SAN JOSE, Calif .– Elizabeth Holmes, the founder of failed blood test startup Theranos, spoke for a fourth day Monday to defend herself in a fraud lawsuit that has been touted as a test of pride in the start-up and hype.
Ms Holmes faces 11 counts of defrauding patients, doctors and investors by lying to them about Theranos’ technology and business relationships. She pleaded not guilty.
Before Theranos collapsed, he was a Silicon Valley darling who promised to revolutionize healthcare through cheaper, simpler blood tests that only took a few drops of blood. Ms. Holmes has raised nearly $ 1 billion from investors and has been touted as the next Steve Jobs. But a 2015 Wall Street Journal investigation found that Theranos’ blood test technology wasn’t working, and the startup collapsed.
In the first 11 weeks of Ms Holmes’ trial, prosecutors called 29 witnesses. They said Ms Holmes and Theranos falsified reports, concealed the use of third-party blood testing devices, falsified technology demonstrations and exaggerated the company’s marketing claims.
To rebut those arguments, Ms Holmes, 37, spoke on November 19. In her early days of testifying, she blamed others, said she was a firm believer in Theranos technology, and claimed her decisions were misunderstood. Kevin Downey, Ms Holmes’ attorney, described his client as a well-meaning entrepreneur whose actions to protect his business were misrepresented by prosecutors as fraud.
Here is what happened in Ms Holmes’ testimony:
Falsified validation reports
A key moment in the trial occurred on the third day of Ms Holmes ‘testimony, when she said she personally added logos of drug companies to Theranos’ reports, which were then used to persuade investors and partners to work with his start-up.
Prosecutors have withheld the reports as evidence Ms Holmes lied about Theranos’ prospects. The reports bore the logos of drugmakers Pfizer and Schering-Plow, although neither company was involved in preparing or approving the reports and both advised against using Theranos technology.
In her testimony, Ms. Holmes said she added the logos of the drug companies to the reports “because this work was done in partnership with these companies and I was trying to get it across.” She argued that she had no intention of deceiving anyone and that she would have done things differently if she had known that investors and partners would view the logos as endorsements by the manufacturers of medications.
Deflect the blame
Ms Holmes spent much of her testimony claiming that other people at Theranos were responsible for the company’s shortcomings.
She said Adam Rosendorff, director of the laboratory at Theranos, was in charge of the clinical lab and that a vice president, Daniel Young, was in charge of a partnership with drugstore chain Walgreens. She also highlighted the experience of her star-studded board, hinting that they should have given her better advice.
Ms. Holmes’ understanding of Theranos technology was that “it worked fine,” she said.
When Mr. Downey referred to a study by scientists at Johns Hopkins University that concluded that Theranos technology was ânew and strong,â Ms. Holmes said, âOur team was really excited about this. He was one of the best laboratory experts in the world.
Establish the intention
To convict Ms Holmes, the prosecution must prove that she intended to commit fraud. At the stand, Ms Holmes has always said she had no intention of cheating on anyone.
She said she concealed Theranos’ use of third-party devices – one of the prosecution’s main allegations against her – because she feared others would copy the modifications Theranos made to those devices. . She also said that her intention was not to hide that Theranos’ own machines couldn’t do as many tests as she claimed.
âIt was an invention that we understood from our lawyer that we had to protect as a trade secret,â Ms. Holmes said.
She added that Theranos’ marketing claims were aimed at establishing the startup’s brand distinct from that of its bigger partners. Ms Holmes said she made the claims on the advice of well-known advertising agency TBWA Chiat Day and did not endorse any documents she felt were inaccurate.
On Monday, Ms Holmes said she had “absolutely not” told Theranos lab staff to hide anything about the startup during a 2013 inspection by regulators.