Photo by Kevin Krejci/Flickr
Theranos had come far from the days when it was the darling in the biotech industry. The sources of Wall Street Journal have claimed that the blood-testing company has dodged bankruptcy by availing a loan from the Fortress Investment Group amounting to $100 million. In an email, Elizabeth Holmes, its founder, reportedly said that the move should maintain Theranos afloat “through 2018.” However, naturally, there are some strings attached — Fortress requires that it sees a return on its investment.
Holmes reportedly stated that Theranos has its patent library as the collateral and that Fortress receives 4 percent equity. She added that the loan is also subject to “certain product and operational milestones.” In other words, if Fortress does not observe enough progress, it could easily pull the carpet from the feet of Theranos with relatively little warning.
Theranos has not issued a comment so far. However, it is safe to state that the company extremely needed the cash infusion. With increasing financial troubles from various settlements and lost business, it was swiftly running out of options. The 2-year prohibition on running or owning clinical labs has not helped, either. The extra money could not only aid it to last long enough to consider opening labs again but could ensure that the fingerprick-testing miniLab device of the company has a shot at making it to market. The company definitely is not out of the woods yet. However, it might have a path to safety.