Elizabeth Holmes says she had faith in Theranos’s early studies
The Theranos founder Elizabeth Holmes completed a second day of testimony in her own defense, in a widely followed fraud trial that could have major implications for Silicon Valley.
Flanked by her mother and partner Billy Evans, Holmes brusquely walked into the federal courthouse in San Jose, California, past throngs of journalists who had been waiting since the early morning hours to chronicle one of the most high-profile trials the tech world has seen in decades.
She faces up to 20 years in prison for allegedly defrauding investors and patients after her company’s blood-testing devices failed to deliver on ambitious promises to perform hundreds of health tests using just a drop of blood. Holmes, 37, has pleaded not guilty.
In her testimony on Monday, Holmes primarily focused on her understanding at the time that Theranos’s technology was more accurate than it was due to the company’s early trials.
The defense introduced studies of Theranos’s blood-testing machines that showed favorable results for the company, including research from big-name pharmaceutical firms such as Pfizer, Novartis and AstraZeneca. Holmes said she took the studies to mean the devices had been vetted.
One study, conducted by Stanford University, concluded the blood devices had found “very clear patterns of disease progression, remission and effects of therapies are apparent”.
Holmes said that at the time the numbers meant “our system was working well”. Other studies referenced by the defense included one conducted by Schering-Plough (a pharmaceutical firm that later became Merck) and Pfizer.
The judge instructed the jury to note that the evidence speaks not to whether the technology was, in fact, accurate but to Holmes’ “state of mind” at the time.
Holmes spoke for nearly two hours
before court adjourned for the day. She will resume her examination on Tuesday morning.
The prosecution rested its case against Holmes on Friday afternoon, and in the 11 preceding weeks argued to the jury that the former CEO had intentionally misrepresented the capabilities of the company’s technology, raising millions of dollars in funding on false promises. Federal attorneys questioned former Theranos employees, investors and patients on the failures of the devices.
Theranos lab directors called by prosecutors testified that their concerns over the technology’s shortcomings were largely ignored. Meanwhile, former investors said they were discouraged from scrutinizing the company but felt pressured to invest for fear of missing out on the next big Silicon Valley unicorn. In one of the more shocking revelations of the trial, the prosecution alleged Theranos published forged documents with the Pfizer logo to imply the drug company’s support.
The decision from Holmes to take the stand came largely as a surprise, since it opens her to risky questioning from prosecutors over possible inconsistencies in her numerous public statements.
In her first day of testimony on Friday, Holmes recounted her early years as a student at Stanford University and her interest in disease detection, culminating in her decision to drop out of college at age 19 and found the startup later known as Theranos.
Lawyers for the defense have indicated they would continue for at least several more days. The trial is anticipated to run into December.