Market Overview

Theranos On Thin Ice With Walgreens


Blood-testing firm Theranos Inc. has been under the microscope in recent weeks after news broke that the company's California lab was out of compliance with federal regulations. The firm's lab was cited for several violations, one of which was said to "pose immediate jeopardy to patient health and safety."

While Theranos has said that its lab has already undergone reforms to address regulators' concerns, the firm has yet to prove its compliance.

Walgreens Threatens To Pull Out

At the end of January, Walgreens Boots Alliance Inc (NASDAQ: WBA) issued its own warning to Theranos saying that it would terminate its retail partnership with the lab if the corrections were not made before the end of February.

The deadline marks a worsening relationship between the two as Walgreens works to distance itself from worries regarding the lab's safety.

Effects For Theranos

For Theranos, the loss of a partnership with Walgreens would be a blow to the company's forward momentum. At the moment, Walgreens offers low-cost Theranos blood tests at its 40 "wellness center" locations. Before the regulation issues, the two were planning to expand their partnership to open even more wellness centers around the country, but Walgreens has since put those plans on hold.

At the moment, Walgreens has stopped sending blood samples to Theranos' California lab in question, but the company says it will terminate the partnership all together if the problem isn't resolved soon.

Theranos would struggle if Walgreens were to abandon the lab as the wellness centers represent the firm's only point of contact with customers. Without those centers, Theranos would have to go up against larger labs to compete for doctors' business.

Posted-In: Theranos WalgreensNews Rumors Markets


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