The bad news continues to pile up for beleaguered medical lab testing firm Theranos.
Grocery store chain Safeway had been hinting about a big “wellness” play for some time now, but it turns out their plans to partner up with Theranos to set up 800 wellness clinics in their stores have fizzled out as the lab test firm’s new blood testing technology has not been able to scale up to commercial use to date.
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According to sources with knowledge of the matter who spoke to the Wall Street Journal for an article published in Wednesday, Safeway spent close to $350 million to build clinics in over 800 of its supermarkets to offer Wellness services, focusing on the inexpensive “single prick” blood tests offered by Theranos. But most of the blood tests have not yet been approved by the FDA, and several years later, the Safeway Wellness clinics now almost exclusively provide flu shots and travel-related vaccines.
Moreover, the WSJ sources say the two firms are working toward dissolving their unsuccessful partnership. The Wellness clinic partnership, which was first inked in 2011, is apparently named “T-Rex” at Safeway, but it has yet to be publicly disclosed by either company.
Both current and former Safeway executives point out that Theranos has missed multiple deadlines for the launch of the blood-testing technology. A number of execs also questioned the accuracy of lab test results from Safeway employees tested as a trial of the new Wellness clinic in the grocery store’s headquarters in Pleasanton, Calif.
ValueWalk reported on October 27th that Theranos founder Elizabeth Holmes had agreed to release more data on her controversial new “Edison” blood testing technology in the near future, but it’s been more than two weeks and the firm has not released any new data or other information to date.
More on failed deal between Safeway and Theranos
One former Safeway exec noted the Theranos deal was signed before the firm announced in 2013 that it was entering another partnership to offer blood tests to through Walgreens drugstores. The exec also pointed out that Safeway signed up to be the exclusive supermarket provider of Theranos tests, and Safeway built clinics in around half of its stores nationwide.
Walgreens Boots Alliance has publicly stated that it won’t open any new Theranos blood-testing centers past the 41 it already has until Theranos fully answers questions that have recently been raised about its new technology.
A recent article in the WSJ also claimed that the Edison lab instrument developed by Theranos was handling just a tiny fraction of the tests sold to consumers as of the end of 2014. The article also alleged that several former employees had significant concerns about the new device’s accuracy.
Theranos has replied to the recent storm of criticism by said its lab tests are accurate and it has done tests on millions of patients with almost all positive feedback.
The lab testing firm also stated it is “continuing to work with” Walgreens Boots Alliance on “future opportunities and arrangements.”
Statement from general counsel of Theranos
Theranos’s general counsel, Heather King, replied to an inquiry from the WSJ by email on Tuesday, writing: “We don’t comment on discussions with other companies. The questions and information you have presented…are inaccurate and defamatory.” She declined to comment on the claims by former Safeway executives.