Business

Rupert Murdoch bleeds $US100m from Theranos blood testing scandal

Media billionaire Rupert Murdoch is expected to lose the $US100 million ($134 million) he invested in scandal-ridden blood testing group, Theranos - thanks to some great investigative journalism by one of his own newspapers, The Wall Street Journal.  

It was the Journal which first raised doubts about the claims of the company's celebrity CEO, Elizabeth Holmes, who was a billionaire at 30 and being dubbed the Steve Jobs of biotechnology.

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Billionaire Elizabeth Holmes' net worth plummets

The US blood-test billionaire's fortune drops to zero in light of ongoing problems with her company Theranos.

The great promise of Theranos is that it could conduct the full range of laboratory tests - ranging from cholesterol to herpes - using just a few drops from a fingertip pin-prick instead of a needle and syringe.

It was expected to revolutionise healthcare affordability, and led Murdoch and other wealthy investors to inject $US632 million in Theranos between 2014 and 2015,  which valued the company at $US9 billion. 

The investments valued Holmes' stake in the company at $US4.5 billion and rocketed her into the stratosphere of celebrity CEOs. 

By October last year, the Journal started raising doubts about the accuracy of Theranos' testing and claimed it was not even using its own technology in some cases.  

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The US Food and Drug Administration (FDA) raised concerns within weeks of the report. By January this year, federal regulators were claiming the company violated clinical standards. 

By June, Forbes estimated that Holmes' stake was worthless. 

The downward descent has continued with Theranos announcing it would close labs and lay off 340 staff.

Investors are now suing the company for having "consistently and deliberately misled its investors through outsize claims about its technology's capabilities and potential to transform diagnostic testing."

It is not known if Murdoch is among them.  

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Got a tip? ckruger@fairfaxmedia.com.au

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