shift until January, after the CMS action. Until then non-Wall Street Journal media were taking a bit of a he-said,she-said tone to the matter -- certainly respectful of WSJ claims but not dismissing Theranos's out of hand.

It wasn't until January's CMS citation -- which potentially came with a $10,000/day fine, banning from the lab industry, and revocation of lab license -- that the tone changed. I didn't see people predicting the demise of Theranos until January, though it's possible my memory is faulty.

Finally, that CMS's action -- rather than FDA's -- was decisive can be seen in Theranos's acts themselves. The company is laying off 40% of its workforce and shutting off its labs, but still developing devices. (Allegedly.) If they do develop a device, they'd submit to FDA. That means their actions are more consistent with CMS being the decisive blow than FDA.

[BostonCard]

To some extent, our disagreement is non-substantive.  My original point is that Holmes/Theranos underestimated the role of regulatory agencies in the healthcare setting.  Part of their business model was that they thought they could disrupt by ignoring/sidestepping regulation, in much the same way that part of Uber's and AirBnB's business models have been sidestepping regulations aimed at taxis and hotels. But regulation in the healthcare setting is different than regulation of taxis (federal versus local, for one).

But I do think the FDA action was significant.  I don't think the analogy to 23andMe is apt.  First, 23andMe has only received clearance from the FDA to reinstate its pre-conception screening tests, because those do not "diagnose" a disease; they only tell you the risk of having a child with a disease.  23andMe still cannot return BRCA1 mutation status, or any other health related trait.  Secondly, I'm not entirely sure how many of the people who subscribed to 23andMe did so specifically for their genetic risk.  Having used their service (pre-FDA), I looked at the health traits and said "meh".  And even so, the FDA action has largely shifted 23andme's business model from a DTC genetics company to a drug discovery company (maybe; this is just starting).  As for Theranos, the problem with being basically a "Quest diagnostics" is that they are going up against an already successful company named Quest Diagnostics.  Without the secret sauce of being able to set up a bunch of small scale portable labs (at Walgreens, etc.) or small kiosks, what distinguished them from Quest?

I'd have to go back, but I'm pretty sure there were a couple articles on top of the WSJ article suspicious of Theranos, especially after the FDA action.  I remember another vanity fair (or similar publication) article that was pretty critical.  Also, it was around that time that academic researchers started expressing skepticism.  I think John Ionnidis (Stanford guy) penned a couple of critical editorials, and the first of a couple of trials comparing the accuracy of results from Theranos to results from other labs showing Theranos was very inaccurate came out, and I think this was before CMS.

BC

[BostonCard]

To some extent, our disagreement is non-substantive.  My original point is that Holmes/Theranos underestimated the role of regulatory agencies in the healthcare setting.  Part of their business model was that they thought they could disrupt by ignoring/sidestepping regulation, in much the same way that part of Uber's and AirBnB's business models have been sidestepping regulations aimed at taxis and hotels. But regulation in the healthcare setting is different than regulation of taxis (federal versus local, for one).

But I do think the FDA action was significant.  I don't think the analogy to 23andMe is apt.  First, 23andMe has only received clearance from the FDA to reinstate its pre-conception screening tests, because those do not "diagnose" a disease; they only tell you the risk of having a child with a disease.  23andMe still cannot return BRCA1 mutation status, or any other health related trait.  Secondly, I'm not entirely sure how many of the people who subscribed to 23andMe did so specifically for their genetic risk.  Having used their service (pre-FDA), I looked at the health traits and said "meh".  And even so, the FDA action has largely shifted 23andme's business model from a DTC genetics company to a drug discovery company (maybe; this is just starting).  As for Theranos, the problem with being basically a "Quest diagnostics" is that they are going up against an already successful company named Quest Diagnostics.  Without the secret sauce of being able to set up a bunch of small scale portable labs (at Walgreens, etc.) or small kiosks, what distinguished them from Quest?

I'd have to go back, but I'm pretty sure there were a couple articles on top of the WSJ article suspicious of Theranos, especially after the FDA action.  I remember another vanity fair (or similar publication) article that was pretty critical.  Also, it was around that time that academic researchers started expressing skepticism.  I think John Ionnidis (Stanford guy) penned a couple of critical editorials, and the first of a couple of trials comparing the accuracy of results from Theranos to results from other labs showing Theranos was very inaccurate came out, and I think this was before CMS.

BC

[washingtonismoney]

But I do think the FDA action was significant.  I don't think the analogy to 23andMe is apt.  First, 23andMe has only received clearance from the FDA to reinstate its pre-conception screening tests, because those do not "diagnose" a disease; they only tell you the risk of having a child with a disease.  23andMe still cannot return BRCA1 mutation status, or any other health related trait.  Secondly, I'm not entirely sure how many of the people who subscribed to 23andMe did so specifically for their genetic risk.  Having used their service (pre-FDA), I looked at the health traits and said "meh".  And even so, the FDA action has largely shifted 23andme's business model from a DTC genetics company to a drug discovery company (maybe; this is just starting).  As for Theranos, the problem with being basically a "Quest diagnostics" is that they are going up against an already successful company named Quest Diagnostics.  Without the secret sauce of being able to set up a bunch of small scale portable labs (at Walgreens, etc.) or small kiosks, what distinguished them from Quest?

I'd have to go back, but I'm pretty sure there were a couple articles on top of the WSJ article suspicious of Theranos, especially after the FDA action.  I remember another vanity fair (or similar publication) article that was pretty critical.  Also, it was around that time that academic researchers started expressing skepticism.  I think John Ionnidis (Stanford guy) penned a couple of critical editorials, and the first of a couple of trials comparing the accuracy of results from Theranos to results from other labs showing Theranos was very inaccurate came out, and I think this was before CMS.

1) I can't speak to whatever Holmes's attitude was. But she certainly wasn't trying to flout regulations; in fact, her original strategy (it appears) was to use regulations to evade other forms of scrutiny. And Holmes went through legislative channels in Arizona to establish the direct-to-consumer lab marketing; they didn't establish wildcat labs on the streets of Tempe.

You cite Ioannidis later in your post, but the source of his annoyance was that Theranos was planning on using FDA clearance/approval to evade peer reviewed journals. Which is an informal form of regulation but not quite the same as the Uber/Airbnb approach to the law.

2) re: 23andMe -- they may or may not return BRCA1 status, I'm not familiar with their exact service at the moment. But they do return data diagnosing disease -- for example for Bloom Syndrome. So they certainly could, should they choose to go through the proper clearance.

And I'm not sure that their strategy has shifted. They sell Health + Ancestry kits at $199 -- surely, with every kit at a loss. I don't believe their prices have shifted dramatically; they were always trying to amass lots of data on consumers' genomes and pair that with the many quizzes, etc. they offer to consumers to learn phenotypic information.

3) There were some articles expressing scrutiny. Before WSJ, Business Insider ran an article quoting scientists expressing skepticism -- but this was a "show us what you've got" article, not an "utter fraud" article. Some industry publications (e.g. Dark Daily) had also written skeptical articles. Besides Ioannidis, among the scientific community, I recall one Canadian physician wrote a similarly skeptical article. But certainly the tone was mostly adulatory.

After the WSJ article the tone shifted. But while some articles shifted -- a Fortune writer wrote a mea culpa that his overly credulous article was, well, overly credulous -- overall the tone was, "Wow, Elizabeth Holmes has a lot to prove," but certainly not in the tone of "This business is an outright fraud/doomed to fail," as the consensus currently is.

[washingtonismoney]

But I do think the FDA action was significant.  I don't think the analogy to 23andMe is apt.  First, 23andMe has only received clearance from the FDA to reinstate its pre-conception screening tests, because those do not "diagnose" a disease; they only tell you the risk of having a child with a disease.  23andMe still cannot return BRCA1 mutation status, or any other health related trait.  Secondly, I'm not entirely sure how many of the people who subscribed to 23andMe did so specifically for their genetic risk.  Having used their service (pre-FDA), I looked at the health traits and said "meh".  And even so, the FDA action has largely shifted 23andme's business model from a DTC genetics company to a drug discovery company (maybe; this is just starting).  As for Theranos, the problem with being basically a "Quest diagnostics" is that they are going up against an already successful company named Quest Diagnostics.  Without the secret sauce of being able to set up a bunch of small scale portable labs (at Walgreens, etc.) or small kiosks, what distinguished them from Quest?

I'd have to go back, but I'm pretty sure there were a couple articles on top of the WSJ article suspicious of Theranos, especially after the FDA action.  I remember another vanity fair (or similar publication) article that was pretty critical.  Also, it was around that time that academic researchers started expressing skepticism.  I think John Ionnidis (Stanford guy) penned a couple of critical editorials, and the first of a couple of trials comparing the accuracy of results from Theranos to results from other labs showing Theranos was very inaccurate came out, and I think this was before CMS.

1) I can't speak to whatever Holmes's attitude was. But she certainly wasn't trying to flout regulations; in fact, her original strategy (it appears) was to use regulations to evade other forms of scrutiny. And Holmes went through legislative channels in Arizona to establish the direct-to-consumer lab marketing; they didn't establish wildcat labs on the streets of Tempe.

You cite Ioannidis later in your post, but the source of his annoyance was that Theranos was planning on using FDA clearance/approval to evade peer reviewed journals. Which is an informal form of regulation but not quite the same as the Uber/Airbnb approach to the law.

2) re: 23andMe -- they may or may not return BRCA1 status, I'm not familiar with their exact service at the moment. But they do return data diagnosing disease -- for example for Bloom Syndrome. So they certainly could, should they choose to go through the proper clearance.

And I'm not sure that their strategy has shifted. They sell Health + Ancestry kits at $199 -- surely, with every kit at a loss. I don't believe their prices have shifted dramatically; they were always trying to amass lots of data on consumers' genomes and pair that with the many quizzes, etc. they offer to consumers to learn phenotypic information.

3) There were some articles expressing scrutiny. Before WSJ, Business Insider ran an article quoting scientists expressing skepticism -- but this was a "show us what you've got" article, not an "utter fraud" article. Some industry publications (e.g. Dark Daily) had also written skeptical articles. Besides Ioannidis, among the scientific community, I recall one Canadian physician wrote a similarly skeptical article. But certainly the tone was mostly adulatory.

After the WSJ article the tone shifted. But while some articles shifted -- a Fortune writer wrote a mea culpa that his overly credulous article was, well, overly credulous -- overall the tone was, "Wow, Elizabeth Holmes has a lot to prove," but certainly not in the tone of "This business is an outright fraud/doomed to fail," as the consensus currently is.

[BostonCard]

The Bloom syndrome approval is only a carrier status.  That is, it will tell you if you are at risk of having a child with the disease, not whether you have the disease itself.  For the foreseeable future, the only health information that 23andMe will return is carrier screening for autosomal recessive diseases.  That means no BRCA mutations, no Huntington's disease, no pharmacogenetics (tells you if you metabolize a drug more or less efficiently), basically nothing that can be used to diagnose or treat a disease in the person getting the test.

[BostonCard]

The Bloom syndrome approval is only a carrier status.  That is, it will tell you if you are at risk of having a child with the disease, not whether you have the disease itself.  For the foreseeable future, the only health information that 23andMe will return is carrier screening for autosomal recessive diseases.  That means no BRCA mutations, no Huntington's disease, no pharmacogenetics (tells you if you metabolize a drug more or less efficiently), basically nothing that can be used to diagnose or treat a disease in the person getting the test.

[82lsju]

in a surprise to few, at least one investor now suing Theranos

One of Theranos Inc.’s biggest financial backers has sued the embattled startup and its founder for allegedly lying to attract its nearly $100 million investment, according to a fund document and people familiar with the matter.

Partner Fund Management LP, a San Francisco-based hedge fund, filed the suit in Delaware Court of Chancery Monday afternoon, a letter to the hedge-fund’s investors says.

“Through a series of lies, material misstatements, and omissions, the defendants engaged in securities fraud and other violations by fraudulently inducing PFM to invest and maintain its investment in the company,” says the letter, which was reviewed by The Wall Street Journal.

http://www.wsj.com/articles/major-invest...1476139613

[82lsju]

in a surprise to few, at least one investor now suing Theranos

One of Theranos Inc.’s biggest financial backers has sued the embattled startup and its founder for allegedly lying to attract its nearly $100 million investment, according to a fund document and people familiar with the matter.

Partner Fund Management LP, a San Francisco-based hedge fund, filed the suit in Delaware Court of Chancery Monday afternoon, a letter to the hedge-fund’s investors says.

“Through a series of lies, material misstatements, and omissions, the defendants engaged in securities fraud and other violations by fraudulently inducing PFM to invest and maintain its investment in the company,” says the letter, which was reviewed by The Wall Street Journal.

http://www.wsj.com/articles/major-invest...1476139613