#ElizabethHolmes trial day 36:
Holmes will be back on the stand for her sixth day of testimony.
The defense revealed they do not have enough witnesses to fill up this week.
Arriving at 3:42 a.m. got me #15 in line 😁
Holmes will be back on the stand for her sixth day of testimony.
The defense revealed they do not have enough witnesses to fill up this week.
Arriving at 3:42 a.m. got me #15 in line 😁
Holmes is here
The sun is up!
Here we go. Judge is seated.
Some pretrial matters before the jury comes in and Holmes returns to the stand.
Some pretrial matters before the jury comes in and Holmes returns to the stand.
Prosecutor Robert Leach just told the judge he expects he will finish his cross today and that the defense has another witness ready to go.
Prosecutor Kelly Volkar is at the podium requesting Judge Edward J. Davila exclude 5 new documents which the defense recently produced and pertain to the pharmaceutical documents
(the ones with the logos Holmes admitted to placing on the docs before sending to Walgreens)
(the ones with the logos Holmes admitted to placing on the docs before sending to Walgreens)
"This is a very egregious violation," Volkar said.
Defense attorney Kevin Downey fires back.
“I’m very glad to have this chance to talk tot he court about these documents," he began.
"This government team investigated this case for 3 years...They turned Theranos upside down...Pfizer upside down...GSK upside down." he said.
“I’m very glad to have this chance to talk tot he court about these documents," he began.
"This government team investigated this case for 3 years...They turned Theranos upside down...Pfizer upside down...GSK upside down." he said.
"And nowhere in any of those productions, did we get in rule 16 discovery, emails that went from Ms. Holmes account attaching copies …with the logos to Pharma companies. Nowhere," he continued.
Read up on what Holmes told jurors about the pharmaceutical documents and their logos"
abcnews.go.com/US/theranos-fo…
abcnews.go.com/US/theranos-fo…
"We believe we have met our burden of proof," Volkar said in her argument.
This is one of the emails the government seeks to exclude.
It appears to show one of Holmes' assistants sending the GSK report (the third pharma report that was altered) to GSK employees.
It appears to show one of Holmes' assistants sending the GSK report (the third pharma report that was altered) to GSK employees.
Gov argues there is no record of any GSK response to this email
Downey characterizes the logo issue as a, "Side show issue to the issue that is set forth in the indictment.”
For those who have been following: Holmes' team is arguing another motion to "Admit Customer Feedback Reports."
Jury is in the courtroom.
"Have any of you had occasion to discuss learn about see watch read or have anything to do with this case outside of what you heard here...?" Davila asked
No hands from jurors
"Have any of you had occasion to discuss learn about see watch read or have anything to do with this case outside of what you heard here...?" Davila asked
No hands from jurors
"My name is Elizabeth Holmes," Holmes said from the stand.
Prosecutor Robert Leach is back at the podium for the rest of his cross examination.
Here we go.
Prosecutor Robert Leach is back at the podium for the rest of his cross examination.
Here we go.
Leach brought up medevacs.
"Theranos did not actually deploy its device on a military helicopter?" he asked.
"Not for clinical use, no," Holmes said.
"Theranos did not actually deploy its device on a military helicopter?" he asked.
"Not for clinical use, no," Holmes said.
He asks her to refer to her SEC deposition testimony in the red binder in front of her, where she was asked a similar question.
FROM SEC, as leach read
Q: Did you tell Wade Miquelon at Walgreens that Theranos had deployed its TSPU on military helicopters
A: no
Q: ...Would that have been true at any time from 2010 to 2014
A: We did not deploy on helicopters
Q: Did you tell Wade Miquelon at Walgreens that Theranos had deployed its TSPU on military helicopters
A: no
Q: ...Would that have been true at any time from 2010 to 2014
A: We did not deploy on helicopters
"Theranos analyzers were never used for clinical care for soldiers abroad?" Leach asked today
"Correct," Holmes replied
"Correct," Holmes replied
No-one ever told you Theranos analyzers had been placed on medevacs?
Again I think there was work done for transport of medevacs...not used for clinical care
Again I think there was work done for transport of medevacs...not used for clinical care
Holmes testified Theranos never sent any of its analyzers to Afghanistan, Iraq or the middle east.
"[From] 2013-2015 you were aware that Theranos [analyzers] had never been placed in medevacs?
"I was," Holmes said.
"I was," Holmes said.
On whether Theranos earned any money from AFRICOM
"I don't think so," Holmes testified.
"I don't think so," Holmes testified.
Holmes testified she never told investors or Safeway CEO Steve Burd that Theranos deployed its analyzers to the battlefield.
Leach confronted Holmes about the testimony of many witnesses at this trial who testified to what they say Holmes told them about her device being on medevacs/remote areas of the world.
Among those Leach cited:
Safeway CEO Steve Burd, DeVos family investment manager Lisa Peterson, investor Brian Grossman, journalist Roger Parloff, and investor Bryan Tolbert
Safeway CEO Steve Burd, DeVos family investment manager Lisa Peterson, investor Brian Grossman, journalist Roger Parloff, and investor Bryan Tolbert
"You wouldn’t have told investors that because you knew it wasn’t true?" Leach asked, regarding her device being deployed on helicopters in the battlefield.
Holmes agreed.
Holmes agreed.
Leach has shifted is examination to the miniLab / Edison's capabilities.
Holmes said she never told investors that Theranos was actually using the 3.5 device for something other than immunoassays in the clinical lab.
We are looking at an Oct. 2013 email from Daniel Young to Sunny Balwani and Elizabeth Holmes titled CLIA Updates.
A month after the Walgreens launch, Leach noted.
A month after the Walgreens launch, Leach noted.
"We discussed QC needs for the new Theranos LDTs," Young wrote, as leach highlighted.
Leach elicits from Holmes that LDT's are tests not yet approved by the FDA.
"I have not discussed proficiency testing yet with CLIA for LDT's," Young continued as Leach highlighted.
Leach elicits from Holmes that LDT's are tests not yet approved by the FDA.
"I have not discussed proficiency testing yet with CLIA for LDT's," Young continued as Leach highlighted.
"Our Na, K Cl test results are still not as reliable as I would like," Young also wrote in the email chain.
(These quotes Leach has chosen to read are being picked out of a very dense email)
(These quotes Leach has chosen to read are being picked out of a very dense email)
On Oct 22, 2013:
"Basically there have been results for which all ISE results are out of range. For example, K is high, and Cl and Na are low relative to the reference range," Young wrote.
"Basically there have been results for which all ISE results are out of range. For example, K is high, and Cl and Na are low relative to the reference range," Young wrote.
This is an example of "you being apprised of developments in the CLIA lab, is that fair?" Leach asked.
"Yes," Holmes said.
"Yes," Holmes said.
"Attached is a spreadsheet that lists all tests that have been performed on subjects since 9/9/2013," Young wrote to Holmes.
(roughly the date of the Walgreens Launch, leach notes)
We are looking at the spreadsheet: of note, it shows 12 tests.
(roughly the date of the Walgreens Launch, leach notes)
We are looking at the spreadsheet: of note, it shows 12 tests.
TEST:
CBC
CMP
Lipid
Urianalysis
TSH
PSA
VitD
HbA1c
Uric Acid
DHEA-S
Total, Testosterone
Free, Testosterone
CBC
CMP
Lipid
Urianalysis
TSH
PSA
VitD
HbA1c
Uric Acid
DHEA-S
Total, Testosterone
Free, Testosterone
Holmes testified she was generally apprised of what was going on in the CLIA lab btwn 2013 and 2014
Leach asked if at any given point in time she knew generally how many assays Theranos was running on the Edison 3.5 in the CLIA lab
Holmes said she was given ongoing updates
Leach asked if at any given point in time she knew generally how many assays Theranos was running on the Edison 3.5 in the CLIA lab
Holmes said she was given ongoing updates
Holmes said she knew between 2010 and 2014 Theranos had bought analyzers from three third party companies.
That wasn’t hidden from you? Leach asked
No, she said.
That wasn’t hidden from you? Leach asked
No, she said.
You had aspirations of one day using only the Minilab?
Yes
Aspirations that one day bc you were using the miniLab, your footprint would be substantially different than the footprint of a traditional lab?
(Holmes agreed)
But in 2014 you hadn’t actually done that?
Correct
Yes
Aspirations that one day bc you were using the miniLab, your footprint would be substantially different than the footprint of a traditional lab?
(Holmes agreed)
But in 2014 you hadn’t actually done that?
Correct
Your testimony is that in 2014 Theranos could run approx 30 tests [in the clinical lab’] from a single finger stick blood draw?
“I don’t have a reason to doubt that,” Holmes said.
“I don’t have a reason to doubt that,” Holmes said.
We're looking at the projected statement of income shared with RDV (witness Lisa Peterson's investment company) which shows Theranos' revenue projection as $990 million by 12/31/2015
Holmes doesn't recall telling Lisa Peterson about this number.
Holmes doesn't recall telling Lisa Peterson about this number.
There's also the $40 million projection by the end of 2014, which is the revenue # Theranos projected for pharmaceutical services.
Holmes said this number is wrong.
Holmes said this number is wrong.
"Name a Pharma company you think you could have done that with," Leach said.
Holmes brought up GSK
Leach said that was from "back in 2010," and recalled Theranos Controller Danise Yam's (AKA So Han Spivey) testimony that Theranos never realized a single dollar from GSK
Holmes brought up GSK
Leach said that was from "back in 2010," and recalled Theranos Controller Danise Yam's (AKA So Han Spivey) testimony that Theranos never realized a single dollar from GSK
Holmes smiled as she corrected Leach who said billion when referring to the $990 million number.
"I appreciate you’re attention to the zeros here," the prosecutor quipped back.
Holmes laughed.
"I appreciate you’re attention to the zeros here," the prosecutor quipped back.
Holmes laughed.
Holmes understood that Dr. Sunil Dhawan (one of the lab director witnesses who testified he rarely ever came to the Theranos lab) was Sunny Balwani's dermatologist.
Leach is asking Holmes about what he is calling "stock options" extended to Dhawan.
Leach is asking Holmes about what he is calling "stock options" extended to Dhawan.
We are looking at an email from Danise Yam to Holmes in 7/2015 on which Yam revised the company's projected revenue for 2015 to $53 million.
Leach is asking Holmes about what she and Balwani said to Investor Brian Grossman of PFM.
For example: that they could do 1000 CPT codes with Theranos technology
Holmes said she didn't recall the specifics of what they talked about, but that was a topic of discussion.
For example: that they could do 1000 CPT codes with Theranos technology
Holmes said she didn't recall the specifics of what they talked about, but that was a topic of discussion.
We are looking at an email from Grossman to Holmes and Balwani including due diligence questions, sent on Jan 6, 2014.
Leach draws Holmes attn to the Financial Model/Projections section.
Leach draws Holmes attn to the Financial Model/Projections section.
"You never told PFM that #Theranos was using third party machines?" Leach asked
"Correct," Holmes said.
"Correct," Holmes said.
Holmes said they did talk about commercial analyzers with PFM in regard to venous testing
But not about the modifying of third party machines, Leach clarified.
But not about the modifying of third party machines, Leach clarified.
Leach brings up Parloff who wrote a glowing Fortune Mag front page piece on Holmes.
Leach asked if Holmes has a memory of forwarding the Parloff article to investors
"I don't," she said.
Leach is now attempting to refresh her memory...
Leach asked if Holmes has a memory of forwarding the Parloff article to investors
"I don't," she said.
Leach is now attempting to refresh her memory...
Leach shows Holmes sent an email to investors which links the Fortune piece.
"To our shareholders," the email began
"To our shareholders," the email began
You never told Roger Parloff you were modifying commercially avail machines to conduct patient testing?
Correct
Correct
"....today you wish you had handled your communications with Mr. Parloff differently? Leach asked.
"I do, I think I could have handled the communications differently," Holmes said.
"I do, I think I could have handled the communications differently," Holmes said.
Holmes first said she had wished she had done things differently with regard to her placing logos on the pfizer and Schering-Plough validation reports during her direct exam.
Last Tuesday, Leach shot a version of that phrase at her six times
Today, he continues that theme
Last Tuesday, Leach shot a version of that phrase at her six times
Today, he continues that theme
Leach is running through the Parloff article and pointing to certain statements. He is asking Holmes if they were incorrect statements as of July 2014 (when the article came out)
Ex:
"Theranos, which does not buy any analyzers from third parties...,"
Ex:
"Theranos, which does not buy any analyzers from third parties...,"
Another:
"It currently offers more than 200–and is ramping up to offer more than 1,000–of the most commonly ordered blood diagnostic tests, all without the need for a syringe," the article read
"I don’t think it is now," Holmes responded to his Q
"It currently offers more than 200–and is ramping up to offer more than 1,000–of the most commonly ordered blood diagnostic tests, all without the need for a syringe," the article read
"I don’t think it is now," Holmes responded to his Q
"The analyzers look like large desktop computer towers. Holmes declines to explain how they work, or even allow them to be photographed, citing the need to protect trade secrets," Parloff wrote, as Leach highlighted.
That’s bc you knew this article would be going to a large audience
Yes
You understood this was public with people who were not bound by confidentiality agreements
Yes
Yes
You understood this was public with people who were not bound by confidentiality agreements
Yes
Leach asked Holmes if she told investors in 2014 that the Safeway contract was going well and that they would be rolling out to Safeway stores in early 2015.
We will get the answer after break. 30 minutes.
We will get the answer after break. 30 minutes.
The judge and jury filed into the courtroom.
Holmes removed her forest green mask.
Leach is at the podium with more questions.
Holmes removed her forest green mask.
Leach is at the podium with more questions.
Leach pulled up a slide from a Dr. Ian Gibbons presentation shared with Johns Hopkins.
"Please not that this presentation is STRICTLY CONFIDENTIAL and discloses Theranos information not in the public domain,” the slide read.
"Please not that this presentation is STRICTLY CONFIDENTIAL and discloses Theranos information not in the public domain,” the slide read.
Did you ask them to sign documents before? Leach asked
Holmes didn't remember.
...Would it surprise you if you didn’t? Leach asked
"Not necessarily," Holmes said.
Holmes didn't remember.
...Would it surprise you if you didn’t? Leach asked
"Not necessarily," Holmes said.
Johns Hopkins provided an assessment of Theranos' tech.
"I don’t think we thought of it as validating the device," Holmes told the SEC in her deposition, as leach read out loud.
"I don’t think we thought of it as validating the device," Holmes told the SEC in her deposition, as leach read out loud.
Some Holmes / Balwani texts.
Balwani texted Holmes in Nov. 2014, "We can’t scale with Wag."
[At this time] You're still raising money from investors? Leach asked
Yes
Walton family?
I think so
Rupert Murdoch?
Yes
Balwani texted Holmes in Nov. 2014, "We can’t scale with Wag."
[At this time] You're still raising money from investors? Leach asked
Yes
Walton family?
I think so
Rupert Murdoch?
Yes
Next line from leach is a trade secret one.
Theranos sent at least two 3.0 devices to Walgreens, Holmes said.
You trusted them not to reverse engineer the miniLab.
correct
You trusted them to keep your secrets
we did
Theranos sent at least two 3.0 devices to Walgreens, Holmes said.
You trusted them not to reverse engineer the miniLab.
correct
You trusted them to keep your secrets
we did
On financials -- Holmes said Balwani "primarily interfaced" with their company controller So han Spivey.
"You were in court when Ms. Spivey said she reported to you from 2008-2016?" Leach asked
"Yes."
"You were in court when Ms. Spivey said she reported to you from 2008-2016?" Leach asked
"Yes."
Leach showed some of the financial statements Spivey sent Holmes.
"You knew you were ultimately responsible for theranos financial condition as CEO?" Leach asked.
"I did," Holmes said.
"You knew you were ultimately responsible for theranos financial condition as CEO?" Leach asked.
"I did," Holmes said.
By the way, mid financial question line, a juror's pen appeared to run out of ink. He waved it in the air and the judge's deputy brought him a new one
It's day 36 and they are still taking notes.
It's day 36 and they are still taking notes.
On to Dan Edlin (A witness in this trial who was a Theranos product manager who later reported directly to Holmes)
Edlin testified to preparing slides for investors.
...It's your decision to send them out? Leach asked Holmes.
"Ultimately," she testified.
Edlin testified to preparing slides for investors.
...It's your decision to send them out? Leach asked Holmes.
"Ultimately," she testified.
An exhibit has been admitted over Downey's foundation objection. We are waiting for it to be published.
“Exemplary reports from pharmaceutical partners," read a cover sheet.
Page 2. The Pfizer report, with the added logo Holmes admitted to placing.
Looks like the Schering Plough report is also attached
Holmes said she was aware of this going out to Rupert Murdoch.
Page 2. The Pfizer report, with the added logo Holmes admitted to placing.
Looks like the Schering Plough report is also attached
Holmes said she was aware of this going out to Rupert Murdoch.
"Prior to 2015 you understood the FDA did not approve the MiniLab in any way shape or fashion?" Leach asked
"Correct," Holmes said.
"Correct," Holmes said.
Holmes testified Theranos wasn't performing any LDT's in 2011 or 2012.
LDT= lab developed test
LDT= lab developed test
April 4, 2013 email from Balwani congratulating his team on a succesfull inspection
Before you're doing any LDT testing in the CLIA lab? Leach asked
Holmes agreed
Before you're doing any LDT testing in the CLIA lab? Leach asked
Holmes agreed
"I don't remember, but I don't doubt you," Holmes said to Leach about an LDT report evaluated by an inspector, which she said was not from the Edison.
You have no reason to believe the inspector actually saw the device during that 2013 inspection, Leach asked
You have no reason to believe the inspector actually saw the device during that 2013 inspection, Leach asked
You don’t recall Surekha Gangakhedkar coming to you in sept 2013 and saying Theranos isn’t ready?
I do not
I do not
Do you deny you told her that Theranos didn’t have much of a choice... a promise to deliver to the customer?
I don’t remember saying that, but that’s something I could have said.
I don’t remember saying that, but that’s something I could have said.
You don’t dispute that Adam Rosendorff told you in the fall of 2014 he was being asked to vouch for results he was not confident in?
I remember that email.
I remember that email.
We're looking at it
Nov. 13, 2014
"I feel really uncomfortable with the what is happening right in this company," Rosendorff began.
Holmes confirmed this is the email she was talking about.
Nov. 13, 2014
"I feel really uncomfortable with the what is happening right in this company," Rosendorff began.
Holmes confirmed this is the email she was talking about.
Subject of chain is Ebola, as leach pointed out.
"I am hearing that Theranos intends to test samples to rule out or diagnose Ebola at 7373 Gateway," Rosendorff wrote.
"That is not correct. Who said this?" Holmes replied.
"I am hearing that Theranos intends to test samples to rule out or diagnose Ebola at 7373 Gateway," Rosendorff wrote.
"That is not correct. Who said this?" Holmes replied.
Perhaps a company wide email is in order to quash this rumor? Rosendorff continued
No one at any of our other sites is under this impression, Holmes replied.
No one at any of our other sites is under this impression, Holmes replied.
Theranos was doing a lot of work to deploy an ebola assay isn’t that right ms holmes? Leach asked
We were, Holmes said
We're getting a new exhibit...
We were, Holmes said
We're getting a new exhibit...
Email correspondence between Holmes and Bill Foege (former CDC director), which leach gets Holmes to confirm is regarding Ebola assay deployment
"We think it could also be useful in the infection triage and management," Holmes wrote.
"We think it could also be useful in the infection triage and management," Holmes wrote.
Another email chain between Holmes Foege, and others in Oct. 2014.
You had been seeking a grant to get money to conduct ebola testing but you were unsuccessful? Leach asked
Holmes said they were approached about a grant, but did not apply for it.
You had been seeking a grant to get money to conduct ebola testing but you were unsuccessful? Leach asked
Holmes said they were approached about a grant, but did not apply for it.
"
Elizabeth, i'm sorry this first venture did not work out," Foege wrote to holmes.
Elizabeth, i'm sorry this first venture did not work out," Foege wrote to holmes.
...You took steps to conceal from potential investors Theranos' reliance on venous draws? Leach asked
"No," Holmes said.
"No," Holmes said.
We looked at an email from Holmes' brother Christian, who she brought in to lead product management.
At this time, he was reporting to Balwani, Holmes said.
He is coordinating some finger stick tests with Balwani and Holmes for some VIPs Holmes met at the BDT conference
At this time, he was reporting to Balwani, Holmes said.
He is coordinating some finger stick tests with Balwani and Holmes for some VIPs Holmes met at the BDT conference
"Assumption here from EAH are that we must not do venous draw, and we cannot tell them that their order prompts venous if it does," Christian wrote.
Scenario 1) Scanned order from BDT VIP contains tests that prompt for venous draw
Scenario 2) Scanned order from BDT VIP contains tests we do not offer on our menu ( regardless of venous vs finger stick) but all other tests combine to prompt finger stick
Scenario 2) Scanned order from BDT VIP contains tests we do not offer on our menu ( regardless of venous vs finger stick) but all other tests combine to prompt finger stick
Lots of bullets under each scenario. Leach is highlighting some.
You wanted BDT to have a good exp in the wellness center
yes
you wanted to put your best foot forward?
yes
did bdt end up investing?
no.
You wanted BDT to have a good exp in the wellness center
yes
you wanted to put your best foot forward?
yes
did bdt end up investing?
no.
"Am I right, you told Safeway in or around June 2013, the miniLab or the device was what was going to be used in the CLIA lab?" Leach asked.
"I think so," Holmes said.
"I think so," Holmes said.
"In July of 2013 you made the decision to modify [Siemens] ADVIA machines to support the testing in the CLIA lab?" Leach asked
"Yes," Holmes said.
"Yes," Holmes said.
In a note from a June 26, 2013 meeting with Safeway we saw a Safeway rep write, "Contrary to impressions that some Safeway people had, there is no tech problem with the devices and no plan to go without the devices in the stores."
"The central lab contains the device; in fact, the device is the only way of obtaining results from the nanotainers," the rep continued.
Next question line from Leach is about a demo in 7/2013.
Holmes acknowledged she knew what the null protocol was.
Holmes is sent results, as Leach showed.
Holmes acknowledged she knew what the null protocol was.
Holmes is sent results, as Leach showed.
"I am concerned about the TSH values....to be conservative, I would remove all of these three results," Young wrote.
You never told Walgreens about issues theranos was having with its vitamin d assay?
i dont think so
You never told Walgreens about issues theranos was having with its vitamin d assay?
i dont think so
You didnt tell walgreens following this demo that theranos was having issues with its tt4 assay?
i dont think so
(Leach listed two other assays same answers)
i dont think so
(Leach listed two other assays same answers)
Leach asked if rather than tell Walgreens about these issues she elected to remove these results from the report.
"If Dr. Young was saying there was a concern about a result, we would not report the result," Holmes said, adding the team would investigate accordingly
"If Dr. Young was saying there was a concern about a result, we would not report the result," Holmes said, adding the team would investigate accordingly
You never told Walgreens following this July demo that Theranos was having issues
I don’t think so
I don’t think so
Now Leach is showing a presentation dated 7/11/2013, presumably shown at a Theranos + Walgreens meeting
The first page includes these logos, in this order:
Theranos -- Alliance Boots -- Walgreens
The first page includes these logos, in this order:
Theranos -- Alliance Boots -- Walgreens
Holmes confirmed this was the time period they were modifying third party machines.
"At no point in time did you tell Walgreens you were modifying Siemens machines to go forward with the launch?" Leach asked.
"We did not," Holmes said.
"At no point in time did you tell Walgreens you were modifying Siemens machines to go forward with the launch?" Leach asked.
"We did not," Holmes said.
Leach teases his next line:
"Do you recall being asked questions about Ian Gibbons?" he asked.
Holmes said based off information Gibbons provided her, she believed theranos could perform any test
"Do you recall being asked questions about Ian Gibbons?" he asked.
Holmes said based off information Gibbons provided her, she believed theranos could perform any test
But before he goes there, he is running through the Wag/boots/theranos powerpoint from 7/11/2013
Bullets from the slides shared with Walgreens in July 2013:
"All 2000+ currently run tests/CPT codes are available through theranos."
"Theranos runs any test available in central laboratories."
"All 2000+ currently run tests/CPT codes are available through theranos."
"Theranos runs any test available in central laboratories."
To Ian Gibbons:
Ian gibbons was one of the first employees at Theranos?
Very early
He left Theranos in 2010?
I don’t think so
He didn’t leave at any point between 2010 and 2013?
No
He passed away in 2013?
He did
Ian gibbons was one of the first employees at Theranos?
Very early
He left Theranos in 2010?
I don’t think so
He didn’t leave at any point between 2010 and 2013?
No
He passed away in 2013?
He did
As a result of the ian gibbons pres, "You understood that the 4 series could do any blood test?
yes
you didnt have a working 4 series at this point?
only prototypes
yes
you didnt have a working 4 series at this point?
only prototypes
Leach points out the use future tense in gibbons' slides.
"System 4.0 will be capable of performing any measurement required in a distributed test setting," read one bullet
"it's a vision of what's going to happen in the future?
"it's what we were doing in the lab, but yes."
"System 4.0 will be capable of performing any measurement required in a distributed test setting," read one bullet
"it's a vision of what's going to happen in the future?
"it's what we were doing in the lab, but yes."
"Size weight: TBD..." read another bullet from Gibbons slide
TBD means to be determined? Leach asked
TBD means to be determined? Leach asked
"I understood this was the beginning of affirming that we would be able to do it," Holmes said
"...wasn't this a proof of concept?" Leach asked.
"At this stage, the prototypes for sure...There was still work to be done," Holmes testified.
"...wasn't this a proof of concept?" Leach asked.
"At this stage, the prototypes for sure...There was still work to be done," Holmes testified.
Leach showed this slide. Drew Holmes attn to the 4th row.
He asked if the "Required" marking, meant IP was needed to turn this prototype into something workable.
"no," holmes replied.
He asked if the "Required" marking, meant IP was needed to turn this prototype into something workable.
"no," holmes replied.
Your testimony is from this you thought theranos could do any blood test?
You viewed this as a prototype?
yes
you didn't think you could go out and sell your prototype in feb 2010?
You viewed this as a prototype?
yes
you didn't think you could go out and sell your prototype in feb 2010?
Leach brings up that gibbons passed away in 2013.
Establishes that Rochelle gibbons, Ian's wife, was one of WSJ reporter John Carreyrou's sources.
Establishes that Rochelle gibbons, Ian's wife, was one of WSJ reporter John Carreyrou's sources.
Leach brought up Holmes first patent which was a subject of her direct examination
Holding a patent does not necessarily mean the invention described in the patent works?
Yes
For ex, you don’t have an ingestible pill which allows you to measure lipids in the blood?
Not yet
Holding a patent does not necessarily mean the invention described in the patent works?
Yes
For ex, you don’t have an ingestible pill which allows you to measure lipids in the blood?
Not yet
Taking our afternoon break - back in 30 ish!
We're back.
"Good afternoon Ms. Holmes."
"Good afternoon."
"Good afternoon Ms. Holmes."
"Good afternoon."
More on Ian Gibbons —
"Does this refresh your recollection that Dr. Ian Gibbons was frequently absent from work in the last years of his life?" Leach asked Holmes.
It did not
It did not
In his attempt to refresh holmes recollection, Leach suggested the language he had Holmes read was the language Theranos sent the WSJ
it did not refresh her recollection
it did not refresh her recollection
Leach brought up this study, he pointed out the accepted date of this article is in 2017.
He's going through more journal articles — not publishing them to the jury, but clarifying the dates.
"That was also two years after some of your investors started asking questions about what was going on with the tech?" He asked about one paper published in 2017
"yes."
"That was also two years after some of your investors started asking questions about what was going on with the tech?" He asked about one paper published in 2017
"yes."
"You came to the conclusion after reviewing the CMS report that Balwani was not the business man you thought he was,” you pushed him out of Theranos and your personal life. He asked if that was fair.
“Overall, yes.”
“Overall, yes.”
Leach asked if it was true in sept 2015, while the CMS inspection was going on, she was told that it was going badly.
"I was told around then, yes."
"I was told around then, yes."
Leach asked if Holmes took a corporate jet to Florida during the 9/2015 inspection, "to pick up some award."
"I don't know."
"I don't know."
Leach has docs — he asked if they refreshed Holmes memory that she took a corporate jet to Florida to pick up an award
She said it didn't.
Leach offered the doc into evidence. Judge paused for a long while he considered.
Downey and leach are now working out redactions.
She said it didn't.
Leach offered the doc into evidence. Judge paused for a long while he considered.
Downey and leach are now working out redactions.
Judge asks Leach to lay more foundation
Judge admits the pages leach offered.
Leach brought up an exit interview Holmes had with members of CMS, following the Nov. 2015 inspection.
He asked if Holmes remembers the CMS members telling her they were contemplating finding immediate jeopardy at theranos lab
"i'm not sure," she said.
He asked if Holmes remembers the CMS members telling her they were contemplating finding immediate jeopardy at theranos lab
"i'm not sure," she said.
He is working to refresh Holmes' recollection.
"i remember discussion of possible citations at that time," Holmes said, but said she did not remember an immediate jeopardy discussion.
"i remember discussion of possible citations at that time," Holmes said, but said she did not remember an immediate jeopardy discussion.
CMS report came out in Jan 2016, Leach said.
"By April of 2016 you had made the decision that Mr Balwani should leave the company?" he asked.
"Yes," she replied.
"Even after doing that you continued to minimize the CMS findings to lisa Peterson?"
"I don't think i did that"
"By April of 2016 you had made the decision that Mr Balwani should leave the company?" he asked.
"Yes," she replied.
"Even after doing that you continued to minimize the CMS findings to lisa Peterson?"
"I don't think i did that"
By April 2016 Sunny Balwani had been asked to leave the company, Leach elicits again.
He showed Holmes a doc, and asked if it refreshed her recollection that she told Peterson in regard to CMS "she would be shocked if sanctions were imposed,"
It did not.
He showed Holmes a doc, and asked if it refreshed her recollection that she told Peterson in regard to CMS "she would be shocked if sanctions were imposed,"
It did not.
Leach has no further questions.
With about an hour and a half left in the trial day, her attorney Kevin Downey is back on for redirect.
With about an hour and a half left in the trial day, her attorney Kevin Downey is back on for redirect.
"Were you told how many small sample tests theranos would have to develop in its clia minilab to develop [90ish] % of tests?" Downey began
"I was. I remember just over 40 tests was about 90% of the tests," Holmes replied.
"I was. I remember just over 40 tests was about 90% of the tests," Holmes replied.
What did you understand about the performance of Theranos clinical lab prior to the fall of 2015?
that it was excellent
What did balwani tell you about the performance of [Theranos clinical] lab prior to the fall of 2015?
that it was one of the best labs in the world.
that it was excellent
What did balwani tell you about the performance of [Theranos clinical] lab prior to the fall of 2015?
that it was one of the best labs in the world.
As between you and mr balwani who was responsible for the operational management of the lab
mr balwani
mr balwani
To Dr. Das - and the voiding of tests
"did you accept that decision?"
"I did"
"did you accept that decision?"
"I did"
Where was the clinical lab at Theranos located when you received that email from Dr. Rosendorff in 2014?
On Gateway Blvd in Newark CA.
(the email we were shown on cross about Ebola)
On Gateway Blvd in Newark CA.
(the email we were shown on cross about Ebola)
Was dr rosendorff asking you wehther the ebola samples were being tested at [that lab]?
he is
he is
Leach asked you repeatedly whether several people were made aware of those modified devices...Why had theranos done that instead of using its theranos analyzer in the clinical lab?
We needed a way to handle potentially 10s of thousands of samples coming in at the same time...
We needed a way to handle potentially 10s of thousands of samples coming in at the same time...
Did you share it with the board of directors
Yes
Did you share it with the FDA
Yes
Did you share it with cms in fall of 2013
Yes
(share that they were using third party machines)
Yes
Did you share it with the FDA
Yes
Did you share it with cms in fall of 2013
Yes
(share that they were using third party machines)
(third party MODIFIED machines)*
Downey is showing "anticipated payments" from Walgreens as of Sept. 5, 2013
35 mill
20 mill
20 mill
(To rebut leach's point that Theranos was in a bad cash position around that time, as suggested on cross)
35 mill
20 mill
20 mill
(To rebut leach's point that Theranos was in a bad cash position around that time, as suggested on cross)
Where would you get those financial projections
From Mr. Balwani
From Mr. Balwani
He asked her to explain her text to Balwani about getting comfortable w/ financials
"There was a meeting that I was going to do when sunny was traveling internationally…I was trying to say I could get myself comfortable w/ it if you don’t want to do this," Holmes explained.
"There was a meeting that I was going to do when sunny was traveling internationally…I was trying to say I could get myself comfortable w/ it if you don’t want to do this," Holmes explained.
I’m not sure if that actually happened, she continued
You could decide whether a presentation was sent or not sent to investors
Yes
Much of the content was prepared by others?
It was
For ex if there was scientific content in the reports who would prepare that?
Our scientists and engineers
Yes
Much of the content was prepared by others?
It was
For ex if there was scientific content in the reports who would prepare that?
Our scientists and engineers
W respect to any financial reports, were they always prepared by mr Balwani?
Yes
Yes
Downey moves to the report with the pfizer logo, which was sent to someone from Pfizer.
Did anyone at Pfizer have any reaction to this to your knowledge?
No i remember it being positive, That they were looking at the program we did with them
Did anyone at Pfizer have any reaction to this to your knowledge?
No i remember it being positive, That they were looking at the program we did with them
Now Downey is going through the GSK report which holmes said she assumed she also placed a logo on.
Holmes testified GSK put together the document, unlike the Pfizer report which was prepared by Theranos
Holmes testified GSK put together the document, unlike the Pfizer report which was prepared by Theranos
Downey shows the document was sent to Walgreens with the logo, as Leach did on cross.
Holmes said she asked the #theranos employee in this below email to send this report to Aiden Flynn of GSK.
It's published to the jurors screens
It's published to the jurors screens
We are now looking at the doc attached. It is the same one she transmitted to Walgreens in 2012, Holmes testified.
The email was sent on 3/2009.
Nobody at GSK conveyed to Holmes that it was inappropriate for her to affix the logo next to Theranos', she testified.
Nobody at GSK conveyed to Holmes that it was inappropriate for her to affix the logo next to Theranos', she testified.
Holmes wrote Dr. Breur of GSK in 12/2009.
There are some attachments including a presentation
Page 6 is labeled "Theranos & GSK"
"Gsk completed a comprehensive validation of Theranos systems in 2008," is a bullet
it's part of a ppt that she authorized to be sent to gsk
There are some attachments including a presentation
Page 6 is labeled "Theranos & GSK"
"Gsk completed a comprehensive validation of Theranos systems in 2008," is a bullet
it's part of a ppt that she authorized to be sent to gsk
Did anyone at gsk object or reflect any disagreement with that statement?
No.
No.
Downey brings up Leach's question line regarding the WSJ article, he brings up one response.
"You said that one of the things you were concerned about was that theranos had trade secrets that you thought you had to protect."
"You said that one of the things you were concerned about was that theranos had trade secrets that you thought you had to protect."
In 2010 or 2011:
"We had a huge amount of invention that was happening in our lab, we had teams of scientists that were coming up with ideas for patents and trade secrets and we needed to learn how to protect them," Holmes said.
"We had a huge amount of invention that was happening in our lab, we had teams of scientists that were coming up with ideas for patents and trade secrets and we needed to learn how to protect them," Holmes said.
ex: 15054
Holmes email on 4/9/2012 to David Doyle, a counsel at Theranos
Subject: Trade secret policy
"We need to create a concise doc on Theranos' trade secret policy for our team leads. In essence this doc should highlight the extra confidentiality procedures..," she wrote.
Holmes email on 4/9/2012 to David Doyle, a counsel at Theranos
Subject: Trade secret policy
"We need to create a concise doc on Theranos' trade secret policy for our team leads. In essence this doc should highlight the extra confidentiality procedures..," she wrote.
ex: 15055 (admitted)
5/2/2012
Email from Doyle to Holmes - appears he is sending her a draft of the doc she asked him to prepare
5/2/2012
Email from Doyle to Holmes - appears he is sending her a draft of the doc she asked him to prepare
"All, as you know there are few things Theranos values more than its IP. We vigorously pursue and enforce patent protection for our IP, wherever it makes sense to do so," Doyle wrote, as downey showed.
Doyle defines a trade secret which in part of a definition he writes, "[a trade secret] has economic value because it is not generally known (to the public or a competitor)," as downey read.
Other bullets downey highlighted from the trade secret policy draft:
-Protecting the physical security of theranos facilities and individual work stations
-protecting the security of theranos's electronic records, databases, computer applications and related communication
-Protecting the physical security of theranos facilities and individual work stations
-protecting the security of theranos's electronic records, databases, computer applications and related communication
He brought up Holmes' trade secret answer to Leach, "when you were getting qs about Theranos CLIA lab in 2015," as downey put.
Explain to us what the concern was, he asked her
Explain to us what the concern was, he asked her
"My concern was that if there was a public disclosure of this info we would lose the trade secret protection we had worked so hard to secure and protect for years prior to that point," she said.
Did you keep secret from investors the fact that there were aspects of Theranos business you couldn’t disclose to them b/c of the concern of trade secrets?
no
no
Downey pulls up a dec 12, 2014 email from investor Dan Mosley, who testified earlier in trial, and said he intro'd holmes' to many "high quality" families, as Mosley put.
In regard to a CNBC piece on Theranos, Mosley wrote, “I thought it was a positive piece although they spent to too much time speculating as to why your process and tech is being kept confidential, which should be obvious to anyone."
MR leach asked you whether you were aggressive in protecting the company's IP and you said yes...what did you mean
i meant we tried to take every step possible to protect the IP....it included making sure we had the right agreements w/ employees
i meant we tried to take every step possible to protect the IP....it included making sure we had the right agreements w/ employees
"I understood if we didn’t do it we'd lose trade secret protection and that would be devastating to the company," Holmes said, regarding pursuing employees legally who were potentially disclosing trade secrets
Holmes agreed it was necessary to protect the value of the company
Holmes agreed it was necessary to protect the value of the company
Downey moves to emails related to Tyler Shultz.
You have not seen him testify here?
I have not.
You have not seen him testify here?
I have not.
Downey's line:
-Dr. Young provided answers to Mr. Shultz' concerns
-issue died for a while
-...Then in april mr shultz raised an issue directly with you
-we looked at you asking dr young to get involved and try to understand the concerns mr shultz was raising
-Dr. Young provided answers to Mr. Shultz' concerns
-issue died for a while
-...Then in april mr shultz raised an issue directly with you
-we looked at you asking dr young to get involved and try to understand the concerns mr shultz was raising
-do you recall that dr young did provide email comms to you and mr balwani that addressed the concerns that mr shultz was raising?
Holmes agreed.
We are now looking at an email in the April 2014 chain
Holmes agreed.
We are now looking at an email in the April 2014 chain
In response to Shultz concerns about public statements about the company's accuracy, holmes wrote, “longitudinal power in the context of lab to lab variability."
Downey asked Holmes to explain that
Downey asked Holmes to explain that
"it meant that we were building a lab and miniLab that were being standardized," Holmes testified.
"That should help to show them the onset and progression of disease in ways you could not see if you had standardized tech and standardized labs that we were working to build."
"That should help to show them the onset and progression of disease in ways you could not see if you had standardized tech and standardized labs that we were working to build."
"[Tyler Shultz] makes it sound like something inappropriate is being done, which it is not," Young wrote to Holmes in an email, as Downey highlighted.
We looked at the draft of a stern email Balwani sent to Shultz — first reviewed and commented on by Holmes — as Leach showed on cross.
"Stronger- emphasize what he did first especially in light of my comments on accuracy below," Holmes wrote.
"Stronger- emphasize what he did first especially in light of my comments on accuracy below," Holmes wrote.
Downey highlights the comment on accuracy.
"Add pre-analytical error and variance point -- this is what WSJ and everyone else it talking about by the word 'accuracy'" Holmes wrote.
Is that a reference to the article that had run in sept 2013 written by joe rago? Downey asked
"It is," Holmes said.
Is that a reference to the article that had run in sept 2013 written by joe rago? Downey asked
"It is," Holmes said.
Downey turns to Erika Cheung, the other whistleblower who testified towards the start of the trial.
Holmes did not know Cheung nor that she raised any concerns about quality and testing while she was at theranos, she testified.
Holmes did not know Cheung nor that she raised any concerns about quality and testing while she was at theranos, she testified.
He brings up the letter Leach showed on cross, which Theranos counsel sent to Cheung, on Holmes command
When you learned ms cheung was having convos about theranos and what you believed to be confidential info, was the first reaction you had to have a lawyer send her a letter?
No
Holmes had HR reach out to cheung "multiple" times first. Cheung didn't respond, Holmes testified.
No
Holmes had HR reach out to cheung "multiple" times first. Cheung didn't respond, Holmes testified.
Downey moves to the Theranos board of directors, and a July 2015 meeting.
We're looked at the agenda for the meeting.
Activities are scheduled from July 13-July 14
Page 12:
Chartering the Board of Counselors
-duty of loyalty
-strategic input
-term
-board committee structure and current reduction in size
Activities are scheduled from July 13-July 14
Page 12:
Chartering the Board of Counselors
-duty of loyalty
-strategic input
-term
-board committee structure and current reduction in size
Mr leach, also asked you about general Mattis resignation from theranos in 2016, do you remember that?
I do
Did you have an understanding why Mattis resigned.
yes
did you continue to speak with mattis after he left the board in 2016
i did
I do
Did you have an understanding why Mattis resigned.
yes
did you continue to speak with mattis after he left the board in 2016
i did
Ex: 15061
A series of emails about the departure of Gen. Mattis as a director, Holmes testified.
A series of emails about the departure of Gen. Mattis as a director, Holmes testified.
Dec. 6, 2016 email from Mattis to Holmes, as Downey showed and read out loud.
"Due to my status of pending nomination and possibly going into a confirmation process, i need to recuse myself from the board meeting. Sorry," Mattis wrote.
"Due to my status of pending nomination and possibly going into a confirmation process, i need to recuse myself from the board meeting. Sorry," Mattis wrote.
3 minutes left. Downey is still asking Q's
Downey brought up the website language, and the advice that Holmes received from counsel about what they should or should not say.
Who was responsible for [incorporating the changes]?
There was a team of project managers and other people in the company..., holmes said.
Who was responsible for [incorporating the changes]?
There was a team of project managers and other people in the company..., holmes said.
Done for the day. Judge does not let Downey proceed with his next set of questions addressing the texts Leach showed (of which the prosecutor spent hours on during cross)
"I only have about a half an hour or so," Downey said of his redirect of Holmes.
Davila asked about other witnesses. Downey did not commit.
"We'll see where we are," he said.
Davila asked about other witnesses. Downey did not commit.
"We'll see where we are," he said.
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