SAN JOSE, California – What Theranos a small start-up struggling to meet the requirements of working with large, demanding and powerful corporations? Or did Elizabeth Holmes, the former chief executive of the blood testing company, mislead and deceive these companies to get money?

This debate was the focus of Mrs Holmes’ sixth week testimony Fraud process in San José. She is charged with 12 counts of fraud and conspiracy to commit fraud. Her partner in business and romance, Ramesh Balwani, has also been charged and will be tried separately next year. Neither of them pleaded guilty.

Here are the lessons learned from this week’s procedure:

Steve Burd, a former CEO of Safeway, testified that Ms. Holmes led him to believe that Theranos’ machines could perform hundreds of blood tests on a drop of blood quickly, accurately and cheaply. Mr Burd said he had been attracted to the potential new line of business and that Safeway had partnered to put Theranos machines in its grocery stores and spent $ 275 million to remodel the stores to house the testing centers.

But in emails, Mr. Burd became increasingly frustrated with Ms. Holmes and Theranos.

“I want to help, but you make it difficult for yourself,” he wrote in one. In another, after remembering being discouraged only once in the past 62 years, he added, “That is, I am approaching my second event.” Another’s topic was simply “getting discouraged.” The partnership broke up after repeated delays from Theranos, said Mr Burd.

Wade Miquelon and Nimesh Jhaveri, two former Walgreens managers, shared a similar story. Under a partnership agreement, Walgreens agreed to pay Ms. Holmes’ company an “innovation fee” of $ 100 million and invested $ 40 million in securities that could be converted into equity.

Walgreens stopped offering Theranos tests in 2016, and the two-year test results were ultimately invalidated.

Prosecutors presented one of the incriminating documents that were previewed at the beginning of the trial.

In opening statements, Robert Leach, an assistant US attorney who ran the prosecution, said Theranos had one 55 page report which prominently featured the logos of pharmaceutical manufacturers such as GlaxoSmithKline, Pfizer and Schering-Plow and seemed to validate Theranos’ technology. Theranos used the report to solicit investment.

One problem: The drug companies did not draft, approve, or agree to the conclusions of the report, Leach said. The word “institute” was misspelled on one side.

Mr Miquelon said Walgreens reviewed the document as part of its due diligence on Theranos and believed that pharmaceutical companies approved its technology.

“My assumption was that both parties agreed to what was written,” Miquelon said of the report.

The jury recently spent six days hearing from the former Theranos laboratory director Adam Rosendorffwho testified about his work on highly technical elements of blood testing. The job required long hours, a thorough understanding of the science behind the tests, and frequent communication with executives, doctors and patients, he said. Dr. Rosendorff left Theranos’ laboratory practices and posted damning information to the Wall Street Journal.

He was replaced by a dermatologist.

Dr. Sunil Dhawan, who met legal requirements as a laboratory manager but had no specialization in pathology or laboratory science, was recruited for the role by Mr. Balwani, who had been his patient for nearly 15 years.

Dr. Dhawan testified this week that he worked a total of five to ten hours for Theranos between November 2014 and summer 2015 and went to the Silicon Valley office twice. He said he never interacted with patients, doctors, or Theranos lab workers.

Lance Wade, Ms. Holmes’ attorney, argued that Dr. Dhawan was “there as needed” and delegated his responsibilities to the full-time staff of Theranos.

In a separate Zoom hearing on Thursday, Ms. Holmes’ attorneys opposed two reporters covering Theranos.

In one case, Judge Nathanael granted cousins ​​John Carreyrou, the reporter who first exposed Theranos’ problems in the Wall Street Journal, Access to the courtroom. Mrs Holmes has listed Mr Carreyrou as a possible witness, which would normally prevent him from hearing testimony.

His lawyer advocated an exception, saying Ms. Holmes had listed Mr. Carreyrou to keep him out of the courtroom out of “bad faith” and “animus”. John Cline, Mrs. Holmes’ attorney, declined to say whether the defense would call Mr. Carreyrou as a witness.

Separately, Judge Cousins ​​ordered that Roger Parloff, a former Fortune reporter, not have to turn his report notes over to the defense. Mr. Parloff wrote the first cover story about Mrs. Holmes and a follow-up article using the words she had misled him.

Mr Cline said the defense wanted to use Mr Parloff’s recordings to show the jury that he was biased. Judge Cousins ​​called the defense steps “a fishing expedition”.



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