Theranos to Pay Arizona Customers $4.7MM in Settlement

Markets Reuters

A logo sign outside of the headquarters of Theranos in Palo Alto, California on January 24, 2016. Photo by Kristoffer Tripplaar *** Please Use Credit from Credit Field ***

Embattled blood-testing company Theranos Inc will pay $4.65 million to customers in Arizona who used its services between 2013 and 2016, the state's attorney general said on Tuesday.

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Arizona Attorney General Mark Brnovich had alleged that Theranos' advertisements misrepresented the method, accuracy and reliability of its blood testing.

Of the roughly 1.5 million blood tests Theranos sold to more than 175,000 customers in Arizona, 10 percent were voided or corrected, Brnovich said in a statement. (http://bit.ly/2pOVZzF)

Theranos said on Tuesday the agreement reflects costs incurred by customers for tests, regardless of whether the company received payment, or whether the test results were voided or corrected.

Theranos was founded by Elizabeth Holmes in 2003 to develop an innovative blood testing device that would give quicker results using just one drop of blood.

However, its fortunes waned after the Wall Street Journal published a series of articles starting in October 2015 that suggested the devices were flawed and inaccurate.

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Theranos in January announced layoffs affecting 155 jobs, or 41 percent of its workforce.

On Monday, Theranos said it would stay out of the blood-testing business for at least two years in exchange for reduced penalties from federal health authorities.

(Reporting by Divya Grover in Bengaluru; Editing by Sai Sachin Ravikumar)

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