In the past year, Elizabeth Holmes, founder and CEO of Theranos, has proven impressively tenacious. She stood firm as her once promising biotech company faced scandal after scandal—from the revelation that its “revolutionary” blood testing technology doesn’t work and her lab endangered patients’ health, to the federal sanctions that shut down the company’s labs and banned Holmes from the business altogether. Equally tenacious, it seemed, were Theranos’ investors. Amid the blows, they stood quietly by or professed their faith in Holmes and her embattled company.
All that has changed. According to the Wall Street Journal, one of Theranos’ largest investors, a California-based hedge fund named Partner Fund Management LP, filed a lawsuit against the company Monday afternoon. The suit, filed in Delaware under seal, alleges that Theranos deceived PFM in order to net a nearly $100 million investment from the hedge fund in 2014.
In a letter to its own investors that was reviewed by the WSJ, the hedge fund wrote: