Theranos CEO, on stand, defends ‘big idea’
Elizabeth Holmes, ex-CEO of failed blood-testing startup Theranos, took the stand on Monday for the second time at her trial as she battled government fraud charges.
Holmes has pleaded not guilty to misleading investors and patients, who believed the blood-testing startup she founded as a 19-year-old could revolutionize health care. She faces up to 20 years in prison if found guilty.
Holmes’ first day of testimony was Friday, after prosecutors rested their case after calling 29 witnesses.
Following an unexplained hour-and-a-half delay on Monday, Holmes took the stand wearing a blue dress and black blazer, arguing that she believed in the potential of Theranos’ technology, with a goal of testing from only a few drops of patients’ blood and automating results.
“We thought this was a really big idea,” Holmes said as she recounted the company’s early years.
Crowds had dwindled as the trial ground through more than two months of testimony from witnesses for the government, spanning scientific details from former Theranos lab directors and appearances by retired general and former Secretary of Defense James Mattis and former Safeway CEO Steven Burd, whose failed partnership with Theranos cost the grocery chain $400 million, prosecutors alleged.
But with Holmes set to testify again on Monday, a predawn line formed outside the Robert F. Peckham Federal Building in San Jose, and the courtroom and overflow room were full.
One of the court’s audience members on Monday was former Wall Street Journal reporter John Carreyrou, who exposed Theranos’ flawed blood testing in 2015 and later wrote the best-selling book “Bad Blood.”
Holmes pushed back on allegations that the company had no viable technology, saying Theranos partnered with pharmaceutical companies and conducted clinical studies. The defense showed reports produced by Theranos from 2008 to 2010 that said Theranos’ Edison machines were performing tests well: “Results have been excellent” and “results have been precise,” according to two reports.
Holmes said she concluded in 2008 that Theranos’ technology “was performing in a way that was excellent in clinical sites.”
Former scientists from Pfizer and Schering-Plough, now part of Merck, said in earlier testimony that both companies declined to partner with Theranos. They said their companies had not put their own logos or approved their use on reports Theranos showed to potential investors and partners that bore those logos, falsely suggesting the two pharmaceutical giants had endorsed Theranos.
Holmes lawyer Kevin Downey didn’t address the allegations directly, but displayed emails on Monday that showed discussions with Pfizer and Schering-Plough about potential future partnerships, which never materialized.
Holmes recalled working with the U.S. military, studying whether blood testing could predict post-traumatic stress disorder and other illnesses, but no partnerships ever happened. Mattis previously said he personally invested $85,000 in the failed startup, which dissolved in 2018, though Downey showed a document that Mattis was paid $150,000 a year as a board member.
Prior to the trial, Holmes’ lawyers filed documents indicating that she intends to blame both Theranos’ misconduct and “intimate partner abuse” on former Theranos president Ramesh “Sunny” Balwani, whom she dated. Balwani’s lawyer has strongly denied the claims, and his separate trial is scheduled for early next year.
Holmes didn’t address the claims Monday and is expected to continue testifying on Tuesday.