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Safeway May Be Cutting Ties with Theranos

Theranos continues to get hammered by negative press from the Wall Street Journal. This time, the paper says Safeway executives are severing ties. Theranos claims the report is defamatory.

Qmed Staff

A Theranos Timeline

2003
Elizabeth Holmes founds Theranos at the age of 19. In the coming decade, she secures hundreds of millions in funding for the firm.

February 2014
Theranos CEO Elizabeth Holmes breaks her customary silence to grant a softball interview to Wired.
November 2014
Walgreens announces its plans to put Theranos technology in its pharmacies.
February 2015
JAMA publishes an article that questions Theranos' 'stealth science' approach.
Summer 2015
Theranos technology available in 40 Walgreens locations.
July 2, 2015
Theranos gets its first FDA clearance for a herpes test.
July 23, 2015
Vice President Joe Biden provided a personal endorsement for Theranos.
October 15, 2015
WSJ publishes its first critical article about Theranos, alleging the company had been misrepresenting its technology.
October 26, 2015
WSJ reports that Walgreens had frozen its expansion plans for Theranos technology in its retail locations.
October 27, 2015
Two FDA inspection documents fault the company's complaint handling protocols and accuse the company of marketing an uncleared medical device.

After spending $350 million to build clinics to prepare the way for Theranos' blood testing technology in 800 of its supermarkets, Safeway is calling it splits with the embattled Silicon Valley medtech company, The Wall Street Journal reported Tuesday.

Citing unnamed past and present Safeway executives, the Journal writes that the two companies had been collaborating on a project code-named "T-Rex" that would put blood-testing technology in Safeway stores since at least 2011. The deal is said to have fizzled because Theranos reportedly missed deadlines related to its blood-testing technology roll out, and some Safeway executives questioned the accuracy of Theranos's finger-prick blood tests.

Theranos representatives released a statement asserting that they "were disappointed to see yet another inaccurate WSJ article, entirely relying on anonymous sources." (Here is a previous Qmed analysis of the story, which includes a timeline of major events.)

"As we relayed to the Journal, the information published in this piece is again inaccurate, misleading and defamatory," the company said. Spokespeople from the company did not immediately respond to a question about whether Theranos plans to sue WSJ for libel.

The Theranos statement did not include any information to back up the company's defamation claims, however, although it did contend that the company is "committed to sharing data with regulators and with leading medical and scientific institutions."

"In line with this commitment, we have publicly invited third parties to review, validate, and publish data on our technologies, including in peer-reviewed journals, and are actively engaged in doing so," Theranos said.

A representative from Albertson's, Safeway's parent organization, declined to comment about the WSJ article.

The Journal states that Safeway had begun to rollout test centers to administer Theranos' blood tests but has mostly repurposed them for administering flu shots and travel-related vaccines.

Earlier reports suggested that Walgreens was giving extra scrutiny to its relationship with Theranos and had put plans on hold to expand the technology in its 8200 plus stores. Walgreens spokesman Jim Cohn told Qmed last month that Walgreens and Theranos are "currently in discussions about the next phase of our relationship" now that Walgreens has completed a rollout of Theranos technology in Phoenix that was part of its present agreement with Theranos. "Plans to open more Theranos Wellness Centers are dependent upon both companies' ability to reach a mutually beneficial arrangement," Cohn said.

The $350 million figure that Safeway reportedly invested in its in-store clinics was more than half of the company's $596.5 million worth of income in 2012. The Journal also cites an anonymous Safeway executive who reports that the company had invested more than $10 million in Theranos.

Learn more about medical technology trends at BIOMEDevice San Jose, December 2-3.
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