January 23, 2017
By Alex Keown, BioSpace.com Breaking News Staff
WASHINGTON – Gen. James Mattis is not the only cabinet pick with ties to embattled Theranos. Betsy DeVos, President Donald Trump’s pick for Secretary of Education, is also an investor in the Bay Area biotech.
In a filing with the Office of Government Ethics, DeVos revealed she holds shares of Theranos worth more than $1 million. However, according to a report in MedCity News, DeVos said that her investment in the beleaguered biotech has only generated about $201 in income.
Mattis, who was sworn to serve as Secretary of Defense last week, stepped down from his position as a member of Theranos’ board of directors earlier this month. However, Mattis did not divest his portfolio of Theranos stock. In the letter, he said his duties as secretary are “unlikely to involve particular matters affecting the financial interests of Theranos, Inc.” He added that as long as he owns stock in the privately-held company, he will not participate in any matter that has a “direct and predictable effect on the financial interests” of Theranos. Mattis also said if he divests Theranos stock, he would not participate in any matter that could affect the company for a period of one year, unless, he said, he is authorized to do so.
DeVos and Mattis are not the only Theranos investors with high political profiles. Others associated with the company included former U.S. Secretaries of State Henry Kissinger and George Schultz and former U.S. Sens. Sam Nunn and Bill Frist. Rupert Murdoch, chief executive officer of News Corp. also holds investments in the company worth about $100 million. Retired U.S. Navy Admiral and Chief of Naval Operations Gary Roughead is also an investor, according to MedCity.
Once a darling of Silicon Valley, Theranos was valued at approximately $9 billion. However, following multiple scathing reports about its blood-testing technologies and issues surrounding its clinical laboratories, the value of the company declined dramatically.
Since the company has faced such scrutiny over its blood testing technology, tech that was supposed to revolutionize the industry, Theranos has drastically pivoted its business focus to development of miniaturized portable laboratory. The company unveiled its new technology advisory board that will help guide its new tech endeavors.
While Theranos has shifted its focus, it is still facing multiple lawsuits related to its blood-testing labs. Last week, Arizona’s attorney general said he planned to file a lawsuit against the company over a “long-running scheme of deceptive acts and misrepresentations” that are related to its blood testing technology. Other lawsuits include a $140 million lawsuit filed by former partner Walgreens and a lawsuit filed by a Bay Area hedge fund that alleged the biotech company duped investors about the efficacy of its products in order to attract investments of nearly $100 million. Theranos is also the subject of a criminal investigation by the U.S. Department of Justice with investigations centering on whether or not Theranos and its executives misled investors as to the efficacy of its blood-testing products.
