Walgreens Trashes Theranos in Their Fiery $140 Million Lawsuit Battle

Vanity Fair New Establishment Summit - Day 1
SAN FRANCISCO, CA - OCTOBER 06: NBC News Special Anchor Maria Shriver (L) and Theranos Founder and C.E.O. Elizabeth Holmes speak onstage during "True Blood¬óDiagnostics in the New Age" at the Vanity Fair New Establishment Summit at Yerba Buena Center for the Arts on October 6, 2015 in San Francisco, California. (Photo by Michael Kovac/Getty Images for Vanity Fair)
Photograph by Michael Kovac — Getty Images for Vanity Fair

Walgreens’ legal fight with embattled blood testing upstart Theranos was never going to be pretty. Now, we have some clues as to exactly how ugly it’s going to get.

News broke last week that the drugstore giant had filed suit against Elizabeth Holmes’ now-hobbled unicorn for breach of contact. The two firms were former partners, with Walgreens providing Theranos’ finger-prick blood test services at 40 of its “Wellness Centers” in Arizona and California.

But as investigative reports by media outlets, inquiries by Congressional lawmakers, consumer lawsuits, and regulatory sanctions began to pile up surrounding the validity of Theranos’ technological claims and deficiencies in its labs—which some feared could pose “immediate jeopardy” to patients—Walgreens scuttled the agreement. (Read Fortune’s timeline of Theranos and CEO Holmes’ saga here.)

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Walgreens’ (WBA) complaint against the company from last week was sealed, so details were sparse. But the public version of the complaint (which is somewhat redacted) has now been released.

And the pharmacy chain claims that it had been consistently misled by Theranos—which allegedly didn’t even inform Walgreens that 31,000 of the blood test results provided to its customers were voided until June 11. In fact, Walgreens says it only found out about these voided tests through media reports. The firm pulled out of its Theranos deal one day later after the confirmation.

Theranos eventually decided to shut down its clinical lab operations and focus on developing a new portable blood testing device called the “miniLab,” during a presentation by Holmes that was afterward labeled by some as a “bait-and-switch.”

Fortune has reached out to Theranos about the validity of the specific lawsuit allegations and will update this post if it responds. The company did issue a statement last Tuesday addressing the complaint, arguing that Walgreens’ decision to pull out of the collaboration was in and of itself a dereliction, which made it impossible for Theranos to maintain its clinical labs.

“Over the years, Walgreens consistently failed to meet its commitments to Theranos,” read the statement.

“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.”

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