It was not a happy Easter weekend for either Elizabeth Holmes or Sunny Balwani. Late on Monday, Judge Edward Davila of the Federal Court, Northern District of California, ruled that Elizabeth Holmes would not be able to remain free on bail while appealing her trial and sentence. In his 11-page ruling, he dismissed the defense claims that evidence around Theranos’ technology was not presented to the jury and affirmed that the key charges were related to financial fraud, the company’s financial status, and the false claim that the technology was validated by pharmaceutical companies. “Whether the jury heard more or... Continue Reading
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Digital health’s funding time machine dialed back to 2019–before the SVB implosion: Rock Health
...better bets. VCs sense the bottom hasn’t yet been found in digital health valuations. Payers like UHG and CVS are making big deals but not in digital health. If they are, they are small ‘pocket lint’ pickups. Private equity? Largely kicking tires. Family offices and high net worth individuals are generally staying out of the healthcare picture unless there are other compelling (usually personal) reasons to invest. (Theranos still hangs heavy over these last two funders.) Back to Rock Health, total Q1 funding was $3.4 billion across 132 deals. Yet only six mega deals (over $100 million) accounted for 40%... Continue Reading
Week-end update: Breaking–Theranos lab director suing Hulu, Disney for defamation; ‘green shoots’ for SonderMind, Cognito, Vital, MedArrive; 3 in Asia; Telstra Australia’s new CTO
Key Theranos prosecution witness suing Disney and Hulu for misrepresentation and defamation. It’s not only the FTC but also Adam Rosendorff, MD, the former lab director for Theranos who quit in late 2014, who is fighting against misrepresentation, in this case a fictionalized portrayal of the lab director character. l’affaire Theranos was lightly fictionalized in the docudrama ‘The Dropout” that ran on Hulu in 2022. Dr. Rosendorff is suing both Hulu, its corporate parent, Disney, plus other listed producers, in a New York State Supreme Court lawsuit (link and PDF) for defamation. The summons was filed in New York County... Continue Reading
Theranos update: Holmes, Balwani reprieved on surrender–for now–and Theranos’ creditors try to claw back $25M
Both Elizabeth Holmes and Sunny Balwani enter the final stages of legal actions before their respective trips to Club Fed and what used to be called the ‘rock pile’. Between late last week and today, one of Theranos’ late leaders got some additional days, weeks, perhaps a month of freedom, while the other is left hanging until April. Surprisingly, Theranos, the late company, is not actually dead as the proverbial doornail, at least as creditors are concerned–it’s as simple as ABC. Sunny Balwani’s surrender date, set for 2 pm PT Thursday 16 March, was delayed hours before his surrender when... Continue Reading
Did Theranos collapse because of Holmes’ criminal conduct? Holmes says no–and no to investors’ claims
Restitution–and Holmes’ ability to pay–may be similar to squeezing blood out of the rock at left. In the latest filing from Elizabeth Holmes’ defense, they claim that 1) her crimes didn’t cause the collapse of Theranos and 2) that the prosecution had not shown that the investors “relied on the offense conduct when deciding to invest.” Even Judge Edward Davila of the US District Court had said in a January ruling that 1) was not established by the prosecution. What the prosecution is trying to establish is that Holmes’ restitution should be in the vicinity of $878 million, up from... Continue Reading
Theranos’ Balwani seeks to remain free during appeal, argues he owes nothing in restitution (updated for Holmes appeal)
...appeals of Balwani’s boss and lover, Elizabeth Holmes, with her delay of surrender based on appeals being filed and restitution being decided in the same court. Balwani’s defense is taking a different tack than Holmes’ defense regarding restitution. His attorney, Amy Walsh, presented that the company was still valuable at the time of Balwani’s dismissal in May 2016. Theranos still had $350 million in cash and intellectual property worth $100 million. Judge Davila seemed skeptical of that: “Are you saying his conduct was completely divorced from Theranos’ demise?” The prosecution is seeking a far higher restitution–$900 million–than the $120 million... Continue Reading
Mid-week news roundup: CVS Health Virtual Primary Care launches, VA’s two-day Oracle Cerner EHR slowdown, and microsampling blood + wearables for multiple tests
...which shares a database with the VA, “had the unintended consequence of interrupting services that provide connectivity to the network.” The system slowed down from screen to screen, requiring clinicians to work extra time to make all entries, and was not resolved until configuration changes were made. This is another incident adding to a Very Large Dogpile, including interoperability between VA and MHS versions, 498 outages between September 2020 and June 2022, plus two veteran deaths. And maybe Stanford, forever associated with Theranos, is trying to get its reputation back–in running multiple blood tests on microsamples. A new paper published... Continue Reading
Theranos Holmes trial updates: did she book a one-way flight to Mexico last year, or were the prosecutors reckless and wrong?
The latest skirmish between prosecution and defense. Did Elizabeth Holmes book a flight to Mexico with the intent to flee–or not? According to the prosecution last week, Holmes in December 2021 had booked a one-way ticket to Mexico that was scheduled for the end of January 2022. The departure date was after her conviction in early January that year [TTA 4 Jan 22]. Moreover, the prosecution claims that now revealed fiancé Billy Evans flew not only to Mexico but also to South Africa, and was out of the country for weeks. The defense in its filing countered that Evans booked... Continue Reading
CVS, Walgreens, Walmart….Dollar General health clinics?
...either onsite or sent out. Medical staff on the van can write prescriptions. Some referrals (e.g. imaging) are done while other referrals are not available. As to their strategy, you have to hand it to Dollar General. They get some good press from this. They are starting small in working through the details, outsourcing the healthcare part, and seeing if there’s sufficient demand to 1) expand and if promising 2) model the customer demographics–what we marketers call customer personas. If it doesn’t work, no Theranos-sized holes in their budgets–it’ll be GoneGone to DocGo. Dollar General started to make moves into... Continue Reading
Weekend short takes: Theranos’ Holmes post-prison mental health + more on Shultz and Balwani; global M&A, funding roundup
...and readying a reentry plan draft that can make her probation a bit easier on all. In related Theranos news, a soon-to-be published biography of George Shultz, a government supremo during the Nixon and Reagan Administrations, claims that by then aged 90+ emeritus supported Holmes to the point of fixation. In a nearly 20-year tenure at Stanford’s Hoover Institution, respected and honored by all but with no medical expertise, he suddenly became a huge backer of Holmes, helped her get financing through his network of contacts, joined the board, and invited her to family gatherings. Grandson Tyler Shultz, who joined... Continue Reading
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