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SAN JOSE, California — Happened theranos A small startup struggling to meet the demands of working with large, sophisticated and powerful companies? Or was Elizabeth Holmes, the former CEO of the blood testing company, deceiving these companies to get money?
This debate was at the center of the testimony in the sixth week of Mrs. Holmes. fraud case in San Jose. Charged with 12 counts of fraud and conspiracy to commit fraud. His partner in business and romance, Ramesh Balwani, was also indicted and will be tried separately next year. Both pleaded not guilty.
Here are the takeaways from this week’s trades:
‘Discouraged’ retail partners
Steve Burd, former CEO of Safeway, said Ms. Holmes had convinced her that Theranos’ machines could quickly, accurately and inexpensively perform hundreds of blood tests with a drop of blood. Mr. Burd said he was impressed with the potential new line of business and that Safeway formed a partnership to put Theranos machines in their markets and spent $275 million to refurbish the stores to accommodate test centers.
But in the e-mails, Mr. Burd was increasingly frustrated by Mrs. Holmes and Theranos.
“I want to help, but you make it difficult,” he wrote in one. In another, he said he could only remember being discouraged once in the last 62 years, saying, “This is my second event, I’m getting close.” The subject of another was simply “Discouragement”. Mr. Burd said that after Theranos’ repeated delays, the partnership fell apart.
Wade Miquelon and Nimesh Jhaveri, two former Walgreens executives, offered a similar story. As part of a partnership agreement, Walgreens agreed to pay Ms. Holmes’ company a $100 million “innovation fee” and invested $40 million in equity convertible securities.
Walgreens stopped offering Theranos tests in 2016, and the two-year test results were ultimately invalidated.
a fake report
The prosecution presented one of the incriminating documents, which was previewed at the start of the trial.
In his opening remarks, Robert Leach, the US assistant attorney who oversaw the prosecution, said Theranos was building a case. 55 page report Prominently displaying the logos of pharmaceutical manufacturers such as GlaxoSmithKline, Pfizer, and Schering-Plough, and appearing to validate Theranos’ technology. Theranos used the report to request investment.
One problem: Mr Leach said the pharmaceutical companies did not write, confirm or accept the results in the report. The word “institute” is misspelled on one page.
Miquelon said Walgreens reviewed the document as part of its scrutiny on Theranos and believes it has approved the pharmaceutical companies’ technology.
“My assumption was that both sides agreed with what was written,” Mr Miquelon said of the report.
A figured lab director
Jurors recently spent six days listening to the former Theranos lab director Adam Rosendorfftestified about his work on the highly technical elements of blood testing. He said the job requires long hours, intricate knowledge of the science behind the tests, and frequent communication with administrators, doctors and patients. Dr. Rosendorff abandoned Theranos’ lab applications and posted the damn information to The Wall Street Journal.
He was replaced by a dermatologist.
Meeting the legal requirements to become a laboratory director, but without a specialization in pathology or laboratory sciences, Dr. Sunil Dhawan was recruited for the role by Mr. Balwani, who has been his patient for nearly 15 years.
Dr. Dhawan said this week that he worked a total of five to 10 hours for Theranos between November 2014 and the summer of 2015, and went to the Silicon Valley office twice. He said he never interacted with patients, doctors, or Theranos lab workers.
Ms. Holmes’ attorney Lance Wade, Dr. He argued that Dhawan was “there when needed” and delegated responsibilities to Theranos’ full-time employees.
Media matters
In a separate Zoom hearing on Thursday, Ms. Holmes’ lawyers opposed two reporters covering Theranos.
In one case, Magistrate Nathanael Cousins commissioned reporter John Carreyrou to first expose Theranos’ problems. at The Wall Street Journal, access to the courtroom. Ms. Holmes has listed Mr Carreyrou as a potential witness, which normally prevents her from hearing his testimony.
His lawyer argued that an exception was made, saying Ms Holmes had listed Mr Carreyrou to keep him out of the courtroom due to “bad faith” and “animus”. Ms. Holmes’ lawyer, John Cline, declined to say whether the defense would call Mr Carreyrou as a witness.
In addition, Judge Cousins ordered that Roger Parloff, a former Fortune reporter, not have to hand over the report notes to the defense. Mr. Parloff wrote the first magazine cover story about Mrs. Holmes, as well as a follow-up article that said: had misled him.
Mr. Cline said he wanted to use Mr. Parloff’s notes to show that the defense was biased to the jury. Judge Cousins described the defense’s moves as a “fishing expedition.”
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