Thread by @MilesGCohen

#ElizabethHolmes trial day 22:

The water is back on in the courthouse.

Defense attorneys Kevin Downey and Lance Wade are sporting fresh cuts.

Pretrial matters first, and then DeVos family investment manager Lisa Peterson will return to the stand.

Today's witness list:

1. Lisa Peterson -- last week testified to a $100 billion investment by the DeVos fam

2. Dr. Cullen -- "a brief witness"

3. Daniel Mosley -- Investor / partner Cravath Swaine and Moore. (Dr. Henry Kissinger was his client, Wade said)

#ElizabethHolmes

@FortuneMagazine writer Roger Parloff will testify next week at the earliest, Prosecutor John Bostic revealed.

This was his front page piece on then burgeoning #ElizabethHolmes:

fortune.com/2014/06/12/the…

Lisa Peterson is on the stand. She's under Lance Wade's cross examination.

Moment of levity:

Wade unsuccessfully tried to refresh Peterson's recollection with a doc

Prosecutor told judge that was an improper refreshing

"Anything can be used to refresh a witness's recollection: a shoe, a sock," judge said

"I'll keep my shoes on your honor" Wade said

On 9/30/2014, Peterson wrote a colleague to express interest in accompanying the RDV CEO to Theranos.

“If you hear more about Jerry [CEO of RDV Corp] going to Palo Alto, I would love to tag along at least one-way," Peterson wrote.

Last week we heard about a memo Peterson prepared for her higher-ups who ultimately made the investment decision in #Theranos.

She testified she based her memo on a slide deck sent to RDV by theranos and a phone call w/ Holmes.

Wade is going through the slide deck.

"Are you aware of any statement at all [in your memo] that came from the slide deck?" Wade opened.

"Not at the moment, no," Peterson replied, but testified she based her memo off the entirety of the binder and the phone call.

Peterson is going off on many unsolicited tangents / explanations.

"Move to strike," Wade has said at least four times this morning.

All granted.

Wade pulled up the "Angiogenesis Study Report" — the one with the Pfizer logo emblazoned on its upper right corner.

She had testified on direct she believed Pfizer prepared the doc.

He tried to refresh Peterson on a statement she had made to the government in 2017 about not knowing who prepared the report.

He drew Peterson's attention to "theranos.com," and Theranos' address written at the bottom of each of the study's pages, as provided to RDV

“[Jerry Tubergen] informed me that we were in, which meant [#ElizabethHolmes] had accepted us into the deal. We still had to close it,” Peterson testified of Oct. 20, 2014.

She sent her memo to her higher-ups on Oct. 23.

Wade projected a clause from Peterson's memo next to one from the Fortune Mag article re FDA approval

"Isn’t it the case you took this language directly out of the fortune article," he asked.

"It may have," she testified, adding her team got the same info from Holmes.

The clause (from Fortune):

"Theranos, which does not buy any analyzers from 3rd parties, is therefore in a unique position. While it would need FDA approval to sell its own analyzers to other labs, it doesn’t do that... All its tests are...effectively exempt from FDA oversight"

Wade ended his cross by naming those who actually made the final investment decision — notably not Peterson, as the defense attorney had emphasized before she took the stand.

Prosecutor Robert Leach is on for redirect.

Leach asked Peterson if she "in any way dream[ed]" that Theranos's revenue would be 0 in (2014? - didn't hear) and less than 500k in 2015

"No," she said.

Leach also ran through the slide deck with Peterson.

“Theranos proprietary, patented tech RUNS comprehensive blood tests from a finger-stick and tests micro-samples of other matrices," one bullet read.

Peterson understood from the language, this was their current capacity.

"Did the idea of venous draws ever come up with your convos with Ms. Holmes?" Wade asked.

"No," Peterson replied.

Proceedings were interrupted by a man in the courtroom who admitted to taking a photograph.

Judge Edward J. Davila called him up to the front of the audience to question and admonish him. Respectfully.

We're back after a brief break

Leach asked Peterson what RDV Corp. was.

"Thats the group that I work for," she said.

"So it's the group that includes you," he replied.

"Yes," she said.

Attorneys are in Davila's chambers debating the admissibility of an Oct. 2014 email.

And..the objection is sustained. The email will not get in.

Leach ends his redirect, and Wade comes on for a brief recross.

Dr. Constance Cullen is the government's next witness.

Cullen worked for a company which worked with Theranos in 2009.

Dr. Cullen worked for Schering-Plough, a pharmaceutical company, since acquired by Merck.

Her lab was responsible for development and validation of assays for biomarkers

Her company was interested in #Theranos technology because it could potentially "facilitate and expedite the testing of drugs in non-clinical trials," Cullen testified.

Her boss tasked her with evaluating the technology.

Cullen and her team were provided with "two instruments" from #Theranos.

She also visited the Theranos facility.

AUSA Jeff Schenk pulled up a protocol titled: Theranos System Full Validation Protocol: (hs)CRP,IL-6,TNF-a multiplex

(hs)CRP,IL-6,TNF-a multiplex -- are assays, she testified.

The evaluation happened at #Theranos. (Separate from the two devices provided to Schering-Plough)

In the protocol we see a section titled "Payment Terms"

$279,000

Money Schering-Plough would pay to Theranos to “cover the costs of the validation of those three analytes,”Cullen testified.

We are hearing about a May 5, 2009 due diligence visit by members of Schering-Plough including Cullen to Theranos.

Amongst their intentions:

"understanding more of the technical details w/ respect to multiplexing (measuring multiple analytes simultaneously)"

At the meeting Cullen met #ElizabethHolmes for the first time. She had several technical questions, she testified.

"Almost exclusively Ms. Holmes would answer the questions, irrespectively of who the question was addressed to," Cullen told Schenk.

"I was dissatisfied quite honestly," she continued, citing "insufficient technical detail for us to be able to evaluate the technology."

#ElizabethHolmes

She also described the CEO's responses as "Cagey” and “attempts to redirect to other topics of discussion.”

We just looked at a validation report Theranos' Gary Frenzel sent to Cullen in December with data and conclusions compiled by Theranos, Cullen testified.

One conclusion in the report says that the assays have "been shown to give accurate and precise results."

Is that a conclusion that you reached?

No.

Is that a conclusion that anyone else at Schering-Plough reached?

No.

"please find three independent due diligence reports," Holmes wrote in a 2014 email to Walgreens, as Schenk showed.

Attached is what appears to be the same validation report, but w/ the addition of the Schering-Plough logo.

Schenk projected the conclusions side by side.

Defense attorney John Cline is on for cross.

Cline admits an email from 11/2008 from Holmes to Cullen

"We have attached several reports from programs we have done w/ other pharmaceutical companies."

Cullen testified she looked through the reports.

Cline showed another email in the chain where Cullen asked Holmes and two other Theranos employees (CC'd) for validation results.

“I was wondering if you could provide your validation reports on any of these assays," the doctor wrote.

Cline highlighted the response from one of those employees, Carolyn Balkenhol, who replied to the email with four attachments.

Cline is going through the "services agreement" between Theranos and Schering-Plough governing the validation project.

Signed April 29, 2009, as Cline points out.

The expected start date of the project was May 1, 2009, documents showed.

Days before Cullen's trip to Theranos, Cline elicited.

May 5, 2009 = the day of the visit.

We are looking at the agenda of the meeting.

Of the 7 Schering-Plough attendees, all either had Ph.D's or were medical doctors, Cullen testified, as Cline asked.

^contextualizing Cullen's concerns about lack of technical information

In March 2010, Holmes wrote Dr. Cullen

"Follow Up"

"Carolyn, let me know you two connected," she wrote congratulating the doctor on a promotion.

"I've asked a scientist from my group (Don Lee) to reach out to Gary [Frenzel] to discuss the specifics of the validation," Cullen wrote back.

That was "probably" the last correspondence she had with Holmes, Cline elicited

That's all — Cullen dismissed. We're standing and stretching while the government goes to collect their next witness.

It's Daniel Mosley.

#ElizabethHolmes

In 2013 Mosley invested in Theranos.

"Just a little under $6 million," he testified.

#ElizabethHolmes

Mosley practiced trusts and estates at Cravath Swaine and Moore where he gained expertise with corporate documents, he testified.

He first became familiar with Theranos in July 2014 through his client Dr. Henry Kissinger.

Kissinger had been his client for almost 20 years, he testified.

Kissinger was on the #Theranos board, and told him it would be "terrific" if Mosley got involved.

The former Secretary of State offered to put him in touch with #elizabethholmes

We are looking at a July 22, 2014 email from Mosley to Holmes. A follow up from a call the day before.

"Once I receive the Private Placement Memorandum, I will give you a call"

A PPM -- "lays out a lot of information about the company," Mosley testified

Kissinger wanted to "get to know the company, give me your views on it," Mosley testified.

"[Elizabeth Holmes] was looking for investors that were high quality families," Mosley said.

We are looking at an Aug, 18, 2014 cover letter which Holmes sent to Mosley in paper, with "at least three inches" of material, he testified.

"I founded this company to make a difference in the world," Holmes wrote towards the beginning of the letter.

"Historically, Theranos' work was focused on contracts with pharmaceutical and military clients," Holmes wrote in the letter.

"Theranos has grown from cash from its contracts for some time," she continued

"W/ this letter and as promised on our call, I would like to formally extend... the invitation to participate in this equity transaction to whatever extent you are interested."

(schenk highlighted)

At a point in his vetting of the company for Kissinger, Mosley became interested. He was excited by the company's prospects.