#ElizabethHolmes day 33:
Holmes will return to the stand for what could be her last day of direct examination.
Next week, prosecutors are likely to get their shot at asking her Qs
New episode #TheDropout. Hear about the moment Holmes took the stand:
open.spotify.com/episode/4OOuQp…
Holmes will return to the stand for what could be her last day of direct examination.
Next week, prosecutors are likely to get their shot at asking her Qs
New episode #TheDropout. Hear about the moment Holmes took the stand:
open.spotify.com/episode/4OOuQp…
it's still dark lol. I showed up at 4 a.m. and got #20 in line. 
In the gates! @Emily_Saul_ keeping order
No delays today: Holmes takes the stand right at 9 a.m.
Today two jurors looked at Holmes as they passed the stand, and took their seats at the jury box.
“Good morning Ms. Holmes” Kevin Downey said.
Topic: Pfizer and Dr. Shane Weber, an earlier witness
Holmes testified she only had two phone convos with Weber Nov. 2008 and Jan 2009, and that Weber was not involved in any of the comms she had w/ Pfizer after and up until 2015
Topic: Pfizer and Dr. Shane Weber, an earlier witness
Holmes testified she only had two phone convos with Weber Nov. 2008 and Jan 2009, and that Weber was not involved in any of the comms she had w/ Pfizer after and up until 2015
And again to Dr. Ian Gibbons and the 4.0
She sent Gibbons an email in Feb 2010 with a list of tests.
“The attached presents my analysis of how the analyses you listed would be measured in System 4.0 essentially all are possible in the proposed system," he wrote back.
She sent Gibbons an email in Feb 2010 with a list of tests.
“The attached presents my analysis of how the analyses you listed would be measured in System 4.0 essentially all are possible in the proposed system," he wrote back.
Holmes understood that response to mean “That these tests could be run in that system,” she testified
He also gave some caveats in reference to specific tests, Downey noted.
"I read [those] to mean... that he was highlighting there was a solution for how those cold be run."
He also gave some caveats in reference to specific tests, Downey noted.
"I read [those] to mean... that he was highlighting there was a solution for how those cold be run."
Holmes wrote scientists' Ian Gibbons, Daniel Young, Gary Frenzel, and Surekha Gangakhedkar on 10/19/2010 w/ regard to pharma company GSK. She had three questions, of them:
"Why and how our platform will be capable of the full range of assays..." she wrote.
"Why and how our platform will be capable of the full range of assays..." she wrote.
She also asked about cost savings.
Gibbons replied:
“I think we have demonstrated capabilities fully equivalent to lab methods in areas where we have done assay development. Our immunoassays match the best that can be done in clinical labs and work with small blood samples," he wrote.
“I think we have demonstrated capabilities fully equivalent to lab methods in areas where we have done assay development. Our immunoassays match the best that can be done in clinical labs and work with small blood samples," he wrote.
"Generally our assays are faster by a factor of three to ten than kits," he continued
Theranos was about 6-years-old at the time, Holmes testified.
Theranos was about 6-years-old at the time, Holmes testified.
“Cost savings will accrue from small sample size and no blood draw requirement," Gibbons also said, in response to Holmes question.
"I wanted to understand what the scientists were talking about when they were giving those statements," Holmes testified, about why she posed the questions re the 4.0
Holmes said her scientists told her Theranos could run any test on the 4.0.
"Our scientists had said that, so I just wanted to better understand that statement," she told Downey
"Our scientists had said that, so I just wanted to better understand that statement," she told Downey
Holmes testified she had a lot of conversations with the board of directors about the development of the system 4.0.
Including:
Don Lucas (first chairman and investor)
Pete Thomas (investor who holmes shared a Pfizer contact with)
Dr. Channing Robertson (stanford prof)
Including:
Don Lucas (first chairman and investor)
Pete Thomas (investor who holmes shared a Pfizer contact with)
Dr. Channing Robertson (stanford prof)
We are looking at a 2010 presentation which Holmes showed to her board of directors about the development of the 4.0.
One bullet:
"Multiplexing 65+ assays"
We were designing our cartridges to be able to run 65 or more assays on the cartridge at the same time
One bullet:
"Multiplexing 65+ assays"
We were designing our cartridges to be able to run 65 or more assays on the cartridge at the same time
(holmes said)
Also a slide titled "System integration of New Technologies"
We saw pictures of the
Centrifuge --Nucleic Acid-- Ampl Cytometry --
Colorimetry --ELISA -- Robotics and Machine Vision.
She gave this same presentation to the board of directors
Also a slide titled "System integration of New Technologies"
We saw pictures of the
Centrifuge --Nucleic Acid-- Ampl Cytometry --
Colorimetry --ELISA -- Robotics and Machine Vision.
She gave this same presentation to the board of directors
With regard to which retail companies #ElizabethHolmes sought to partner with.
"All of them," she said with a huge smile. “Every pharmacy company that we knew of."
"All of them," she said with a huge smile. “Every pharmacy company that we knew of."
Some of the retail companies, "Thought we were too early, to young," Holmes testified. "that we didn't have the experience to do what we sought to do."
But Walgreens and Safeway did want to pursue.
But Walgreens and Safeway did want to pursue.
Holmes met with former witness and Walgreens CFO Wade Miquelon, and in March 2010.
We are looking at the presentation she showed in the meeting.
We are looking at the presentation she showed in the meeting.
A claim on one slide — one prosecutors have honed in on.
"Theranos system shave been comprehensively validated over the course of the last seven years by ten of the fifteen largest pharmaceutical companies," the bullet read.
"Theranos system shave been comprehensively validated over the course of the last seven years by ten of the fifteen largest pharmaceutical companies," the bullet read.
What Holmes understood that statement to mean:
"That our systems, chemistries, cartridges, device software had been tested against standards by these companies," she testified.
"That our systems, chemistries, cartridges, device software had been tested against standards by these companies," she testified.
Holmes testified she put the logos on the Pfizer and Schering-Plough reports.
"Because this work was done in partnership with those companies and I was trying to convey that...
I wish I had done it differently," she said.
"Because this work was done in partnership with those companies and I was trying to convey that...
I wish I had done it differently," she said.
Did you try to conceal from Pfizer that you had added Pfizers logo at the top of the report?
Not at all
Not at all
She sent the Pfizer cancer study to Walgreens b/c she wanted to share what she viewed as positive data w/ them
"The devices worked, and I thought the data was very good and i wanted to share it to them," she said.
"The devices worked, and I thought the data was very good and i wanted to share it to them," she said.
She also wanted to share the Schering-Plough data with them.
"We had worked with Schering-Plough to establish very rigorous standards," she testified, and said they had run 1000s of cartridges.
"We had worked with Schering-Plough to establish very rigorous standards," she testified, and said they had run 1000s of cartridges.
"Our team was really excited about this," Holmes said w/ reference to a Johns Hopkins report which gave conclusions including: “The technology is novel and sound,”
"We had gone through every aspect of our invention in detail," she said.
"We had gone through every aspect of our invention in detail," she said.
Holmes mentions Sunny Balwani for what I believe is the first time in her testimony.
Balwani also played a role in the negotiations with Walgreens, she said.
Balwani also played a role in the negotiations with Walgreens, she said.
Holmes said she proposed a change to a draft of an agreement w/ Walgreens which began "as we discussed this is a new product..."
"We were still in the dev process, and we needed to complete devand do the studies, to be able to make representations like this,"she testified.
"We were still in the dev process, and we needed to complete devand do the studies, to be able to make representations like this,"she testified.
Holmes' eye contact today is strictly on her attorney Kevin Downey
Daniel Young was in charge of developing the project plan for getting ready to launch at Walgreens stores, Holmes testified.
"He is an incredibly smart person who had done great work on our informatics team," Holmes testified.
In this 2012 time period there were 4 groups, including Immunoassay...PCR...etc.
Ian Gibbons advised those four teams of scientists, Downey elicited.
Ian Gibbons advised those four teams of scientists, Downey elicited.
Daniel Young emailed Holmes in Feb. 2012.
“As you can see from the CPT there.... n =1138" Young wrote. "n=116 that are currently categorized as 'NP' namely 'not planned with current tech.'"
"He’s saying there are just over 1000 CPT codes that we could do," Holmes said
“As you can see from the CPT there.... n =1138" Young wrote. "n=116 that are currently categorized as 'NP' namely 'not planned with current tech.'"
"He’s saying there are just over 1000 CPT codes that we could do," Holmes said
CPT codes = billing codes,
we've seen the 1000+ CPT multiple times during the prosecutions case.
we've seen the 1000+ CPT multiple times during the prosecutions case.
Young sends Holmes an "update" (Downey's words) from another scientist Paul Patel named: "
Colorimetry assay time breakdowns."
We looked at it briefly .
Colorimetry assay time breakdowns."
We looked at it briefly .
Downey showed an email from the head of the Cytometry team, Chimney Pangarkar.
Holmes understood the email to mean, "that Dr. Pangarkar and his team and developed all of the tests for Cytometry that were relevant for retail," she testified.
Holmes understood the email to mean, "that Dr. Pangarkar and his team and developed all of the tests for Cytometry that were relevant for retail," she testified.
Holmes said she often made validation reports available to those interested, but with some redactions.
"Sometimes there was trade secret info about the tech itself," she explained.
"Sometimes there was trade secret info about the tech itself," she explained.
Two device exteriors are published to jurors screens.
the 3.0 on the left, the 4.0 on the right
the 3.0 on the left, the 4.0 on the right
Now we are looking at their insides
The 4.0 on the left, the 3.0 on the right.
Holmes explained them to the court.
The 4.0 on the left, the 3.0 on the right.
Holmes explained them to the court.
Scientist leading hardware development between 2010 and 2013.
Dr Young oversaw the process, Tony nugget and then Tim smith, Holmes said.
She got updates, and we are looking at one.
Dr Young oversaw the process, Tony nugget and then Tim smith, Holmes said.
She got updates, and we are looking at one.
Holmes said Theranos made the decision to do all of the manufacturing themselves.
"We recognized this was new technology that had never been manufactured before," she said.
They did it to control costs and quality, among other reasons.
"We recognized this was new technology that had never been manufactured before," she said.
They did it to control costs and quality, among other reasons.
"For the top 75 whole blood tests, only the following are still under development," Young wrote listing two on 4/21/2013, as downey read.
There were also 4 which needed to be integrated, Young wrote :
-CBC/WBC
-PT/aPTT
-Blood typing (rh/abo)
-Blood Gases
There were also 4 which needed to be integrated, Young wrote :
-CBC/WBC
-PT/aPTT
-Blood typing (rh/abo)
-Blood Gases
The original intention was to have their devices at the point of care, with the patient Holmes said.
But they ended up planning to implement them into a central lab.
There were challenges to that, Downey elicited.
But they ended up planning to implement them into a central lab.
There were challenges to that, Downey elicited.
break.
We're back.
Holmes explains the phases of the Walgreens rollout.
Phase 1. Central Lab
Phase 2. Theranos devices in Walgreens stores
"We though it would be incredibly short," Holmes said about phase 1.
Holmes explains the phases of the Walgreens rollout.
Phase 1. Central Lab
Phase 2. Theranos devices in Walgreens stores
"We though it would be incredibly short," Holmes said about phase 1.
We are looking at emails from Young to Holmes, which purport to guess the number of tests that could cover 90+% of the tests ordered.
Exchange is in Aug, 2010.
Exchange is in Aug, 2010.
Fast forward to Oct. 2012.
"When is our next device shipment planned?" she asked an employee.
W/ the Walgreens rollout a year away, Downey asked why she sent the email
"Because we wanted to make sure that the devices were robust," she said, adding they'd fix issues that arose
"When is our next device shipment planned?" she asked an employee.
W/ the Walgreens rollout a year away, Downey asked why she sent the email
"Because we wanted to make sure that the devices were robust," she said, adding they'd fix issues that arose
Downey asked about alternate ways for which those small samples would be processed in a central lab in 2013
"We made inventions that allowed us to run small samples of blood on those platforms," Holmes said
Holmes cited Tecan machines, a modified Siemens ADVIA and another
"We made inventions that allowed us to run small samples of blood on those platforms," Holmes said
Holmes cited Tecan machines, a modified Siemens ADVIA and another
Downey acknowledged investors testimony that they were not aware Theranos was analyzing blood samples on these platforms.
"Did theranos publcially disclose that it was operating these third party devices?" he asked Holmes.
"No," Holmes said
"Did theranos publcially disclose that it was operating these third party devices?" he asked Holmes.
"No," Holmes said
did you tell many people outside of theranos?
not many
not many
Holmes testified they sought non-public patent applications for these inventions, and worked to protect them as trade secrets
"this was an invention that we understood from our council we had to protect as a trade secret, and if we disclosed that info we would lose that protection," she said.
“The advice was to keep it confidential so that theranos would have chance to profit off that info.”
“The advice was to keep it confidential so that theranos would have chance to profit off that info.”
They did however disclose the info to the FDA, holmes testified.
Why the FDA and not others Downey asked
Because FDA assured protection that theranos would have trade secret protection holmes said.
Why the FDA and not others Downey asked
Because FDA assured protection that theranos would have trade secret protection holmes said.
Dr. Adam Rosendorff, who the defense grilled for several days on cross, gets brought up.
In summer/fall 2013 he had a role in assay validation, holmes testified. he established a set of criteria and scientists would work with him to meet them.
In summer/fall 2013 he had a role in assay validation, holmes testified. he established a set of criteria and scientists would work with him to meet them.
"The current launch list covers 200 tests, in both blood and urine sample.s The collection of these reportable covers .97% of test frequency for these two matrices. (Note that I have not yet included TNAA tests on this last," Daniel Young wrote to Holmes in 8/2013.
Did you ever pressure Dr. Rosendorff to clinically validate tests he did not want to validate? Downey asked.
No, Holmes testified.
No, Holmes testified.
He asked if she had ever pressured anyone to clinically validate a test they did not want to including Daniel Young
Absolutely not, Holmes replied.
Absolutely not, Holmes replied.
She also testified she told Rosendorff to do whatever it took and gave him the time he needed to do everything properly leading up to the launch in 9/2013
“We did delay the validation of any test, of which there was a concern,” Holmes said, addressing Rosendorff's testimony.
She said she did not impose any deadlines for an assay to be validated.
She said she did not impose any deadlines for an assay to be validated.
Holmes testified the original Walgreens launch date was March 2013, but it was pushed to Sept 2013 to get the right workers in place etc.
Holmes did not personally verify every statement in the marketing materials, she said.
Holmes did not approve any marketing materials that she thought were inaccurate, she said.
Holmes did not approve any marketing materials that she thought were inaccurate, she said.
"We wanted a chance to establish our own brand and build a company that would not just be inside Walgreens, but hopefully would be available to people widely," Holmes said about her decision to hire marketers.
So they hired TBWA\Chiat\Day, who had worked with Apple, Holmes testified.
They worked for over a year.
Theranos paid them millions of dollars, she said.
They worked for over a year.
Theranos paid them millions of dollars, she said.
While Downey pulls up the pres - an aside from an earlier line
Theranos also engaged other consultants to help it with a public launch of itself as a retail company, Holmes said, including Grow Marketing.
advice holmes and theranos got was to do a company announcement and then a seperate release with Walgreens, holmes said
The former, manifested into an interview with Joe Rago who wrote about healthcare economics, Holmes said.
His article is a centerpiece in the prosecutions case, of which a draft was sent to holmes pre-publication
His article is a centerpiece in the prosecutions case, of which a draft was sent to holmes pre-publication
Rago also spoke with Grow Marketing, #theranos board members, and other employees. Others at Theranos also reviewed the draft of Mr. Rago's article, Holmes testified.
Holmes smiled as she told the jury about their 2013 joint release with Walgreens about the launch.
"We wanted to change the cost of testing," she told them, emphasizing the unique nature of their small sample testing technology.
"We wanted to change the cost of testing," she told them, emphasizing the unique nature of their small sample testing technology.
Downey is on a line now about a meeting Holmes & Theranos had w/ the FDA, to in part discuss their business model. Not solely to get their laboratory tests, approved, Holmes said.
Holmes emailed the FDA that she had video taped the inside of her device.
"We have figured out how to effectively video tape the inside of our devices executing nucleic acid amplification protocols have been building a secure website to post that on for you to access," she said
"We have figured out how to effectively video tape the inside of our devices executing nucleic acid amplification protocols have been building a secure website to post that on for you to access," she said
Downey asked why she would share this info with the FDA given her answers earlier about trade secrets.
"B/c I understood they had means to protect trade secrets," she answered
She did not think they would think the tech didn't work, she also testified.
"B/c I understood they had means to protect trade secrets," she answered
She did not think they would think the tech didn't work, she also testified.
"Any hesitation about telling the FDA there were conventional analyzers being used in phase 1 (Walgreens) of theranos operations?" Downey asked.
"No," she replied.
We are looking at a supporting exhibit, which are difficult to read
"No," she replied.
We are looking at a supporting exhibit, which are difficult to read
She suggested that I send as much info as I could about how we were operating, Holmes said of an FDA staffer, who she emailed
TRADE SECRET/CONFIDENTIAL COMMERCIAL INFORMATION EXEMPT FROM DISCLOSURE UNDER THE FREEDOM OF INFORMATION ACT
^this at the top of Holmes reply email
TRADE SECRET/CONFIDENTIAL COMMERCIAL INFORMATION EXEMPT FROM DISCLOSURE UNDER THE FREEDOM OF INFORMATION ACT
^this at the top of Holmes reply email
Looks like she attached some docs
"Tests run in Theranos' CLIA laboratory from Samples collected to Theranos Wellness Centers"
(One of the docs sent to FDA)
Shows all of the tests being run in theranos' clinical labs.
It shows columns: TEST | CHEMISTRY| DEVICE
(One of the docs sent to FDA)
Shows all of the tests being run in theranos' clinical labs.
It shows columns: TEST | CHEMISTRY| DEVICE
Holmes disclosed to the FDA that theranos was conducting venous tests on conventional machines, Downey elicited.
Any hesitation about disclosing this to the FDA? he asked
No
Any hesitation about disclosing this to the FDA? he asked
No
"I understood the FDA is a government agency, it had the mechanism in place to protect trade secrets for the many companies that work with the FDA," Holmes explained.
“I thought I could learn from him,” Holmes said of Secretary George Schultz, who she met through a professor at stanford, and would become the non-executive chairman at Theranos
Board members were compensated by 150k salary / year, 500k shares in the company.
In Henry Kissinger's case, an additional $500k for consulting fees.
In Henry Kissinger's case, an additional $500k for consulting fees.
(holmes says)
They met 4 times a year
Oct 8, 2013 - the first meeting Mattis attended
"After an all night cross country trip?" downey asks with a chuckle
Yes, Holmes replied
Oct 8, 2013 - the first meeting Mattis attended
"After an all night cross country trip?" downey asks with a chuckle
Yes, Holmes replied
Holmes said she sought advice from the board members in this meeting, for one about trade secrets.
"We were sharing with the board that we had these trade secret inventions, that there were inventions we thought were a big deal," she said.
"We were sharing with the board that we had these trade secret inventions, that there were inventions we thought were a big deal," she said.
She shared one trade secret in particular, Holmes said
“The inventions that we could take a small sample and be able to run that sample on a traditional machine,” Holmes said.
“The inventions that we could take a small sample and be able to run that sample on a traditional machine,” Holmes said.
Holmes said she sought advice from the board on
"Whether it should be a trade secret or if it should be filed through public patents," she said.
"Whether it should be a trade secret or if it should be filed through public patents," she said.
Holmes said Theranos counsel David Boies spoke with the board about a trade secret recommendation.
"Senator Nunn talked with us about the Coca Cola formula and how it had been protected as a trade secret, so that people didn't find out about the invention," she said
"Senator Nunn talked with us about the Coca Cola formula and how it had been protected as a trade secret, so that people didn't find out about the invention," she said
Board meetings were often a full day, and often dinners the night before and the night after, Holmes said.
Holmes attorneys have asked many questions about the length of meetings — those Holmes had with investors, who have testified.
And now those she had with her board.
And now those she had with her board.
Now a pres shown at the Oct. 2013 board meeting.
"these are clinical correlations, which is actual human samples run on the theranos test and the traditional test and comparing results," holmes said.
"We wanted them to see the actual data on the tests we developed," Holmes said
"these are clinical correlations, which is actual human samples run on the theranos test and the traditional test and comparing results," holmes said.
"We wanted them to see the actual data on the tests we developed," Holmes said
She addressed Mattis' surprise, to which he testified, about there not being medical doctors on the Theranos board.
Holmes admits none were present at that Oct. meeting, but said she subsequently recruited 2:
Dr. Bill Foege (former CDC director)
Sen. Bill Frist (a surgeon)
Holmes admits none were present at that Oct. meeting, but said she subsequently recruited 2:
Dr. Bill Foege (former CDC director)
Sen. Bill Frist (a surgeon)
We looked at an email from holmes to then Walgreens CFO Wade Miquelon about a national rollout.
They agreed at the end of 2013 to operate "at least 3,000 stores over the next two years," Holmes said.
They agreed at the end of 2013 to operate "at least 3,000 stores over the next two years," Holmes said.
"Walgreens got a promise of exclusivity which meant we would not work with certain competitors that they had identified without their permission," Holmes said.
About how Holmes believed the rollout was going initially
I understood it was going well... I understood issues were coming up, yes.
I understood it was going well... I understood issues were coming up, yes.
Did you hear at some point about the number of venous draws that were being taken at Walgreens
I did
Did you understand that was something that would slow down or put out the rollout
No
I did
Did you understand that was something that would slow down or put out the rollout
No
Did theranos need capital by the end of 2013?
We had received 75 mill from Walgreens, so we did not need capital after that
Did you never the less make an offering at the end of 2013?
We did…we included all of our existing shareholders in case they wanted to buy more shares
We had received 75 mill from Walgreens, so we did not need capital after that
Did you never the less make an offering at the end of 2013?
We did…we included all of our existing shareholders in case they wanted to buy more shares
(Prosecutors have honed in on the Dec. 2013 stock offering, which is a point where several of the investor witnesses who underpin counts of fraud invested)
Back to Walgreens -
Holmes testified she had another contact at Walgreens who countered Dr. Jhaveri's testimony about Walgreens no longer being committed to a national rollout around summer 201,
Her contact Alex Gourlay who she was in touch w/ did not give consistent testimony
Holmes testified she had another contact at Walgreens who countered Dr. Jhaveri's testimony about Walgreens no longer being committed to a national rollout around summer 201,
Her contact Alex Gourlay who she was in touch w/ did not give consistent testimony
Balwani, who had been in touch with Jhaveri, also never told the 3000+ store deal was off, holmes testified.
We're back from break.
And back to the Dec. 2013 Theranos stock offering.
And back to the Dec. 2013 Theranos stock offering.
the board considered and approved the Dec. 31, 2013 closing transaction, Holmes testified.
"A number of investors testified that there was a short period in which they had to consider that offering," Downey brought up
The announcement to shareholders: 12/15
The closing: 12/31
"A number of investors testified that there was a short period in which they had to consider that offering," Downey brought up
The announcement to shareholders: 12/15
The closing: 12/31
"A period of just a little over 2 weeks at the end of the year and the holiday season," Downey continued.
He asked for Holmes explanation.
He asked for Holmes explanation.
“We were doing this deal with Walgreens which we had been negotiating. We learned at this point we would be closing the deal by Dec 31., which meant there was a window for shareholders to invest…and we wanted to share it with them when we knew,” Holmes testified.
We are now looking at the "action in unanimous written consent" from the board directors.
"the board hereby approves the sale and issuance of the Balance in one or more closings at a price of 15.00 per share..." the document said, as Downey read out loud.
"the board hereby approves the sale and issuance of the Balance in one or more closings at a price of 15.00 per share..." the document said, as Downey read out loud.
With regard to offering the stock by the end of the year 2013.
Did you understand that was necessary under theranos’ agreements with Walgreens?
I did, Holmes said.
Did you understand that was necessary under theranos’ agreements with Walgreens?
I did, Holmes said.
Chris Lucas was a family friend of Holmes, who would help Theranos prepare financial projections around 2008
Why, Downey asked,
"Our board did not think I had the expertise to do that... they suggested that Chris come in to build projections," Holmes testified.
Why, Downey asked,
"Our board did not think I had the expertise to do that... they suggested that Chris come in to build projections," Holmes testified.
Holmes spoke one-on-one with Lucas
He had, "a few questions about who else was doing deals with us at that time that had been relayed to him from his investors, and he also wanted to talk with me about Mr. Hall (Tolbert's boss) investing directly in theranos," holmes testified.
He had, "a few questions about who else was doing deals with us at that time that had been relayed to him from his investors, and he also wanted to talk with me about Mr. Hall (Tolbert's boss) investing directly in theranos," holmes testified.
Any questions about your business plan?
No.
No.
Holmes testified she didn't know Eisenman had decided to invest in Theranos, until Sunny Balwani told her. And she was surprised.
"We had a lot of frustration....and we knew he had a lot of frustration...," she testified of her surprise.
"We had a lot of frustration....and we knew he had a lot of frustration...," she testified of her surprise.
Holmes testified she had two meetings with Brian Grossman and PFM, and said their meetings were oriented around a long-term mission.
The first meeting: Introductory. "I shared my vision, they shared their experience for healthcare," Holmes said.
The first meeting: Introductory. "I shared my vision, they shared their experience for healthcare," Holmes said.
The second in Jan 2014 (weeks before the investment) Holmes said she was present for "just the beginning of it."
Primary contact between PFM and #Theranos between 2nd meeting and time of the investment ? Downey asked.
Sunny Bałwani, Holmes said.
Primary contact between PFM and #Theranos between 2nd meeting and time of the investment ? Downey asked.
Sunny Bałwani, Holmes said.
Downey asked what role she believed Mosley played in the investments of the network of "high quality families" as Mosley had put — including the Walton's the Cox'es etc. — which had chosen to invest in Theranos.
"I understood he was an advisor to them," she said.
"I understood he was an advisor to them," she said.
From a 2011 presentation with CHIAT/DAY (holmes' hired marketers)
A slide which shows:
-Brand Belief
-Brand Behavior
A slide which shows:
-Brand Belief
-Brand Behavior
"They recommended that we try to simplify what we were doing and convey it in images and very few words that would allow us to grasp the change we make," Holmes testified.
"Our belief was providing access in testing," holmes said also pricing and low cost.
"Our belief was providing access in testing," holmes said also pricing and low cost.
“We also knew Walgreens could easily replace us,” Holmes said.
CHIAT/DAY gave theranos advice about how to set their company apart from other companies that become generic within a pharmacy, hold testified.
CHIAT/DAY gave theranos advice about how to set their company apart from other companies that become generic within a pharmacy, hold testified.
"Ultimately when #theranos ran into lab and regulatory issues we terminated the relationship with Safeway," holmes said. (2016, she says)
Between 2010 and 2013 Steve Burd was the CEO, who testified earlier in trial.
Part of Safeway's due diligence process on Theranos financials: Meetings between Safeway execs and Sunny Balwani, Holmes said.
"We took your financial model based on Safeways projections and added 3 more rows to the “Retail Rx” tab.” Balwani wrote in an email to Brad Wolfsen of Safeway, as Downey highlighted.
Balwani was principally responsible for "shepherding financial due diligence," Holmes agreed
Balwani was principally responsible for "shepherding financial due diligence," Holmes agreed
Former Safeway Steve Burd had said it was strange there was no legal counsel present w/ Holmes when the pair met.
"This was a really important relationship to us, I wanted to talk to him directly," Holmes said.
"This was a really important relationship to us, I wanted to talk to him directly," Holmes said.
...We didnt have the money to have a lot of lawyers. We were a small company at that point," Holmes said. (2010 I believe)
Steve Burd wanted Theranos to modify their device, Holmes testified, into something that could process 12 samples at a time.
"This ended up being very challenging," she said.
We're looking at a sketch of a prototype with "12 bays"
"This ended up being very challenging," she said.
We're looking at a sketch of a prototype with "12 bays"
"Did theranos never-the-less attempt to build these devices?"
"we did"
They had challenges however, and Burd offered to help. (We saw emails of her not taking him up on his offer)
"we did"
They had challenges however, and Burd offered to help. (We saw emails of her not taking him up on his offer)
Holmes said she took up Burd up on some offers for help, some she didn't.
"Steve had suggested that some of the engineers of his basements could help us with building these [multi-cartridge] devices," she said, but her engineers felt they had the expertise they needed.
"Steve had suggested that some of the engineers of his basements could help us with building these [multi-cartridge] devices," she said, but her engineers felt they had the expertise they needed.
In Dec. 2012 Burd wrote Holmes, as we saw during the government's case, for an update on a time table for a Safeway launch
He thought Safeway's stock was suffering, and that an announcement could push his stock price, Holmes said.
He thought Safeway's stock was suffering, and that an announcement could push his stock price, Holmes said.
Which of the two partners was devoting more resources for theranos to launch in its stores
Walgreens was.
Walgreens was.
"[Burd] did not like it, like he liked putting a device in the store," Holmes said, in regard to the idea of having a central lab as opposed to device in stores.
Who was in charge of the preparation of financial documents and projections at #theranos?
Sunny Balwani
#ElizabethHolmes
Sunny Balwani
#ElizabethHolmes
Email from Balwani to Holmes -- an attachment on 7/15/2014
"Theranos_US..."
Attached, is the same financial projections we just looked at.
"Theranos_US..."
Attached, is the same financial projections we just looked at.
"As you understood it, did Mr. Balwani prepare this?" Downey asked.
"he did," holmes said.
"he did," holmes said.
"because he told me that," holmes said, when Downey asked her how she understood something about a financial model Balwani prepared.
Onto a new topic: The department of defense
After 2010, was theranos working on its 4.0 system?
We were
Did theranos begin to talk again to reps of various areas o the DOD about potentially entering into theranos
Yes
We were
Did theranos begin to talk again to reps of various areas o the DOD about potentially entering into theranos
Yes
What were some of the offices, or commands within the DoD where Theranos pursued relationships?
...Several…Central command, special operations command, and Africa command
...Several…Central command, special operations command, and Africa command
Downey brought up the Burn study, which proceeded some time after 2010, holmes testified.
That study lasted for "several years" holmes said.
"We placed theranos devices in burn hospitals throughout the US," holmes said.
That study lasted for "several years" holmes said.
"We placed theranos devices in burn hospitals throughout the US," holmes said.
Who was responsible for managing that project at theranos?
Dr. Young on the scientific side...Dan edlin on program management side
Dr. Young on the scientific side...Dan edlin on program management side
What did you understand about tthernaos' tech as a result of that study
"I understood that our systems had performed well," Holmes testified, but admitted they hadn't had a large sample of burn patients.
"I understood that our systems had performed well," Holmes testified, but admitted they hadn't had a large sample of burn patients.
Now to a study Theranos had planned with Africa Command, as showed in documents.
The intent of this study is to establish operational functionality of Theranos laboratory systems and quantify impacts of utilizing these systems at forward deployed locations...
if theranos [tests] are shown to be operationally effective and have the capacity to improve patient care, reduce costs, and mitigate risks, service members throughout the organization will benefit by further deployment of these devices
the hypothesis, as holmes recalled:
"If we could enable testing in really remote areas, we could make a real impact on survival," she said.
"If we could enable testing in really remote areas, we could make a real impact on survival," she said.
Breaking for the long Thanksgiving Day weekend.
Holmes is NOT done with direct. She will be back answering questions from attorney next Monday
Holmes is NOT done with direct. She will be back answering questions from attorney next Monday
Judge Edward J. Davila giving guidance to the jurors and others.
"be safe, make good choices, do what you can to avoid any possible contact w/ anything, stay healthy," he told everyone in the court.
"be safe, make good choices, do what you can to avoid any possible contact w/ anything, stay healthy," he told everyone in the court.
Downey thanks the courthouse staff.
"We recognize this proceeding has been an extraordinary burden," he said.
"We recognize this proceeding has been an extraordinary burden," he said.
Judge thanks us for toning down our keyboard noise.
I'm smiling.
see you all next week
I'm smiling.
see you all next week
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