- Week 10 of Theranos founder Elizabeth Holmes’ fraud trial has concluded.
- Jurors learned a federal regulator said Theranos’ lab posed “immediate jeopardy to patient health.”
- Here’s everything that happened in the trial in its tenth week.
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Former lab director unaware of proprietary device
Lynette Sawyer, Theranos’ former lab co-director for roughly six months in 2014 and 2015, continued her testimony, saying she didn’t know what Theranos’ proprietary nanotainer was, according to KTVU. This was a small vial intended to hold the blood samples from Theranos’ finger-stick tests.
Sawyer said she stayed at Theranos longer than her temporary contract stipulated at the request of Theranos’ former president and COO, Ramesh “Sunny” Balwani, even though she wanted to leave after growing “uncomfortable with the lack of clarity.”
Theranos voided as many as 60,000 test results over a 2-year period
Kingshuk Das, who was Theranos’ lab director from 2016 to 2018, told jurors that when he joined Theranos he wasn’t aware of any tests that used its proprietary machines, according to The Wall Street Journal.
Das said he raised questionable test results with Holmes, including tests that showed unusual levels of prostate-specific antigen, or PSA, in women according to CNBC. “Females should generally not have PSA detectable,” he testified. Holmes responded that rare breast cancers could be behind the abnormal results, an explanation Das said “seemed implausible.”
Das also said he decided to void every test Theranos performed on its proprietary Edison devices in 2014 and 2015, totaling anywhere from 50,000 to 60,000 tests. “These instruments were not performing from the very beginning,” he testified, adding that Theranos never resumed testing on those machines.
Jurors also heard about a report sent to Theranos from the Centers for Medicare & Medicaid Services in January 2016 following an inspection of the company’s lab in November 2015. It said that “the deficient practices of the laboratory pose immediate jeopardy to patient health and safety,” according to CNBC.
Das said he didn’t know until after he joined Theranos that it was under investigation by the Centers for Medicare & Medicaid Services.
“Hostile” behavior from Holmes’ ex and former COO
Alan Eisenman, a retired money manager and financial planner, said he first invested in Theranos in 2006 after Holmes told him that Oracle cofounder Larry Ellison was a board member and investor; that Theranos had contracts with major pharmaceutical companies; and that Theranos expected to generate $50 million to $60 million in revenue in 2007 and $200 million in 2008. (Theranos had practically no revenue through at least 2014.)
Eisenman said Holmes initially gave him quarterly updates on the company but later stopped.
“There was no information coming from the company. To me, that’s a sign of trouble,” he said, according to The New York Times. “Management didn’t like the fact that I was trying to communicate and get information.”
Despite these issues, Eisenman invested another $99,990 in Theranos in 2013. His family invested nearly $1.2 million in Theranos over the years.
Eisenman spoke of Balwani being “hostile” and “aggressive” towards him. In response to an email from Eisenman about potentially selling his shares, Balwani wrote, “Your emails are insulting full of inaccurate statements and wasteful of our time. Our next response to this email and all your future emails will come from our counsel.”
At one point, Theranos offered to buy Eisenman out of his investment at five times its value.
An unexpected announcement
Assistant US Attorney Jeffrey Schenk said Wednesday that the prosecution will likely rest its case next week. The government has called 24 witnesses in the 10 weeks of the trial so far. A previous court filing named upwards of 200 potential witnesses who could testify.
You can catch up on Week 1 here, Week 2 here, Week 3 here, Week 4 here, Week 5 here, Week 6 here, and Week 7 here, and Week 9 here. You can read how Holmes wound up on trial here and see the list of potential witnesses here. Everything else you need to know about the case is here.