Former Safeway CEO Steve Burd testified at the Elizabeth Holmes trial last week, saying the company’s partnership with Theranos failed due to multiple delays of the blood-testing devices.
Burd thought a partnership with Theranos would be an opportunity for the grocery chain to expand into healthcare, he testified. He said he was drawn to Theranos and its technology because of the claims that the tests could perform blood tests faster, cheaper and without a full laboratory. The former CEO of two decades said he imagined that people could get their blood tested and shop while they wait for results.
Safeway spent hundreds of millions of dollars to build clinics in many of its grocery stores in preparation for the Theranos machines.
But repeated delays from the Silicon Valley startup began to raise red flags, Burd said.
“Deadlines were continuing to be missed and we often weren’t given an explanation for that,” he said, CNBC reported. “I kept asking, ‘Give me some details here.’ So that was the frustrating part. We always tried to help them any way we could.”
Burd said Holmes demonstrated the device to him at a board meeting. During the demonstration, the MiniLab device ran a prostate-specific antigen test on a board member, but the company never produced a test result despite blood being drawn.
He also alleged that Holmes was charismatic and could command a room, comparing her to U.S. presidents, CNN reported.
“There are very few people that I’ve met in business that I would actually say were charismatic,” Burd said, according to CNN. “She was clearly charismatic. She was very smart.”
Days earlier, former U.S. Secretary of Defense James Mattis testified that Holmes appeared to be in control of the company and that she presented herself as “sharp, articulate and committed” in board meetings.
A second juror was dismissed from the trial due to religious beliefs after expressing concern and conflict related to the punishment Holmes could face based on how the juror — who identified as a Buddhist — voted. The alternate juror who was selected to fill in expressed similar concerns regarding Holmes’ sentencing, leading U.S. District Court Judge Edward Davila to remind the juror that they would not be responsible for whatever punishment Holmes might face.
Holmes claimed Theranos would revolutionize blood testing with technology that could analyze tiny amounts of blood and inked retail partnerships with Walgreens and Safeway. Forbes in 2015 recognized Holmes as America’s richest self-made woman based on Theranos’ multibillion-dollar valuation at the time.
Investigative reporting soon dismantled Holmes’ technological claims, raising questions about whether she and others misled investors. The downward spiral culminated in the 2018 shutdown of the company, with the U.S. Securities and Exchange Commission accusing Holmes and former Theranos President and COO Sunny Balwani of a “massive fraud.”
Holmes and Balwani face 10 counts of wire fraud and two counts of conspiracy to commit wire fraud over allegations that they knowingly misled investors by claiming Theranos technology could revolutionize blood testing.
They have both pleaded not guilty to all charges. Balwani’s trial is expected to follow the Holmes trial.
Read more Elizabeth Holmes trial updates here:
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