Theranos, The Trial of Elizabeth Holmes: ch. 1

“The company believed more about PR and fundraising than about patient care”, from Tuesday’s testimony by former lab director Adam Rosendorff, could be the prosecution’s strategy in the proverbial nutshell. Mr. Rosendorff, who quit in November 2014 after a long struggle to get Ms. Holmes and Theranos management to address persistent problems in patient lab results and to implement a legally required verification process, was a witness for the prosecution. The defense tried to paint his testimony in cross-examination as inconsistent and self-serving in accounts of Ms. Holmes’ state in hearing concerns about three particular blood tests, the launch date of public blood tests, proficiency tests versus ‘precision tests’, when the California Department of Public Health audited the lab, and exactly why he quit Theranos 18 months after hire. The questioning twice grew so heated that District Circuit Court Judge Edward Davila deemed it inappropriately argumentative. One example from Lance Wade to Mr. Rosendorff was that supervising quality control tests and making sure laws were followed was “why you get the big bucks, right?” “Not as big bucks as you get paid,” Mr. Rosendorff replied. Mr. Rosendorff did get caught up in an email trail and on narrowing the proficiency testing to FDA-approved devices versus the Edison labs. The cross and the bickering went on into Friday and probably will resume on Tuesday next week (@doratki).

Also on Tuesday was brief testimony from Celgene manager Victoria Sung, who drew a picture of more Theranos fabrications around how pharmaceutical companies (Celgene owned by Bristol Myers-Squibb) had not  “comprehensively validated” Theranos technology. 2012 results showed that Theranos labs performed “out of range” versus standard tests, and other tests were not run. Last week, Theranos employee Surekha Gangakhedkar in her testimony stated that she did not think GSK’s report validated Theranos’ tests. Mercury News, The Verge

Today, John Carreyrou, who broke la scandale Theranos in The Wall Street Journal and authored the book Bad Blood, filed a motion to stop being barred from court. Cleverly, La Holmes’ defense put him on the witness list but not subpoenaed him. Being on the witness list, however, means he cannot attend any part of the trial or publicly discuss his testimony, if given, without permission from Judge Davila. “Placing Carreyrou on the witness list was done in bad faith and was designed to harass him,” the motion claimed, calling his placement on the list “a cynical ruse” that violates the First Amendment. Also cited in the motion were the company chant about him and various text messages between Ms. Holmes and Sunny Balwani. Mercury News  Mr. Carreyrou and six years before the Theranos mast, interviewed in The Verge in an interview that diverges fascinatingly into the psychiatric drives of the players….

And earlier in September (Wednesday 22nd), General James Mattis, Ret. testified about how he initially wanted to pilot the Theranos labs on ships and remote locations, where space and swiftness are at a premium. The Verge article does take liberties in the psychology between the two (bachelor general, young female CEO), including his joining the board after retirement, sticking around despite his growing doubts until he was named secretary of defense in 2016. The defense drew out that he was confused about his compensation package ($150,000 per year plus a stock option purchase).

The Mercury News (which has a minimum of free articles before the paywall goes up, the WSJ (paywalled), local TV KRON4, The Verge, and CNBC have been covering the past weeks of the trial. Dorothy Atkins of @Law360 is also tweeting in real time on it (@doratki).

To be continued….

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