A former Theranos lab director testified on Friday in the Elizabeth Holmes federal fraud trial that the company was aware of the multiple concerns raised by physicians and Theranos employees prior to the Walgreens launch.
Adam Rosendorff, a Theranos lab director from 2013 until late 2014, testified that Holmes and other top executives were pushing him to validate tests that he was not confident in, CNBC reports. The former lab director testified that he sent an email to Holmes in August 2013 that said that the blood-testing device was not ready for a launch in Walgreens stores. He also raised issues related to the training and staffing in the laboratory.
Rosendorff also spoke directly with Holmes, who had a countdown of the days until the Walgreens launch posted on her office window, regarding the concerns specific to the accuracy of three blood tests and she seemed nervous, he alleged.
“She was not her usual composed self. She was trembling a little. Her knee was tapping,” Rosendorff testified, according to multiple media reports. “She didn’t seem surprised to me, she just seemed nervous and upset.”
Rosendorff’s testimony corroborates the statements from a former Theranos scientist during last week’s testimonies who alleged that Holmes also pressured her to validate blood tests to speed up a rollout of the Edison device prior to the Walgreens launch. Surekha Gangakhedhar, like Rosendorff, testified that she also raised the concerns with Holmes and explained that the machines were not ready to be used on patients.
Theranos was allegedly voiding results of a blood-carbon-dioxide test that had inaccurate results, Rosendorff said during the trial. Prosecutor John Bostic also showed the jury emails that reflected incidents when doctors raised concerns about patient test results, The Mercury News reports. An internal email presented to the jury alleged that Holmes requested that there be no mention of the tests being voided and that the incidents of healthcare providers asking about missing bicarbonate results should be chalked up to the test being unavailable for the samples collected.
Rosendorff reported the concerns to Holmes rather than former president and chief operating officer Sunny Balwani because he thought it would have more of an impact since Balwani frequently dismissed concerns, the scientist alleged. Despite the concerns, he testified that he felt that the company was putting more of an emphasis on fundraising and appeasing investors than it was on patient health and safety.
Holmes allegedly told Rosendorff in the meeting that Theranos could use conventional lab equipment at Walgreens instead of the Edison technology rather than delay the launch, CNBC reports. He testified that the company modified FDA-approved Siemens machines to run small blood samples by making “micro-cups” to hold the samples, but the third-party machines were no longer approved by the FDA once they were modified.
“You’ll obviously need to make sure our micro-cups and protocol/modifications are not in any way visible to any Siemens rep,” Holmes said in an email that was presented to the jury.
Rosendorff is expected to take the witness stand again this week.
Holmes and Theranos were once believed to be the next shining stars of Silicon Valley. Holmes claimed her company 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 Balwani of what it described as a “massive fraud.”
Holmes, along with Balwani, faces 10 counts of wire fraud and two counts of conspiracy to commit wire fraud over allegations that she 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.
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