...time. This reinforces the defense opening back in September that relying on Balwani as president was one of her mistakes. Validation? Adam Rosendorff, a former lab director, was less than competent [TTA 6 Oct] Not disclosing about using third-party devices? A ‘trade secret’ recommended by legal counsel. And the marketing/PR claim about Theranos using only ‘a single drop of blood’? (And all that ‘passionate intensity’ Holmes exhibited at investor conferences and interviews?) Blame TBWA/Chiat/Day, the ad agency! And Patrick O’Neill, who went from executive creative director there to creative director of Theranos and prepped her for the press including her... Continue Reading
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Theranos, The Trial of Elizabeth Holmes, ch. 10: Holmes testifies about the salad days of Theranos, setting up cognitive dissonance
...Pfizer and Schering-Plough, for instance, was later. But every single drug company approached for the preliminary studies in those early days, including AstraZeneca at London’s Royal Marsden Hospital, never followed through with Theranos for more, such as a clinical trial or advanced study. Whether Holmes knew from an employee that Constance Cullen of Schering-Plough was less than enthusiastic about Theranos and found Holmes ‘cagey’ is beside the point, when the company later forged the Schering-Plough logo on a report to make it look as if Schering found Theranos’ labs acceptable. Downey took some care with Holmes not to introduce the... Continue Reading
Theranos, The Trial of Elizabeth Holmes, ch. 9: the cold $96 million (updated 19 Nov)
On which may well hang how many years Elizabeth Holmes spends in prison. Yesterday’s testimony by Brian Grossman, chief investment officer at PFM Health Sciences, may be the prosecution coup de grace in drawing a picture in bold colors, no pale pastels, of deliberate deception and fraud. Previous testimony spun tales of family offices and highly wealthy individuals such as Rupert Murdoch (and not so wealthy such as Alan Eisenman) being easily lulled by the Social Network spinning. They were gulled by the whiz-bang technology–Elizabeth Holmes’ and Sunny Balwani’s nanotainers, miniature Edison labs–as well as their fake claims of Theranos... Continue Reading
Theranos, The Trial of Elizabeth Holmes, ch. 8: choosing investors with more money than sense a winning strategy
...he didn’t have enough information on what was apparently a ‘liquidity event’. Lack of information was a persistent red flag, with gaps in communication from 2010 to 2012 and a contentious relationship with Sunny Balwani. Despite this, when Theranos needed money in 2013, he then invested an additional $100,000 despite no audited statements since 2009. This last investment became one of the government’s counts of wire fraud. In his testimony, Eisenman testified that like others, he was initially impressed that Oracle founder Larry Ellison was involved with the company and that Theranos had contracts with six international pharmaceutical companies including... Continue Reading
Theranos, The Trial of Elizabeth Holmes, ch. 7: Edison labs consistent–in deficiency and strange results
...2015, but never came to the Theranos site. It seems that her main duties were signing off remotely on documents using Docusign and backing up then-lab director Dr. Sunil Dhawan, Balwani’s dermatologist who came to the lab a handful of times. Even more amazingly, she was unaware of Theranos’ signature ‘nanotainers’ and the backup use of third-party devices. After her six-month contract was up, she departed, uncomfortable with Theranos’ procedures. Kicking off the day was Judge Davila’s regular admonition to those in the public section of the courtroom to type vewy, vewy quietly. Then the video display for exhibits broke... Continue Reading
Theranos, The Trial of Elizabeth Holmes, ch. 6: the decision maker was Holmes–and she was ‘cagey’
Judge Davila is speeding up the trial, adding hours and days–perhaps because the damning testimony has become depressingly similar. Were the investors sloppy, or did Theranos–and Holmes–deliberately deceive? Maybe…both. Documents and slideshows from Theranos glowed. The company faked memos and reports from both Pfizer and Schering-Plough, which was in the process of being acquired by Merck. Schering-Plough’s Constance Cullen said she found CEO Elizabeth Holmes’ answers to technical questions “cagey” and she was blocked by Holmes from asking questions of other Theranos employees. Presentations describing the Theranos lab capabilities were written in present, not future, tense. Example from the prosecution... Continue Reading
Theranos, The Trial of Elizabeth Holmes, ch. 5: how to easily fool rich people and their investment offices
...investments for RDV Corp., the DeVos family office. Ms. Peterson, who wouldn’t have the job if she weren’t decently savvy, drew a picture for the prosecution of being consistently lied to by Ms. Holmes and Theranos executives before committing to a $99 million investment through its legal entity Dynasty Financial II, LLC on 31 October 2014: Holmes and Balwani showed financial projections of $140 million in revenue in 2014 and $990 million in 2015. Peterson testified she did not know that both 2012 and 2013 had zero revenue–a real lapse on her part, in this Editor’s view Theranos claimed validation... Continue Reading
Theranos, The Trial of Elizabeth Holmes, ch. 4: we deceive those who want to believe
The Theranos Cave apparently has no bottom. Reportedly at the halfway mark, Tuesday’s trial focused on the testimony of former Theranos product manager Daniel Edlin. Recommended by his college friend Christian Holmes in 2011, he soon stepped into frontline work, assembling presentations sent to investors such as Rupert Murdoch, conducting VIP tours with demonstrations of the Edison labs, coordinating with the press, and with Elizabeth Holmes, plumping for Department of Defense and pharmaceutical company business. According to Mr. Edlin’s testimony, Theranos executives and staff staged demos and blood tests for investors and VIPs. Sometimes the blood tests worked fine, sometimes... Continue Reading
Theranos, The Trial of Elizabeth Holmes, ch. 3: Safeway, Walgreens execs testify to deception, frustration with Holmes, failed pilots and labs (updated)
...lab devices, negotiating preferred network status with commercial health plans, and a network of partners. Most of all, Safeway negotiated the right to terminate the agreement if the pilot failed and Theranos did not obtain FDA clearance. On the redirect, the government maintains that Theranos started in 2003 and purported to be making money (!!). Up next for the prosecution was Wade Miquelon, former CFO of Walgreens. Walgreens was the only Theranos partner to put Theranos centers in their store. He testified to the presentation he received in 2010 which was similar to those received by investors. It included claims... Continue Reading
Theranos, The Trial of Elizabeth Holmes, ch. 2: the lab director’s contradictions, competence questioned
...common than what usually sees in … some labs with high volume” and, even more specifically, that “I don’t think I had a greater number of tests that were anomalous that I had to review at Theranos than at other places I’ve been like University of Pittsburgh.” Dr. Rosendorff, according to reports, kept commenting on his earlier testimony to reinforce that decisions made at Theranos were ‘not good solutions’, no matter what he believed or how he acted at the time. Mr. Wade tried to have these comments struck from the record, but Judge Davila ruled that both should move... Continue Reading
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