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Theranos, Walgreens reportedly reach a deal to settle suit for under $30 million

  • Theranos is telling its investors that the company finally reached an agreement to settle a lawsuit by Walgreens, people familiar with the matter tell The Wall Street Journal.
  • Walgreens had, at one point, hosted about 40 Theranos blood-testing centers.
  • The tentative agreement calls for Theranos to pay Walgreens less than $30 million, people familiar with the matter tell the Journal.
Elizabeth Holmes, CEO of Theranos.
Brendan McDermid | Reuters
Elizabeth Holmes, CEO of Theranos.

Theranos is telling its investors that the company finally reached an agreement to settle a lawsuit by Walgreens Boots Alliance, people familiar with the matter have told The Wall Street Journal. The suit argued that the struggling laboratory start-up had breached the companies' contract.

The Journal reported Wednesday morning that the feud between drugstore chain Walgreens and health tech company Theranos is nearing an end.

Walgreens had, at one point, hosted about 40 Theranos blood-testing centers.

In the suit, Walgreens was seeking to recover the $140 million that the retailer says it put into its partnership with Theranos, including a $40 million convertible-debt note and a separate payment as part of an effort to grow that relationship, the Journal said.

The tentative agreement, as reported by the Journal Wednesday, calls for Theranos to pay Walgreens less than $30 million, people familiar with the matter told the publication. The pact hadn't been completed as of late Tuesday and terms could change, the people also said.

Representatives from Theranos and Walgreens didn't immediately respond to requests from CNBC for comment.

Theranos has come out and said the suits against it were without merit. Meanwhile, Theranos still faces a civil investigation by the Securities and Exchange Commission and a criminal investigation by the Justice Department, according to court filings.

Regulators found problems in early 2016 with Theranos' lab practices, which the regulators said put patients in danger.

Walgreens' relationship with Theranos dates back to 2010. After The Journal first raised questions about Theranos' technology in Oct. 2015, Walgreens said it would end expansion of the partnership.

Earlier this year, Theranos said it settled lawsuits with one of its biggest backers.

The start-up said it reached a confidential settlement with hedge fund Partner Fund Management, which invested more than $96 million in Theranos in 2014.

Partner Fund Management had accused Theranos of securities fraud, alleging that the company had attracted the investment '[t]hrough a series of lies, material misstatements and omissions."

Read the full story from The Wall Street Journal.