Taking the witness stand for a second day of testimony, Theranos founder Elizabeth Holmes sought to show that major pharmaceutical companies had indeed worked with her failed blood-testing company — an attempt to overcome some of the most damaging evidence the jury has heard so far about Theranos’ accuracy issues, including testimony from representatives of two major pharma firms suggesting Holmes distributed reports to her investors with logos stolen from their companies.
Holmes first took the witness stand Friday in what experts say is an unusual and potentially risky move for a defendant, opening herself up to aggressive cross-examination by government lawyers who have charged her with 11 felony fraud counts in connection with the now-infamous failure of her Silicon Valley start-up.
Holmes’ testimony in U.S. District Court in San Jose on Monday highlighted the work Theranos did with the drug firms, including Novartis, AstraZeneca and Merck. Answering questions from her lawyer, Kevin Downey, Holmes also tried to offset earlier testimony from Pfizer and Schering-Plough scientists who claimed they had rejected the glowing Theranos’ reports that their companies’ logos later appeared on.
Downey displayed for jurors email correspondence demonstrating that Pfizer had continued to show interest in Theranos long after dismissing the company’s technology in 2008. The emails, from 2013 and 2015, include a Pfizer executive saying, “We are very much looking forward to future interactions,” regarding Theranos blood testing.
Holmes testified that a scientist for Schering-Plough had also emailed Theranos with “positive feedback” about the start-up’s technology. However, that scientist testified for the prosecution earlier this month that she had been frustrated by Holmes “cagey” and evasive responses to questions about the blood-testing tech. Both she and the Pfizer scientist who testified for the prosecution said that they were unaware of anyone at their companies approving the use of their logos on Theranos’ materials.
Speaking about the work Theranos did with other pharmaceutical companies, Holmes’ answers at times lacked specificity. Asked how well her company’s test results compared against a reference standard in a Novartis study, she responded, “I remember it being really good.” Asked whether Theranos had developed blood tests for its work with AstraZeneca, Holmes said, “I think so.”
She also testified that Merck sent Theranos data showing “how well we performed” and pledged to find a clinical study to work together on, though Holmes conceded no such study materialized. However, she said a partnership with pharmaceutical company Centocor led to a clinical trial that Theranos received payment for, and that a Centocor doctor spoke about at an industry conference.
GlaxoSmithKline found “good correlation” between Theranos test results and reference tests, and said Theranos’ “machines worked well” according to a 2008 report from that pharma giant that was displayed in court. Holmes, essentially repeating language from the displayed report, said, “They thought our system eliminated the need for a lab.”
Holmes and her lawyer also sought to undo damage from evidence that Theranos blood analyzers could only run a dozen blood tests on patients, despite claims by the company that it could do all the tests of a standard major lab. Much of the prosecution’s case has focused on Theranos’ use of third-party machines for tests its own devices could not perform.
Holmes testified Monday that “the series-four could do any blood test.” Previously, jurors heard testimony from a Theranos laboratory director who said he voided all the patient blood-test data that came from Theranos series-three blood analyzer, and heard evidence that subsequent iterations of the device were not used on patients.
Holmes, who founded the Palo Alto blood-testing startup at age 19 in 2003, is charged with allegedly bilking investors out of hundreds of millions of dollars, and defrauding patients with false claims that the company’s machines could conduct a full range of tests using just a few drops of blood. She and her co-accused, former company president Sunny Balwani, have denied the allegations. Balwani is to be tried next year.
The biggest question hanging over Holmes’ testimony is whether she will attempt to offload responsibility for alleged fraud onto Balwani, her former lover. She has in court filings accused Balwani of coercing, controlling and abusing her, and she has put on her list of potential witnesses psychologist Mindy Mechanic, who has assessed Holmes and frequently acts as an expert witness on matters of relationship violence.
Holmes faces maximum penalties of 20 years in prison and a $2.75 million fine if convicted, plus possible restitution, the Department of Justice has said.
