#ElizabethHolmes trial day 15.
Today's witness list:
1. New York Federal Reserve Deputy Chief Investigator Robert Amenta
2. Former Walgreens executive Nimesh Jhaveri
3. Former Theranos Lab Director Dr. Sunil Dhawan — who previously worked as a dermatologist
Today's witness list:
1. New York Federal Reserve Deputy Chief Investigator Robert Amenta
2. Former Walgreens executive Nimesh Jhaveri
3. Former Theranos Lab Director Dr. Sunil Dhawan — who previously worked as a dermatologist
"We're missing a juror," Judge Davila's clerk Adrianna Kratzmann said.
We don't usually meet Thursdays...But given the pace of the trial thus far Davila added an extra day.
#ElizabethHolmes #Theranos
#ElizabethHolmes #Theranos
Robert Amenta is back on the stand. Prosecutor John Bostic on for direct.
We are looking at a "Fedwire"
We are looking at a "Fedwire"
We just looked at six wire transfers with Amenta that were all sent to Theranos between 2013 and 2014, presumably from investors.
1. $99,990 from Alan Jay Eisenman
2.$5,349,900 from Black Diamond Ventures
3. $4,875,000 from Phoenix (something)
1. $99,990 from Alan Jay Eisenman
2.$5,349,900 from Black Diamond Ventures
3. $4,875,000 from Phoenix (something)
4. $38.3 million from Goldman Sachs and PFM healthcare
5. $99 million from Lakeshore capital
6. $5,999,997 From JP Morgan Chase & Mosely Family Holdings
5. $99 million from Lakeshore capital
6. $5,999,997 From JP Morgan Chase & Mosely Family Holdings
Then one Fedwire from 2015 which totaled $1,126,661 — government ended there. They did not establish that these were from investors.
Defense came out for a quick cross which hit on that point.
"You do not have any personal knowledge about why the wires were sent?" they asked.
Defense came out for a quick cross which hit on that point.
"You do not have any personal knowledge about why the wires were sent?" they asked.
Now on the stand Former Walgreens employee Nimesh Jhaveri.
He started in 1989 as a store clerk, became a pharmacist, and then worked in "various positions."
He started in 1989 as a store clerk, became a pharmacist, and then worked in "various positions."
In 2010 he became familiar with Theranos. He received a call from Dr. Jay Rosan, who asked him to give Holmes and Balwani a tour of a Walgreens store.
"It was a very short visit...they thanked me and that was the end of the visit."
"It was a very short visit...they thanked me and that was the end of the visit."
A few years later in 2013 Jhaveri said he reengaged with the Theranos team — his assignment was to determine how to fit the Theranos "service" as he said, into Walgreens stores.
"It's quite difficult to do construction in the store at a minute's notice," he said.
"It's quite difficult to do construction in the store at a minute's notice," he said.
Early in 2013 Jhaveri got a promotion: his new title was Divisional VP of Health Care Services/Health Care Development
#ElizabethHolmes
#ElizabethHolmes
Jhaveri used the words "amazing" and "extraordinary" to describe his initial understanding of the #Theranos technology.
We are looking at a slide deck from May, 2014 which was sent to the "diagnostic testing executive steering committee, created to keep executives "abreast on what's going on with the project," Jhaveri testified.
The Ppt was sent to Balwani — Holmes name was not listed.
The Ppt was sent to Balwani — Holmes name was not listed.
We are looking at the "Current Operations Metrics" slide of the Walgreens Ppt. which shows various data inc what % of their patients were having their blood drawn venously.
In 2/14: 43%
In 6/14: 39%
“The patients weren’t receiving the service they were promised,” said Jhaveri
In 2/14: 43%
In 6/14: 39%
“The patients weren’t receiving the service they were promised,” said Jhaveri
"The experience was no different than going to a traditional lab," he continued. "They were trying to get that number as close to zero as possible."
#ElizabethHolmes
#ElizabethHolmes
Balwani gave his estimates to Jhaveri of when they would ween off the venous draws.
They would be 20% reliant on venous draws by end of Aug. 2014
10% by the end of October
Done by the end of the 2014.
None of those estimates came to pass, Jhaveri testified.
10% by the end of October
Done by the end of the 2014.
None of those estimates came to pass, Jhaveri testified.
Balwani proposed an explanation, as the Ppt showed. He said that ordering patterns had been "different than anticipated."
"He always explained that they were learning about what was ordered," Jhaveri said,"And as they learned he would make sure his tech was ready to go."
"He always explained that they were learning about what was ordered," Jhaveri said,"And as they learned he would make sure his tech was ready to go."
Prosecutor Jeff Schenk asked him if Balwani ever explained there were technological problems with the Theranos machines.
"No," he said.
#ElizabethHolmes
"No," he said.
#ElizabethHolmes
Jhaveri also testified he believed the blood that was drawn in Walgreens stores was being tested on a Theranos device.
We looked at the minutes for a 5/28/2014 Theranos Partnership Meeting.
In it Jhaveri gave an update on the pilot project.
"Some things were moving in the right direction, some things were not," he testified.
In it Jhaveri gave an update on the pilot project.
"Some things were moving in the right direction, some things were not," he testified.
"No one was satisfied with the high percentage [of venous draws]," he testified. That included Mr. Balwani, who Jhaveri testified he spoke to on a "regular basis."
#ElizabethHolmes
#ElizabethHolmes
Schenk elicited again Jhaveri's understanding of where the finger stick draws where being tested. In May 2014 he still believed testing was being performed on a Theranos device.
He did not know if Theranos was using modified third party devices either.
He did not know if Theranos was using modified third party devices either.
Jhaveri testified he made decisions together with Balwani and Theranos.
Schenk pulled up an email from Jhaveri to Balwani and on Aug. 15, 2014 titled “Thoughts and Goals”
Jhaveri believed at this point the companies had made "unbelievable progress," as he wrote but that they needed to limit venous draws, if they were to expand nationally.
Jhaveri believed at this point the companies had made "unbelievable progress," as he wrote but that they needed to limit venous draws, if they were to expand nationally.
A week later Balwani wrote Jhaveri asking him how to proceed with Walgreens management in terms of expanding beyond 40 stores.
"We can't slow down our growth for obvious reasons," Balwani wrote.
"We can't slow down our growth for obvious reasons," Balwani wrote.
Jhaveri testified he spoke with Balwani about this and told him:
“We have to hit the metrics. We have to make sure the model is correct. And we have to be able to create the experience we set out to do."
#ElizabethHolmes #theranos
“We have to hit the metrics. We have to make sure the model is correct. And we have to be able to create the experience we set out to do."
#ElizabethHolmes #theranos
"Did Mr. Balwani ever explain to you technological obstacles to [limiting] venous draws?"
No, Jhaveri said, pointing out what he told us earlier about different ordering patterns of physicians, among other reasons.
No, Jhaveri said, pointing out what he told us earlier about different ordering patterns of physicians, among other reasons.
In Nov. 2014, venous draws (per store/per day) were still at 40%.
Did venous draws ever get to a point where you and Walgreens were satisfied?
No
Did venous draws ever get to a point where you and Walgreens were satisfied?
No
Schenk brought up this WSJ article published in Oct. 2015 — which Jhaveri said caused him and his company to "[take] a step back" and "simply [monitor]" the situation.
Jhaveri testified they removed Theranos tech from their stores entirely in 6/2016.
wsj.com/articles/thera…
Jhaveri testified they removed Theranos tech from their stores entirely in 6/2016.
wsj.com/articles/thera…
Schenk and Jhaveri are doing a live reading of #ElizabethHolmes and Sunny Balwani's texts in 2015.
Schenk is Holmes
Jhaveri is Balwani
The texts cover some behind the scenes strategizing about how to approach the Walgreens situation - hard to follow
Schenk is Holmes
Jhaveri is Balwani
The texts cover some behind the scenes strategizing about how to approach the Walgreens situation - hard to follow
One text Balwani sent Holmes in April 2015:
"We must hit our volume goals now. We need to make it a matter of life and death survival. We must not lose.”
"We must hit our volume goals now. We need to make it a matter of life and death survival. We must not lose.”
In another text Balwani said:
"Dignity wag (walgreens) everyone is posturing to walk away we r losing leverage fast."
"Dignity wag (walgreens) everyone is posturing to walk away we r losing leverage fast."
Lots of texts read, topped off by this question by Schenk to Jhaveri.
"At this time were you working diligently to operationalize Theranos blood testing [services] inside walgreens stores?"
#ElizabethHolmes
"At this time were you working diligently to operationalize Theranos blood testing [services] inside walgreens stores?"
#ElizabethHolmes
Be back in 20 minutes for cross.
The texts prosecutors ended with between Balwani and Holmes in regards to the WSJ article. (WAG = Walgreens) 
Defense attorney Kevin Downey is on for cross.
"Good late morning to you Mr. Jhaveri," he greeted the witness.
"Good late morning to you Mr. Jhaveri," he greeted the witness.
Start to Downey's cross:
You’ve worked in and around retail [stores] for decades right
It’s a hard thing to even open a dept in a retail store
It’s a hard thing to manage a store
And a hard thing to manage a dept in a store
Theres a lot to it
You’ve worked in and around retail [stores] for decades right
It’s a hard thing to even open a dept in a retail store
It’s a hard thing to manage a store
And a hard thing to manage a dept in a store
Theres a lot to it
And if the job is asked of you is to open 1500 stores in a year that is a very hard job
But if the senior management of your company asks you to do that that’s something you have to [accomplish]
But if the senior management of your company asks you to do that that’s something you have to [accomplish]
You had not played a role in any evaluation of the technology right
Correct
As far as you knew adequate due diligence was done
Correct
Correct
As far as you knew adequate due diligence was done
Correct
You were not involved in contact w/ Ms. Holmes?
I had very little contact w/ Ms. Holmes....I met with Ms Holmes maybe 2-3 times at most
I had very little contact w/ Ms. Holmes....I met with Ms Holmes maybe 2-3 times at most
Downey brings up Jhaveri's knowledge of venous draws.
The attorney clarified there are actually three types of blood draws: finger stick, venous, micro sample.
That micro samples are considered venous draws.
(A possible explanation for why the venous draw % was so high)
The attorney clarified there are actually three types of blood draws: finger stick, venous, micro sample.
That micro samples are considered venous draws.
(A possible explanation for why the venous draw % was so high)
We are looking at a "partner framework" document that was sent in an email between Miquelon and Holmes on 9/5/2013
"Walgreens is willing to commit to developing Theranos lab services at 1500 locations within the first 12 months..." it says.
The same # downey began with
"Walgreens is willing to commit to developing Theranos lab services at 1500 locations within the first 12 months..." it says.
The same # downey began with
Recall Downey had asked,"If the job is asked of you is to open 1500 stores in a year that's a very hard job."
Downey followed up:
"This commitment was a huge commitment on the part of Walgreens."
He asked who was working on that commitment for WAG
Dr. Jay Rosan (& others)
Downey followed up:
"This commitment was a huge commitment on the part of Walgreens."
He asked who was working on that commitment for WAG
Dr. Jay Rosan (& others)
We went over a late 2013 contract between Theranos and Walgreens which detailed the plan for a national rollout.
Downey's line:
"Theranos never had any experience," he said with launch of this scale
"Walgreens had significant experience," Downey continued
Downey's line:
"Theranos never had any experience," he said with launch of this scale
"Walgreens had significant experience," Downey continued
By Sept. 1, 2016 the plan was to expand to 2500 stores nationwide.
By Aug. 1, 2014 the plan was to roll out diagnostic testing services to 40 stores.
The latter of which, Jhaveri mentioned was his project.
By Aug. 1, 2014 the plan was to roll out diagnostic testing services to 40 stores.
The latter of which, Jhaveri mentioned was his project.
On direct Schenk took Jhaveri through objectives Theranos & Walgreens failed to meet.
On cross Downey brought up 1 goal the companies met and exceeded
Jhaveri testified their goal was to have 5 patients/store/day in 2014 and 2015
They ended up with 5.5 (in one of the years)
On cross Downey brought up 1 goal the companies met and exceeded
Jhaveri testified their goal was to have 5 patients/store/day in 2014 and 2015
They ended up with 5.5 (in one of the years)
We are looking at an Internal Walgreens document which is titled “Key Program Risks”
The first says "1)Theranos devices and tests obtain regulatory approvals."
The first says "1)Theranos devices and tests obtain regulatory approvals."
"Some of those approvals were obtained before your [involvement]" he asked
"But you understood #Theranos was still seeking approvals from the FDA on others," he asked, of the time when Jhaveri was involved with the partnership
"But you understood #Theranos was still seeking approvals from the FDA on others," he asked, of the time when Jhaveri was involved with the partnership
In mid-April Jhaveri wrote his Walgreens colleagues to celebrate the expansion of theranos wellness centers into 8 new stores.
Below his note he wrote: "what you can't say"
-Future market expansions plans outside our northern CA or phoenix market.
Below his note he wrote: "what you can't say"
-Future market expansions plans outside our northern CA or phoenix market.
"Only mention our relationship that the companies plan to offer the service at Walgreens locations nationwide," he continued, as Downey highlighted.
#ElizabethHolmes
#ElizabethHolmes
(To clarify this email was sent in April, 2014)
“Theranos experience survey summary results are off the charts,” the notes indicate, as Downey highlighted.
Downey asked if that reflected satisfaction within the Walgreens stores at that time (Aug. 2014)
Downey asked if that reflected satisfaction within the Walgreens stores at that time (Aug. 2014)
On direct Jhaveri said limiting venous draw % in addition to great CUSTOMER EXPERIENCE were the metrics that had to be met for there to be a national rollout.
The last line seemed to address that latter criteria.
#ElizabethHolmes
The last line seemed to address that latter criteria.
#ElizabethHolmes
More on patient experience:
"did you get a lot of feedback that the patients were concerned about the form of the blood draw?" the defense atty asked
"I don't remember anything specific to me...where the patient stated anything about a draw," Jhaveri replied
"did you get a lot of feedback that the patients were concerned about the form of the blood draw?" the defense atty asked
"I don't remember anything specific to me...where the patient stated anything about a draw," Jhaveri replied
Downey pulled up at a Jan. 15 table titled "Theranos Experience Survey Summary
It shows overall experience: 4.81 (out of 5)
"These were pretty good for a new venture?"
"Very good," Jhaveri replied
Downey hammered in his point, showing 0.3% said they would not return
It shows overall experience: 4.81 (out of 5)
"These were pretty good for a new venture?"
"Very good," Jhaveri replied
Downey hammered in his point, showing 0.3% said they would not return
“We will start with the bad news first," Downey said, perhaps borrowing from Prosecutor Robert Leach's shtick.
Leach would ask former Theranos Lab employees (turned witnesses) if faulty data was "good news" or
"bad news."
Leach would ask former Theranos Lab employees (turned witnesses) if faulty data was "good news" or
"bad news."
“here’s what people are complaining about” — the slide read (in the same deck as the Jan 2015 table)
Complaints mostly surrounded long lines / difficulty checking in
The "good news" on the other hand, as Downey highlighted:
“Theranos is much better than Quest diagnostics”
Complaints mostly surrounded long lines / difficulty checking in
The "good news" on the other hand, as Downey highlighted:
“Theranos is much better than Quest diagnostics”
Another possible explanation for high venous %:
If a patient who needed "10-11 aspects of their blood tested," and one of the aspects required a venous draw then all tests would be run with a venous draw, Jhaveri testified.
#ElizabethHolmes
If a patient who needed "10-11 aspects of their blood tested," and one of the aspects required a venous draw then all tests would be run with a venous draw, Jhaveri testified.
#ElizabethHolmes
Walgreens made that decision he said, so as to streamline the patient's experience.
Downey established on cross that today Walgreens does have some blood testing in their stores today. And it's venous.
Walgreens made the decision to open facilities in their stores that were strictly venous (post-theranos), Downey said.
#ElizabethHolmes
Walgreens made the decision to open facilities in their stores that were strictly venous (post-theranos), Downey said.
#ElizabethHolmes
On occasion you emailed with Ms. Holmes right?
Downey pulled up the email — exhibit 7454
#ElizabethHolmes
Downey pulled up the email — exhibit 7454
#ElizabethHolmes
It's the Fortune front page story — sent to Jhaveri by Sunny Balwani.
Jhaveri forwarded it to Holmes with this message:
"This is great -- congratulations! I want an autographed copy!" he wrote.
Jhaveri forwarded it to Holmes with this message:
"This is great -- congratulations! I want an autographed copy!" he wrote.
Downey wrapped his cross with one final email from Jhaveri to Holmes dated 9/6/2014.
The defense attorney pointed out it was written shortly after the meeting which Walgreens had indicated they would be scaling down the expansion of Theranos stores.
The defense attorney pointed out it was written shortly after the meeting which Walgreens had indicated they would be scaling down the expansion of Theranos stores.
“As you know we are making great progress in our partnership,” Jhaveri wrote.
We'll be back for redirect after a short break.
#ElizabethHolmes #Theranos
We'll be back for redirect after a short break.
#ElizabethHolmes #Theranos
Schenk is on for redirect. He brings up a meeting with Ms. Holmes — a "demonstration" he says
"We went to get our blood tested. We went into the room next door and they did a finger stick on us... they also had a black machine on a table," he testified.
Schenk clarified the positive survey results — which Downey showed on cross.
"The results were not available to the patient at the time of the survey," Jhaveri testified.
#ElizabethHolmes
"The results were not available to the patient at the time of the survey," Jhaveri testified.
#ElizabethHolmes
Furthermore — regarding the slide Downey had shown Jhaveri listing positive customer reviews about the Theranos Walgreens testing experience (the "good news") — the witness testified the slide was prepared by Theranos.
"Were you still acting under the assumption that Holmes had been honest with you..." Schenk asked Jhaveri about the congratulatory email he sent to #ElizabethHolmes after seeing her Fortune front page.
"Yes," he replied.
"Yes," he replied.
Back to Downey for brief recross. He elicited that often Jhaveri got his own blood drawn, sometimes finger stick sometimes venous.
"I wanted to experience what a patient would experience," he testified.
"And your personal experience... was positive right?"
He agreed.
"I wanted to experience what a patient would experience," he testified.
"And your personal experience... was positive right?"
He agreed.
Jhaveri is dismissed #ElizabethHolmes
"The United States Calls Dr. Sunil Dhawan"
The ex-Theranos Lab Director and former dermatologist.
#ElizabethHolmes
The ex-Theranos Lab Director and former dermatologist.
#ElizabethHolmes
Right off the bat Schenk asked Dhawan what he currently does.
Dermatology.
He's been doing it for 32 years, he said.
Dermatology.
He's been doing it for 32 years, he said.
He also does, clinical trial practice for large and small drug companies and device companies
At a certain point Balwani asked if Dhawan would take on the role as lab director, for a limited length of time Dhawan clarified.
Dhawan was "led to believe" the previous lab director had left. He was not told much of the circumstances, he testified.
Dr. Dhawan is a soft spoken bald man with thin frames. Many of his sentences trail off.
#ElizabethHolmes
#ElizabethHolmes
Dhawan was offered a contract: his salary would be 5k per month. The doctor inquired about stock options.
Dhawan testified he only worked 5-10 TOTAL hours at #Theranos between Nov 2014 to June/July 2015
#elizabethholmes
#elizabethholmes
The QC Manager Langly Gee — who Dr. Rosendorff tesitified to interacting with often — introduced himself to Dhawan in Aug 2015.
Many months after Dhawan signed on as lab director.
Many months after Dhawan signed on as lab director.
“I also need your help on an additional matter," Balwani wrote to Dhawan in Sept. 2015.
"We have a [CMS] lab audit coming up on 9/22 at 9am (these happen once every two years) And wanted to see if you could be present, at least for the first part of it.”
"We have a [CMS] lab audit coming up on 9/22 at 9am (these happen once every two years) And wanted to see if you could be present, at least for the first part of it.”
on 9/14 (8 days before the audit) Balwani emailed Dr. Dhawan:
"I need couple of hours from you this coming weekend unfortunately I have close to 300 SOPs that need signing," Balwani wrote.
"I need couple of hours from you this coming weekend unfortunately I have close to 300 SOPs that need signing," Balwani wrote.
Schenk showed Dhawan 59 validation reports.
The former dermatologist / #Theranos Lab director signed 58 of them on 9/19/2015 — 3 days before the audit Balwani brought up, Dhawan testified.
The former dermatologist / #Theranos Lab director signed 58 of them on 9/19/2015 — 3 days before the audit Balwani brought up, Dhawan testified.
"I was never shown the Edison Device running an assay," Dhawan testified.
He said he spent hours reviewing the validation reports, however.
He said he spent hours reviewing the validation reports, however.
In the capacity of a lab director, Dr. Dhawan signed an Standard Operating Procedure relating to "critical values."
He told Schenk during his time at #Theranos he never once "was given any critical values to look at."
He told Schenk during his time at #Theranos he never once "was given any critical values to look at."
The first time he met #ElizabethHolmes was in Sept. 2015.
He met her briefly in the #Theranos hallway on Sept. 22, 2015. On the first day of the CMS inspection.
He testified inspectors didn't ask him any questions.
He testified inspectors didn't ask him any questions.
Schenk is showing texts between Holmes and Balwani during the inspection on 9/22 - 9/23
"Praying," Holmes wrote to Balwani at least twice during the exchange.
#ElizabethHolmes
"Praying," Holmes wrote to Balwani at least twice during the exchange.
#ElizabethHolmes
Here are some of the texts:
Theranos general counsel sent Sunil Dhawan an email on 7/9/2016
Subject: CMS Notice on Imposition of Sanctions
It was the first he'd heard of what Schenk referred to as "challenges."
Subject: CMS Notice on Imposition of Sanctions
It was the first he'd heard of what Schenk referred to as "challenges."
Dhawan believes he left Theranos in Oct. 2015 — a month after the inspection, Schenk noted.
He wrapped there.
Lance Wade who crossed the last lab director is in for the defense.
He wrapped there.
Lance Wade who crossed the last lab director is in for the defense.
"Is it fair to say you are a highly trained professional?" Wade started, asking Dhawan to run through his training.
He told Wade he has an MD, has done an internal medicine and dermatology residency
He told Wade he has an MD, has done an internal medicine and dermatology residency
Dhawan testified his only true interaction with Ms. Holmes was saying hello.
Dhawan assumed Balwani was in charge of operations of the lab, Wade elicited.
Dhawan assumed Balwani was in charge of operations of the lab, Wade elicited.
We looked at an email between a Theranos regulatory atty and Dhawan, in which the atty was asking the doctor for his documents for the purpose of meeting certain regulatory requirements.
That's it for today — Dhawan will be back on the stand tomorrow at 9 a.m for the rest of Wade's cross.
#ElizabethHolmes
#ElizabethHolmes
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