The Morning Brief: Theranos Settles With Hedge Fund

May 02, 2017   Stephen Taub

The blood-testing services company settled lawsuits brought by hedge fund Partner Fund Management.

Theranos, the controversial company founded by Elizabeth Holmes that claimed to have developed a revolutionary blood-testing service, announced it has settled two lawsuits brought by hedge fund Partner Fund Management. The San Francisco-based firm had invested $96.1 million in Theranos in February 2014. The terms of the settlement were not disclosed, but under the agreement all claims brought by the investor against Theranos and its officers and directors were dismissed. "The company now brings to a close the burden and expense of litigation and preserves resources to bring the miniLab platform to market," Theranos said in a May 1 announcement. Theranos and Holmes have been under attack since regulators found there were problems with the accuracy of many of its tests. On April 17, the company said it resolved all legal and regulatory proceedings between Theranos and Centers for Medicare & Medicaid Services. The following day, the company resolved claims by the Arizona Attorney General relating to Theranos blood-testing services in Arizona.


Barclays cut its price target on Athenahealth, a favorite short position of Greenlight Capital, from $97 a share to $88 apiece, asserting "growth decelerates" after the company’s first-quarter report. Barclays took a pessimistic view as far back as November 2015 when the investment bank downgraded the shares to "underweight." Shares of the healthcare computing services company closed Monday up slightly at $98.28, after plummeting more than 19 percent April 28.


Shares of Valeant Pharmaceuticals International jumped 4.4 percent to close at $9.66 after the embattled drug company announced that it closed earlier than expected the sale of three skincare brands to L’Oréal, as well as the divestiture of a manufacturing facility in Brazil. As a result, it has cut its senior secured terms loans by another $220 million as of May 1. Altogether, the company has pared its total debt by $3.6 billion since the end of the first quarter of 2016. "The company continues to advance toward its expectation of paying down $5 billion in debt from divestiture proceeds and free cash flow within 18 months of August 2016," Valeant said in an announcement on May 1.


Barclays raised its price target on Praxair from $125 to $135 after the industrial gases company reported first-quarter earnings that exceeded expectations and the company’s guidance. In late December, Praxair agreed to acquire German rival Linde AG for $35 billion. "There is meaningful upside to our price target if Praxair can deliver its merger with Linde as synergy accretion would enhance earnings," Barclays told clients in a note. Soroban Capital Partners recently disclosed that it boosted its stake in the company to 17.6 million shares, or 6.2 percent of the total outstanding. At year-end it owned 2.4 million shares. The stock was flat on Monday.

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