Thus concludes the Theranos trial action for the week. The trial is on recess on Friday, will be back on Tuesday.
He continues: “I’ve had the privilege of meeting four U.S. presidents. When the president is in the room — let me tell you, the president owns the room. No one talks unless spoken to. Her style was warm, it was friendly. It wasn’t dictatorial.”
Burd is highly complimentary of Holmes. “Not all C.E.O.s are alike. She would rise to the top of the pile in terms of vision, in terms of command of the information, clearly in terms of delivery. She was always decisive.” “Whenever she was talking she owned the room.”
Safeway initially negotiated an $85 million partnership with Theranos, including investing $30 million to install labs in its stores, which he said turned out to be a low estimate. The deal was negotiated directly with Holmes with no lawyers, which Burd found was unusual.
Now discussing convertible equity notes! Isn’t this is so much more fun than chemiluminescence and assays. 📈
Erin Griffith Ooooooooh I think we just got our first mention of EBITDA in the trial, I can see the thrill of learning about accounting on the faces of these jurors.
Erin Griffith For some reason he is talking about a strain of watermelon called a Pureheart that has a very small rind that Safeway sold exclusively for a year. 🍉
Erin Griffith Rosendorff’s testimony is finally over. Steve Burd, the C.E.O. of Safeway for 20 years until 2013, is now testifying. When he heard about Theranos he was “immediately interested in meeting Theranos, particularly the founder.” “It was a fascinating concept.”
Erin Griffith Defense counsel Wade is almost giddy to argue that prosecution asked Dr. Rosendorff to compare issues at Theranos to other labs he worked at. Defense should be allowed to bring up other investigations at labs the Rosendorff later worked at, he says. Judge Davila says no, that would be a separate “mini trial.” He adds, “I think it may actually enhance the damage you’re seeking to avoid but, hey, it’s your case.”
Erin Griffith Regarding the accusation that he stole trade secrets by emailing himself files, prosecution asks, “Based on what you know about Theranos’s methods, would you have wanted other labs to use those methods?” “No.”
Erin Griffith For the last hour we’ve been hearing redirect on Dr. Rosendorff. For those counting, this is Day 6 of his testimony. The reason he left Theranos: “It was about patient care and my integrity as a physician.”
Erin Griffith Now the alternate has similar concerns, saying English is not her first language and is concerned she “could make a mistake in something.” “It’s her future.” The judge does not seem to be having this one.
Erin Griffith The juror said she doesn’t believe in punishment and has been increasingly haunted by the thought of having a role in sending someone to jail. Not surprisingly, prosecution was in favor of dismissing her.
Erin Griffith I’m starting to feel like an Oompa Loompa watching the jurors drop out from the sidelines here, maybe the press corps will put together a little song and dance.
Erin Griffith 💉 U.S. v. Holmes, Day 12 of ~2384972: We have dismissed a juror who says her views as a Buddhist will make it impossible for her to vote to convict. Three of five alternates remain. Later today Steven Burd, the former C.E.O. of Safeway, will testify.
Erin Griffith QC failure, immulite reagents, clia lab, advia, HCG, PSC, assays, vacutainers, nanotainers, we are nearing the end of Day 5 of Dr. Rosendorff’s testimony and so very deep in the blood testing weeds please send help
Erin Griffith Judge Davila now says that defense has had four days to challenge Rosendorff’s testimony and says “You have challenged his confidence.” Allows defense to question about Rosendorff’s work post-Theranos, says to “probe lightly” to avoid liability or impeding his future career.
Erin Griffith Interesting style of questioning asking the witness “You don’t recall those times when you lied and again and again?” “…No sir?”
Erin Griffith Rosendorff sent himself a bunch of internal Theranos emails before he left. Wade accuses him of stealing trade secrets and violating HIPAA with patient data.
Erin Griffith Wade continues to drive at the point that Dr. Rosendorff left Theranos for more money and the reason he expressed concerns about its lab results and asked to be removed from its Clia lab was to start his new job sooner.
Erin Griffith Now Wade is trying to use Rosendorff’s resignation email — the fakest email any employee ever writes — against him. “You wrote that it was a ‘tremendous experience’ and you ‘appreciated the opportunity to work with so many talented individuals’” Gotcha!
Erin Griffith Wade is trying to make a big deal about how Dr. Rosendorff’s next job after Theranos paid him more. Dr. Rosendorff is not having it. “I wanted to join a reputable company whose mission I believed in.”
Erin Griffith Defense shows a résumé Rosendorff was sending around and points out that he said he did great work at Theranos. Rosendorff: “I don’t know if you’ve ever tried to apply for a job but it doesn’t serve you” to discuss “fraudulent activity.” Defense strikes his answer.
Erin Griffith Dr. Rosendorff was also looking at other jobs before Theranos ever launched. Defense: “You essentially had a foot out the door the whole time?” “On occasion I would look at what other jobs were available.”
Erin Griffith Back from a break. Defense asking Dr. Rosendorff about his departure from Theranos. Defense points out that Rosendorff was considering filing a qui tam lawsuit against Theranos, to alert the government of wrongdoing (and get a percent of the money recovered).
Erin Griffith Defense counsel Wade reads from a deposition in which Rosendorff appears to contradict his testimony about the frequency of problems at Theranos labs. “Problems come up in labs — every lab in America, probably every lab in the world — is not going to perfect, correct?” “Yes”
Erin Griffith Binder hijinks. While flipping through all the various emails Rosendorff asks someone to help him with the binder because “it’s just opened up and it’s just [hand wave motion] pages everywhere.”
Erin Griffith In the meantime Roger Parloff has filed a declaration opposing defense’s push to compel him to turn over his notes in reporting the 2014 Fortune cover story about Holmes and Theranos. He already provided both sides recordings of his on-record interviews with Holmes and Balwani.
Erin Griffith Rosendorff takes off his glasses and rubs his eyes as Wade cycles through various forms showing his signoff on assay validation from 2013.
Erin Griffith The intended takeaway from the line of questioning, as far as I can tell, is that some tests at Theranos at some point did work and that when there were problems, many people at Theranos tried to fix them.
Erin Griffith Lance Wade, defense counsel, has resumed his aggressive questioning of Dr. Rosendorff, getting deeply into the weeds on his role in setting Theranos’s lab policies and QC testing with various emails.
Erin Griffith Judge Davila responds with a light dig against defense: “A couple of blue suits sitting next to them in a judge’s chambers, what could be intimidating about that?” 👔
Erin Griffith A media coalition (including NYT) has argued to unseal the juror questionnaires since we had little visibility into the final selection process. The judge plans to privately question each juror about what they might want to redact and defense says they want to be there, to which the judge responds that that would be unnecessarily intimidating. Defense disagrees.
Erin Griffith Judge Davila said a journalist contacted a doctor who contacted the court clerk to point out that one of the defense’s exhibits included a patient’s real name, which is a HIPAA violation.
Erin Griffith Holmes is here of course with Billy Evans, her mom and an older man I can’t ID. Before the jury arrives, the lawyers are arguing about whether they can discuss problems at companies that Dr. Rosendorff worked for after Theranos.
Erin Griffith 🩸 Back in the courtroom for U.S. v. Holmes. 🩸 The clerk is checking courtroom tickets after a few book clubs showed up last week. Cross-examination of ex-lab director Adam Rosendorff continues.
Erin Woo With that, we’re breaking for the weekend. Court will resume on Tuesday.
Erin Woo The government asks how long Wade is going to take with cross-examination, given that they have out-of-state witnesses they want to call next. Wade says he expects it’ll take all day Tuesday. (As a reminder, the public does not typically get information on what witnesses are coming next.)
Erin Woo 7/19/14 email from Rosendorff to Balwani defending Theranos’s tests in response to physician complaints. “I was emphatic with Dr. Chen about our rigorous validation and quality process,” Rosendorff wrote. He testifies that he believed this at the time.
Erin Woo With five minutes left before we’re scheduled to break for the weekend, we are now discussing customer service. Rosendorff notes that by the time complaints were escalated to him, they were usually serious issues.
Erin Woo Wade really hammering home this point on outlier removal (which makes sense — this is something that came up a lot in previous testimony as an example of Theranos manipulating results).
Erin Woo Wade is pressing Rosendorff to say he approved of this. “I thought it was unusual,” Rosendorff said. After reminding Rosendorff of what he said in his deposition, Rosendorff concedes that he approved it.
Erin Woo Now onto something called the “six tip policy,” where there are six results from one sample. Two results can be discarded, and you average the other four. Young developed this process. Rosendorff says there was no formal SOP about outlier detection.
Erin Woo 6/4/14 email from Young, saying that they’re holding the results of a study after speaking with Rosendorff — presumably supporting Wade’s line that Rosendorff is now in the loop.
Erin Woo In a 6/4/14 email from Rosendorff, he wrote a HCG plan for Balwani and Young which said HCG should switch to vacutainer draws and run on immulite. Wade notes that Rosendorff is “in the loop now.”
Erin Woo Young replies that he updated Adam over the weekend and agrees that “they should be running all decisions by Adam.”
Erin Woo Looking at 6/3/14 email from Balwani to Young: “Adam came by my office EXTREMELY frustrated that as a lab director he is not being kept in the loop.” “This information has to go through him. … Can you guys please touch base with Adam so he is in the loop,” Balwani adds.
Erin Woo Wade asks if Rosendorff stands by his testimony that he didn’t meet with Holmes about HCG in this time period. Rosendorff says yes.
Erin Woo 5/30/14: email from Holmes’s assistant where she writes that “Elizabeth has asked me to coordinate a CLIA meeting for this afternoon at 4 p.m.”
Erin Woo Now seeing Holmes’ calendar for 5/29/14, where she has “meeting with Adam Rosendorff” listed. Rosendorff had testified that he had not met with Holmes.
Erin Woo We’re now building a timeline being shown to the jury about HCG issues, including various emails and exhibits.
Erin Woo Wade had Rosendorff confirm that he testified Holmes was less concerned than he was about the HCG issues. Then, he showed a 4:45 p.m. email forwarded from Balwani to Holmes about HCG issues. Holmes responded six minutes later, asking, “How did that happen?” Wade then moves on.
Erin Woo We’re back from break and switching gears to talk about HCG, the pregnancy test.
Erin Woo On 10/15/14, Balwani offers another meeting, but Rosendorff’s response indicates that he doesn’t need the other meeting.
Erin Woo Wade now discussing how Daniel Young sent a draft Q.C. policy ahead of the meeting, even though that was Rosendorff’s responsibility. Wade also notes that there were no restrictions on what Rosendorff could discuss during the meeting.
Erin Woo Wade is also trying to show that Theranos DID take Rosendorff’s concerns seriously. On 10/9/14, Balwani emailed Rosendorff, setting up a meeting to discuss his concerns. Balwani tried to set it up for the next day, but Rosendorff asked for it to be delayed.
Erin Woo In today’s cross-examination, Wade seems to be trying to poke holes in Rosendorff’s credibility — pointing out times when he was slow to respond to doctors, and noting that there was an AAP in place for proficiency testing, contrary to the impression given in previous testimony.
Erin Woo Wade asks if anything was going on to make Rosendorff slow to respond. Rosendorff: “I was becoming frustrated at my inability to explain discrepant results.” Wade presses him that he just needed to call the doctor back.
Erin Woo We’re now seeing another email from a doctor saying he’s waiting for a callback from Rosendorff. Wade makes the point that this is the second time a week had passed before returning a doctor’s call. Rosendorff says he had already spoken with him and didn’t realize another call was needed.
Erin Woo Email from Rosendorff after talking to the doctor: The doctor is “puzzled” about the results, but “the MD is extremely positive and excited about Theranos and wants us to ‘crush Quest Diagnostics.’”
Erin Woo There’s a 10/10/14 email from a customer service rep to Christian Holmes about a patient who redid her labs at Stanford and got very different results. Christian responds to say they’ll repeat the tests and loop Rosendorff in. Rosendorff was looped in as instructed, but now there’s a followup email to Rosendorff! A week had gone by, and he hadn’t returned the phone call about the patient.
Erin Woo So far this morning, Wade’s cross has consisted of going through email chains discussing proficiency testing, seemingly to establish that Theranos did have a rigorous proficiency testing protocol in place.
Erin Woo We’re starting off with proficiency testing. Wade gets Rosendorff to agree that he did write a standard operating policy for an alternative assessment protocol for proficiency testing.
Erin Woo Court is in session for the fourth (!!) day of testimony by the former Theranos lab director Adam Rosendorff. (This is the longest any witness has been on the stand thus far.)
Erin Woo There is no redirect, and Sung has been dismissed. Court is on recess until Friday.
Erin Woo The defense ended on the contract between Celgene and Theranos. Cline said that all of the “success milestones” were achieved, and payments were made, although Sung said she didn’t have direct knowledge of the payment.
Erin Woo John Cline is doing the cross-examination for the defense. He’s starting by going back through the chronology we covered in direct.
Erin Woo And now we’re onto cross! This was a very fast direct examination.
Erin Woo Sung did not tell anyone that Celgene had comprehensively validated Theranos’s technology.
Erin Woo 4/2/12 email from Sung to Daniel Edlin, with Holmes and Young copied. “We thought it would be great to keep her in the loop and aware of ongoing activities,” Sung said. The email says Celgene “had decided to simply wait until your next-gen machines are ready and then deploy them”
Erin Woo In more bad news for Theranos, mean concentration profiles were not consistent between Theranos and QPS, and concentration variability was higher with Theranos than with QPS method. Once again, Sung confirms that concentration variability is undesirable.
Erin Woo We’re looking at a scatter plot showing the range where Theranos tests should fall. Most of them … do not fall within this range. 67% of samples had >25% difference in serum concentration between Theranos and QPS method. “It’s not good news” for Theranos, Sung said.
Erin Woo Theranos whole blood data showed more fluctuations, which Sung said was undesirable.
Erin Woo Theranos also had higher variability. Government asked if that was good or bad. Sung chuckled and replied: “Bad.”
Erin Woo 14.1% of Theranos samples didn’t have usable results, compared to less than 2% for QPS.
Erin Woo We can see a comparison between Theranos and QPS assays. Theranos only used .25mL of blood compared to 2mL for QPS. Theranos also used whole blood rather than serum, which Sung said was “very nice.”
Erin Woo 7/20/10 email from Sung to Holmes saying they weren’t able to validate Theranos’s tests. The results were “close” in some cases but not good enough.
Erin Woo She had visited Theranos and thinks she met Holmes while she was there. She saw a Theranos device while she was there and said it looked like an oven. The idea you could do something so small and efficient on site was a “great idea,” she thought at the time.
Erin Woo Celgene entered into an arrangement with Theranos. Her understanding was that Theranos was developing a platform to analyze the endpoints. She thought they could do it efficiently with a very small amount of blood, which would be a “huge advantage.”
Erin Woo We’re starting her testimony in 2009, when she worked on a drug called ACE-011 being developed for treatment of anemia and bone loss. Her role was to suggest proteins in the blood to measure that would suggest whether the drug was working (e.g., hormones).
Erin Woo Dr. Sung got a Ph.D at Georgetown and then did a postdoc at Stanford before going into industry. She worked in various biotech firms, including Celgene, which was later bought by Bristol Myers Squibb. She’ll be testifying about her work at Celgene.
Erin Woo We’re back in session. The government is calling Dr. Victoria Sung. (Rosendorff will pick up on Friday.)
Erin Woo After a long discussion of an email chain about proficiency testing, Rosendorff is done with testimony for today. (He has a conflict this afternoon.) We are going to take a 20 minute break and then pick up with a different witness for the rest of the afternoon.
Erin Woo Now looking at a document from the American Proficiency Institute that gives “Acceptable” scores to all of the proficiency tests.
Erin Woo Looking now at an email from Rosendorff: “We are continually doing proficiency testing.” Rosendorff testifies to clarify that this was predicate testing.
Erin Woo After looking at his 2016 testimony (in the binders!), Rosendorff says he still doesn’t remember telling the government that. “I assume the record is correct,” he says.
Erin Woo We’re now back to where we started yesterday, discussing Rosendorff’s contact with the government. Wade asks Rosendorff if he remembers telling the government that Theranos machines used alternative assessment proficiency to measure accuracy. Rosendorff says no.
Erin Woo Rosendorff previously testified there was no formal proficiency testing processes in place. After Wade challenges him, Rosendorff clarifies: There was proficiency testing for predicate testing (commercial tests), but not for Theranos tests
Erin Woo Looking at a quality systems presentation for 2014 from Langly Gee, Theranos’s quality control manager. Wade is showing failure rates for Edison quality control tests. “Something’s not squaring up,” Rosendorff says — these failure rates are lower than he thought they were.
Erin Woo Wade is continuing on this line of questioning, noting that Rosendorff testified about concerns in June 2014 but signed validation reports in Aug. and Sept. 2014.
Erin Woo Rosendorff testifies that he would not have continued signing validation reports for Theranos’s blood testing device, the Edison, if he thought it was unreliable.
Erin Woo We’re back from break! And on to another Edison validation report.
Erin Woo We’re going through a Sept. 2013 validation report on the Edison for TSH, a thyroid test. This document, with Rosendorff’s signature, validates the test for patient use. Wade is walking Rosendorff page by page through the report.
Erin Woo Rosendorff testifies that he never told the CLIA team to stop using the Edison test altogether, but did on some specific tests.
Erin Woo Wade is now noting that Rosendorff was among the highest-paid employees at Theranos. Rosendorff says that he thought he should have been paid more, given Theranos’s problems, but this is stricken from the record.
Erin Woo Rosendorff says he had concerns about QC. Wade says he was paid to have concerns. “That’s why you get paid the big bucks.” Rosendorff replies: “Not as big bucks as you get paid.” Cue the biggest laugh of the trial so far.
Erin Woo Wade is making a point he’s made before, that quality control samples aren’t patient samples — noting that “nothing bad happens” to patients if a QC test fails.
Erin Woo We are now on to a mid-Jan 2014 email from Rosendorff to the CLIA lab team asking them to refer to very detailed quality-control policies.
Erin Woo Balwani’s response: “I spoke with the teams today and they are all going to put in long hours and do whatever it takes to get this done tomorrow.” Rosendorff testifies: “I had many many battles with Sunny about what was needed versus what he was prepared to allow.”
Erin Woo Rosendorff added: “I do feel that it was very difficult to get answers from Daniel’s team.” In a later email, Rosendorff doubles down on needing the specificity studies: “No they are required. Very important in fact.”
Erin Woo From the email chain. Balwani: “As we know, we take these issues with seriousness. Why didn’t you raise these before to me when I was asking for any issues for months?” Rosendorff: “My apologies for the late feedback regarding our readiness …”
Erin Woo Notable frustration from Rosendorff after he tries to make a point and Wade cuts him off: “I’m just reading emails and saying, yes, that’s what’s happening here.”
Erin Woo We’re now onto discussion of the Walgreens launch. In a 11/10/13 email to Balwani, Rosendorff flagged issues that needed to be addressed before the Walgreens launch. Wade is walking him through the email chain with Balwani, point by point.
Erin Woo After many questions establishing that Rosendorff did not hide Normandy lab from the inspectors, Wade notes that the inspection found “minor deficiencies.” Rosendorff says that Holmes and Balwani were upset that there were deficiencies and that a clean report would have been “ideal.”
Erin Woo Wade is trying to make the point that this was to preserve trade secrets. Rosendorff says this doesn’t make sense, asking who would pin trade secrets to a bulletin board.
Erin Woo We’re looking again at the email from Elizabeth Holmes about walking the auditors through the lab. We’re now seeing the response: “All of the bulletin boards from the lobby to HR were covered with paper so the inspector could not view any of the drawings or items on the boards.”
Erin Woo Wade is starting by asking questions about the Dec. 2013 CA Dept. of Public Health audit that we discussed yesterday. Wade’s going through a document listing preparations for the audit as he tries to establish that Rosendorff had responsibility here.
Erin Woo Court is in session for another day of the Elizabeth Holmes trial! We’re continuing with the cross-examination of former Theranos lab director Adam Rosendorff, which defense attorney Lance Wade expects to take all day.
Erin Woo Rosendorff asked for a bathroom break, and we are instead ending for the day! Will pick back up at 9 a.m. Pacific Time tomorrow.
Erin Woo Important content: The custom-built laboratory information system was named Super Mario. (Other fun names: Jurassic Park = the lab with all of the standard machines, Normandy = the lab with Theranos machines.)
Erin Woo Cross examination has been much slower and calmer now that we’re back from break. Less pressing Rosendorff to answer specific questions and more jokes.
Erin Woo Wade is holding up a copy of the book and talking about the importance of its PR and marketing efforts, as well as its secrecy.
Erin Woo Rosendorff read Walter Isaacson’s Steve Jobs biography and liked the excitement of Silicon Valley, which helped lead him to Theranos. (That Steve Jobs biography was a favorite of Holmes’s, too.)
Erin Woo We’re back from break! And we’ve taken a big step back in time — now looking at the resume Rosendorff sent Theranos when he applied in 2013.
Erin Woo We’re now going back and forth on who was involved in the R&D process. Rosendorff says he was not aware at the time if Holmes was involved with R&D. Per the master validation plan, Rosendorff had to sign off on each assay before it can go into validation.
Erin Woo We’re going through what tests were offered during the friends and family launch. The only tests run through 9/28/13 were two that did not run on the Edison, Rosendorff confirms. The first Edison-based test, TSH, a measure of thyroid function, was run 10/17/2013.
Erin Woo Wade also keeps having Rosendorff read his own testimony, silently, to himself. That’s happening again now.
Erin Woo In the email, Balwani writes, “We feel confident we can handle ~30 samples/day from this location at this point. And it has been 2 months since we have been out in WAG [Walgreens]. It’s time to go live.” Wade now trying to make the point that they had not previously been live.
Erin Woo Found it! We are now looking at an 11/7/13 email from Balwani to Rosendorff about opening their Palo Alto/Uni Ave location to the public on the coming Monday. It had previously only been open to friends/family.
Erin Woo We are now, once again, trying to find the correct pages in the MANY binders the defense gave Rosendorff.
Erin Woo Wade is now saying that Rosendorff testified earlier to a grand testimony that it was a “limited friends and family” but didn’t do so on Friday.
Erin Woo We are now on to the commercial launch. In an email that we saw in direct, Rose Edmonds (a development scientist) says that none of the assays are completely thru validation testing. Rosendorff had testified this is significant because they were just a week from launch.
Erin Woo Wade gave a hypothetical where Rosendorff had rotten food in his office, and subordinates complain to Balwani. Rosendorff continued to seem confused, and Wade is now moving on.
Erin Woo We are now … asking about company hierarchy? (Rosendorff reported directly to Balwani, and Young was also above him.) “Are there ever circumstances where it’s appropriate for senior management to have discussions about a subordinate?” Wade asks. Rosendorff seems confused.
Erin Woo Rosendorff also served as Theranos’s clinical consultant. Holmes wouldn’t qualify for this either.
Erin Woo Wade is asking about Holmes’s education. Famously, she dropped out of Stanford. “Based on your understanding of her background, would she be qualified to be a CLIA supervisor or lab director? Rosendorff: “No, definitely not.”
Erin Woo Wade says, and Rosendorff concedes, that ultimately it was Rosendorff’s responsibility if the tests failed and his responsibility to enforce quality control policies and proficiency tests.
Erin Woo Rosendorff is agreeing with Wade’s questioning that Holmes never told him to report an inaccurate result, and that Holmes never directed him not to pause or discontinue tests he thought were inaccurate.
Erin Woo Wade: “Did you ever use a test on patients that you believed was inaccurate or unreliable?” Rosendorff: “No.” Did he ever provide results that he believed to be unreliable? “No.”
Erin Woo Wade: “Did you faithfully dispatch your legal obligations as lab director at Theranos?” Rosendorff: “Yes, I did.” Wade: “Did you offer lab tests that you knew at the time were inaccurate or unreliable?” Rosendorff: “No … I ordered the laboratory to cease testing.”
Erin Woo Two themes of cross thus far: Wade seems to be trying to prove that Rosendorff worked with the government in shaping his testimony, and is hammering home that Rosendorff was legally and ethically responsible for the lab.
Erin Woo Rosendorff confirms that he was familiar with the regulations. Wade is now asking a series of questions about Rosendorff’s obligations: “You are required to…?” Rosendorff says these are his obligations, but “I received pushback from management.”
Erin Woo Wade is now holding up a stack of papers (maybe an inch thick?) and asking if Rosendorff knew all of those regulations, presumably the stack of papers he’s holding. Davila, the judge: “You’re asking to admit the entirety of this document? It’s how many pages? 122?” It’s admitted.
Erin Woo We’re into Rosendorff’s time at Theranos! Wade asked him if being the CLIA lab director meant he was legally responsible for what happened in the lab, and Rosendorff said yes.
Erin Woo Wade is continuing to try to pick apart the prosecution’s case, noting that they didn’t go in chronological order through the documents. He still hasn’t really asked about Rosendorff’s actual experiences at Theranos.
Erin Woo Wade is arguing that Rosendorff’s testimony in direct doesn’t match what he testified in 2019. Earlier, he just said he wasn’t satisfied with management’s response to proficiency testing. His testimony on Friday was more detailed.
Erin Woo We’re now into questioning about the testimony itself. Wade is asking Rosendorff about his reasons for leaving Theranos. Wade asks if Rosendorff discussed that question/answer with the government. Rosendorff says yes.
Erin Woo Wade presses him on whether he told the government what he was going to testify. Rosendorff says no.
Erin Woo Wade is now asking about how Rosendorff was prepared to testify by the government. Rosendorff: “I was always instructed by the government to be truthful.” Wade asked: “Did they tell you to give that answer?” Rosendorff: “No.”
Erin Woo Wade is going through a list of people and asking Rosendorff if he’s met each of them. His tone is far more aggressive than with previous witnesses.
Erin Woo We’re starting with cross-examination. Lance Wade, Holmes’s lawyer, is starting by grilling Rosendorff on how many times he’s met with the government.
Erin Woo And, with that, his direct testimony has wrapped. We’ll pick up with cross-examination after a 30-min. break.
Erin Woo Ultimately, Rosendorff said, he left after “endless meetings and conversations, very careful study of medical literature, late nights … great efforts on my part to improve the quality of testing at Theranos.”
Erin Woo Rosendorff testified about why he spoke with then-WSJ reporter John Carreyrou: said he felt a “moral and ethical” obligation to alert the public.
Erin Woo Bostic pointed out the line “We will execute this year.” When did Theranos start testing? he asked. Rosendorff responds: 2013.
Erin Woo More texts from Holmes/Balwani! Holmes: “This year is our year. We can never forget this tiger.” Balwani: “I know, I am focused on it. We will execute this year.” Holmes: “I know. I’m focused on it too. And for our kids never forget who we are.”
Erin Woo On Rosendorff’s last day, he says Balwani offered a handshake, and he declined. Balwani gave him exit paperwork to sign. Balwani said he would be prepared to keep him on, but Rosendorff said it wasn’t worth the risk to his reputation.
Erin Woo Holmes forwarded it to Balwani: “We need to respond to him now and cut him Monday.” Rosendorff had already accepted a job offer at another lab and was planning on leaving — interpreted this as them trying to fire him right before he left.
Erin Woo Nov. 2014 email to Rosendorff asking for a redraw. Rosendorff forwarded this to Holmes/Balwani, and Balwani said the rep “jumped the gun” asking for a redraw. Adam forwarded this to Elizabeth: “I find Sunny’s response offensive and disingenuous. He should apologize.”
Erin Woo Gov’t trying to make the point that Holmes/Balwani are actively courting investments even as Rosendorff raises concerns about crucial problems in the lab.
Erin Woo We’re now looking at Nov. 2014 texts between Balwani and Holmes, talking about investments from Alice Walton and Rupert Murdoch. Balwani: “They are not investing in our company, they are investing in our destiny.”
Erin Woo “…how fundamental it is to all of us for you or any other employee never to do anything you’re not completely confident in.” Rosendorff says he disagrees with this, and we’ve seen emails showing that he raised concerns.
Erin Woo Holmes’s response (pt. 1): “How sad and disappointing to see this from you. Outside of the fact you’ve never emailed me on any concerns you allude to there before but now email this, you know from every conversation we’ve ever had together …”
Erin Woo Now looking at Nov. 14 emails from Rosendorff. “I feel really uncomfortable with what is happening right now in this company. Is there any way you can get Spencer back on the CLIA [Clinical Laboratory Improvement Amendments] license and take me off? I am feeling pressured to vouch for results that I cannot be confident in.”
Erin Woo Christian forwarded the email to Elizabeth, writing: “His response to this was to do a vacutainer redraw & I ended the conversation at that point.” A vacutainer draw is a non-Theranos retest.
Erin Woo He continued: “Further 100% honesty and transparency to the patient is essential. “My first duty is not to Theranos, but to the patient as per my Hippocratic oath “primum non nocere.” “I never said I wouldn’t talk to the MD.”
Erin Woo In an email to Christian, Rosendorff doubled down. “This is not a question of interpreting results — this is a question of the reliability and accuracy of the result.” “The most constructive thing at this point is to offer reliable and robust assays, not to spin.”
Erin Woo Nov. email from Rosendorff about the patient call to Christian: “If you’re asking me to defend these values then the answer is no.” He was refusing to defend the accuracy of the result, Rosendorff testifies.
Erin Woo Emails like this contributed to a “crescendo” of issues, Rosendorff testifies, leading to his resignation in Nov. 2014.
Erin Woo Looking at an email from a medical assistant concerned that HDL and LDL (cholesterol) readings are not adding up. That raises concerns about the accuracy of the test, Rosendorff testifies.
Erin Woo In a follow-up email from Holmes: “Kerry please delineate this based on what we did with the NY inspector recently and send that out.” No one was allowed to enter or exit the Normandy lab during the visit, Rosendorff said. Those directions came from Balwani.
Erin Woo 1/26/13 email from Holmes about the upcoming audit from the California Dept. of Public Health: “Let me know if the path for walking the auditors in and downstairs has been cemented so we avoid areas that cannot be accessed, and what that path is.”
Erin Woo Christian forwarded the message to Daniel Young and cc’d Elizabeth. In a later email to Elizabeth and Daniel, Christian wrote that Rosendorff already approved the redraw. “Need to discuss messaging for my call with this doc, with regard to reason for the redraw,” Christian wrote.
Erin Woo Now looking at an email to Christian Holmes to approve a redraw, despite his not having a position in the clinical lab or a medical/science background. Rosendorff says he wasn’t aware Christian was involved in approving redraws.
Erin Woo Now onto discussing transparency. “I felt a conflict between the messaging that the company wanted me to provide … and my duty as a physician” to accurately report results when talking with doctors, Rosendorff says.
Erin Woo In an email chain about the proficiency testing samples, Balwani wrote that Theranos’s validation has been “excellent in the past” and that “it is these PT samples that are off.” Rosendorff testifies that he disagrees.
Erin Woo There was no formal proficiency testing process at Theranos, Rosendorff says. He says he raised these concerns at a mid-2014 meeting to people including Holmes, Theranos’s president, Ramesh Balwani, and the VP Daniel Young. He felt like they gave “lip service” to this issue, and there was no progress made before he left in November.
Erin Woo Rosendorff’s reaction to situations like this: “Every time we got a physician complaint, every time our QC would fail, every time we had a spate of anomalous results, it raised great concerns to me about the accuracy of the testing process.”
Erin Woo We’re looking at an email from someone who has been on coumadin, a blood thinner medication, for 13 years. After switching to Theranos testing, her results came back low, and she increased her dose as a result. “I have not felt ‘right’ since the one increased dose,” she wrote.
Erin Woo I’m back in the courtroom for another day of the Elizabeth Holmes trial! We’re starting with the end of former lab director Adam Rosendorff’s direct testimony.
Erin Woo With that, we’re going to break for the weekend. I’ll be in the courthouse Tuesday, Wednesday and Friday next week — see you on Tuesday!
Erin Woo For the past hour, Rosendorff has testified about problems w various tests, incl. the potassium, chloride and sodium tests. In a 10/27/14 email, he wrote: “I am not sure of the clinical value of a sodium assay, in which the only time we can report it is when it is not critical”
Erin Woo We’re now getting into Rosendorff’s decision to leave. He forwarded work emails with issues of concern to his Gmail account in 2014, testifying that “I wanted to protect myself.” He also says he started looking for another job in mid-2013, shortly after joining Theranos.
Erin Woo Today’s theme seems to be a) Rosendorff was concerned about faulty tests, b) Rosendorff recommended the company stop using those tests and c) Holmes/Balwani were aware but declined to change course.
Erin Woo We’re now on issues with Theranos’s HDL (cholesterol) tests. Rosendorff says he “suspected” Theranos’ HDL was no longer working as of Feb. 2014 and suggested reverting to FDA-approved devices, but received pushback from Balwani, Holmes and Theranos VP Daniel Young.
Erin Woo We’ve now seen two email chains including Holmes/Balwani about complaints/issues that Rosendorff wasn’t included on. Rosendorff says he “absolutely” should have been included on the emails.
Erin Woo Rosendorff is testifying about issues with the hCG tests, which detect pregnancy. In June 2014, Christian Holmes wrote to Elizabeth: “Just fyi-hCG right now causing some serious issues and patient complaints.”
Erin Woo We’re comparing Rosendorff’s time at the University of Pittsburgh to his time at Theranos. At Theranos, complaints about test results were “much more frequent,” and he “felt pressured to defend the company’s results to physicians,” he said.
Erin Woo Theranos devices failed so frequently that it raised questions about the accuracy of the results, Rosendorff testifies. Performance of Theranos assays was worse than non-Theranos analyzers.
Erin Woo Rosendorff is now discussing quality control. As we learned in Cheung’s testimony, quality control happened once a day, and machines would be recalibrated if they failed. This was a frequent discussion topic at Theranos, he testifies.
Erin Woo Rosendorff had a meeting w Holmes where he expressed his concerns. She was very nervous and was not her usual composed self, he said: She was trembling, knee was shaking, she was very upset.
Erin Woo In an email to Holmes, Rosendorff wrote that “A few more weeks to sort through these medical and logistical issues, and getting the proper level of training and staffing would help us tremendously.”nd staffing would help us tremendously.”
Erin Woo An email from Rose Edmonds from 9 days before the launch says “none of our assays are completely through validation including clinical sample testing with fingerstick.” Under CLIA law, the tests need to be validated properly before they can be used for patient care.
Erin Woo Leading up to Sept 2013 commercial launch, there was “a lot of anxiety” about the appropriateness of using modified tests for patient care. The general mood of the company was “very optimistic,” but some were questioning why Theranos wasn’t using its own devices.
Erin Woo The downstairs Theranos lab, which contained the Theranos Edison devices, was called Normandy, Rosendorff said. According to Rosendorff, Balwani called the upstairs lab with conventional devices Jurassic Park: Balwani “believed the conventional devices were dinosaurs.”
Erin Woo Rosendorff starting strong with why he quit Theranos, incl. unwillingness of management to perform proficiency testing and feeling pressured to vouch for tests he wasn’t confident in. Also: “The company was more about PR and fundraising than patient care.”
Erin Woo The government is calling former Theranos lab director Adam Rosendorff today in the trial of Elizabeth Holmes. Per prosecutor John Bostic, this testimony is likely to take all day.
Erin Griffith Mattis is done and now a prosecutor is reading text messages between Holmes and Balwani while a forensics guy from PWC says “yes” and “correct.” I guess this is how they have to present this evidence but it is really really bizarre.
Erin Griffith On redirect: Why did Mattis initially support Holmes after the WSJ expose and then change his mind? There were too many surprises, he said. “We were unable to help her on the fundamental issues that she was grappling with if we only saw them in the rearview mirror.”
Erin Griffith We look at Mattis’ emailed response to Holmes after the WSJ article. “Be swift in response with unassailable truth,” he wrote. “I have full faith in our plan.”
Erin Griffith He also asks if Mattis knew Theranos was doing blood tests in a central lab. Mattis: “I assumed the central Theranos lab was the Theranos machine.”
Erin Griffith In cross-exam, Holmes lawyer Kevin Downey asked Gen. Mattis about his qualifications to evaluate Theranos’s technology and be a board director.
Erin Griffith Initially Mattis thought the problem was fixable — the company simply messed up its messaging and could come clean. Soon after, he began to question whether or not the Edison machine worked. “There just came a point when I didn’t know what to believe about Theranos anymore.”
Erin Griffith After WSJ article, board members emailed Holmes about the allegations. Her response: Theranos was transitioning from operating under one laboratory framework to another. Mattis: “I was still confused.” At a minimum, “we had a reputation problem here and an integrity problem.”
Erin Griffith Ominous. After Theranos learned about a 2015 WSJ article by John Carreyrou that exposed problems with Theranos’s technology, there was a board meeting with a slide titled “Duty of Loyalty.” We are shown that slide, except it is comically redacted — all content blacked out — and Mattis doesn’t remember it.
Erin Griffith We see an email from Holmes instructing Mattis that, in an interview with Ken Auletta of The New Yorker, he can’t discuss “how our technology works (i.e. that there is a single device that does all tests)”
Erin Griffith Fortune published a long correction to that article, which I don’t remember seeing from a lot of other outlets that wrote positive stories. Parloff is listed as a witness and defense is attempting to compel him to turn over his notes.
Erin Griffith Assistant U.S. attorney John Bostic pulls up Fortune’s 2014 cover story about Theranos. Mattis spoke to the reporter, Roger Parloff, and said Holmes gave him guidance on what he could and couldn’t say.
Erin Griffith Still trying to train my brain to not hear “amino acid” every time they say “immunoassay”
Erin Griffith Theranos got a lot of mileage out of a 2013 WSJ article! We see an email where Holmes sends Mattis the link, as well as a slide of it in a Theranos board presentation
Erin Griffith We’re going through this board presentation, which has a slide claiming Theranos’s tech had been validated by 10 of the 15 largest pharmaceutical companies, alongside logos of FDA & WHO and a quote from Johns Hopkins.
Erin Griffith What were your sources for information about the company? Mattis: “Ms. Holmes.” “Was she the primary source?” “The sole source.”
Erin Griffith Mattis also invested $85k into Theranos, which he said was a significant sum “for someone who had been in govt. service for 40 years.”
Erin Griffith Did you accept Ms. Holmes’s invitation to join Theranos’s board? “Yes I did, after asking why. I was not a medical person.” She said she wanted his mgmt. and organizational experience.
Erin Griffith Mattis testified that he was not aware of Theranos devices ever being used on battlefields, military helicopters, clandestine operations…
Erin Griffith Mattis testified that Holmes was “very aggressive” at wanting the military pilot program to get going. “She was very confident that if we got it in there, it would prove itself.” He knew it was a start-up, but noted that Holmes had been working on it for a decade by 2013.
Erin Griffith oy, another email where Mattis calls Holmes “young Elizabeth.”
Erin Griffith Holmes was the one telling him about the Theranos device’s capabilities, he said. “I was frankly amazed at what was possible.” But he added: “That didn’t take the place of having the device prove itself.”
Erin Griffith Mattis testified the size of the Theranos device and its promised capabilities made it so attractive to potential military use. Accuracy and reliability were critical given the casualties, he said. “The stakes are very high.”
Erin Griffith In one email, Mattis told Holmes he wants to explore a pilot project to test Theranos machines alongside the army’s existing systems to compare. Mattis testified that he was very “taken” by the possibilities of using a drop of blood for diagnostics.
Erin Griffith Mattis, a U.S. general and former secretary of defense, was on Theranos’s board between 2013 and 2016. We start by looking at 2011 emails between them after meeting. In one, Mattis writes, “thank you for your note, young Elizabeth, and I wish you every success.”
Erin Griffith At the courthouse for US v. Holmes. James Mattis has taken the stand.
Erin Griffith Gould’s testimony lasted around 15 minutes – From behind a clear mask, she got emotional discussing her experience finding out via Theranos tests that, after three miscarriages, her fourth pregnancy was not viable. The happy ending is that it was. She had a baby. Adjourned!
Erin Griffith Defense wraps up by pointing out that Zachman’s practice had many many test results from Theranos beyond Ms. Gould that seemed to be fine. Judge Davila is eager to keep going, even though we are over on time today. Brittany Gould takes the stand.
Erin Griffith Defense works to chip away at the testimony by implying that the Theranos test results simply existed on a different scale and should have been “rebaselined.” Also noted that Holmes’s brother Christian, who responded to Zachman’s complaint about the results, apologized.
Erin Griffith Oh my, Theranos offered Zachman a “corrected” version of the results which simply removed a decimal point but the she says numbers still wouldn’t have made sense within the context of a viable pregnancy or a loss of one.
Erin Griffith “This circumstance was very impactful to me as it stood out as such a red flag for the pregnancy.”
Erin Griffith Gould took 5 blood tests, 3 from a subsidiary of Quest Diagnostics and 2 from Theranos. She went on a rollercoaster, with the Quest test showing she was pregnant, the two Theranos tests showing a miscarriage, and 2 more Quest tests showing she was indeed still pregnant.
Erin Griffith Zachman describes the case of a patient named Brittany Gould (sp?) who had had 3 miscarriages. She came to see Gould after a positive at-home pregnancy test “to establish that yes, she is pregnant and look at the health of the pregnancy.”
Erin Griffith Zachman was on a committee that evaluated service providers and her practice adopted Theranos blood tests around 2014. Theranos even set up a lab downstairs from one of her practice’s offices, which Zachman said was “very exciting.”
Erin Griffith New witness: Audra Zachman, a nurse practitioner at an OB-GYN practice.
Erin Griffith I have enjoyed chatting with some of the trial-heads and and fans of justice who have shown up to watch (provided they’re not moles :). Today I met a retired paralegal who says he was at the Patty Hearst trial!!
Erin Griffith Redirect up. US Attorney Robert Leach reminds jurors that when Gangakhedkar resigned from Theranos, she had concerns about the reliability of Theranos’s tests and discussed them with Holmes.
Erin Griffith More bad boss/good boss content: We see an email Gangakhedkar sent to Balwani defending how hard her team was working + an email she sent to her team praising their long hours. She then resigned from Theranos and Holmes attempted to get her to stay, offering time off.
Erin Griffith Defense previously showed that Holmes let Gangakhedkar go to India to see family, painting her as a sympathetic boss and Balwani as the aggressive one. “[Balwani’s] trying to make you feel guilty that you weren’t working?” “Yes” “You were frustrated by that?” “Yes.”
Erin Griffith We are still doing cross-examination of Gangakhedkar. Wade shows an email from the former Theranos president, Ramesh Balwani (who goes by Sunny), chastising the lab workers for not working as hard as his software team, painting him as the one pushing unrealistically for overwork.
Erin Griffith Zachman will now offer expert testimony on interpreting HCG tests (a hormone used to identify pregnancy status) You expect HCG levels to double every 48 hours or so in early pregnancy.
Erin Griffith Wade goes on a run of questions (peppered with “yes” responses by Gangakhedkar) arguing that the point of R&D is encountering issues and setbacks and fixing them. “In R&D sometimes you have to fail before you can succeed right?” “Yes.”
Erin Griffith We see an email where Holmes asked Gangakhedkar for some testing data ahead of a meeting with the DoD. Gangakhedkar emails that Vitamin D data isn’t ready and Holmes writes asking for data on other tests. The point is, apparently, look at this example of Holmes not doing fraud.
Erin Griffith The Defense strategy re: Theranos lab problems seems to be: look, real work was being done; there were processes in place that sure seemed rigorous; the very people pointing out problems also signed off on it all.
Erin Griffith So far it’s basically a call and response, where Wade describes work of Gangakhedkar + Theranos’s lab, and Gangakhedkar replies “yes.” “Were you proud of that work?” “Yes.” “And others at the company were happy about that work as well?” “I think so.”
Erin Griffith Back in the San Jose courtroom today for more US v Holmes. Surekha Gangakhedkar, a scientist at Theranos, is back on the stand being cross-examined by Holmes’s lawyer Lance Wade.
Erin Woo With that, Judge Davila is ending Gangakhedkar’s testimony for the day and instructing jurors not to consume media content about the trial, as always. The trial will resume on Tuesday — Erin Griffith will be at the courthouse to bring you live updates.
Erin Woo We are now onto cross-examination. Holmes’s lawyer is questioning her about G.S.K.’s study of Theranos’s assays, pointing out that the study promoted her work. “The Theranos system eliminates the need for a lab and provided quality data,” the G.S.K. memo said.
Erin Woo Despite having signed an N.D.A., Gangakhedkar printed out some documents and took them home when she left Theranos. “I was worried that I would be blamed,” she testified.
Erin Woo Three days after the email from Balwani, Gangakhedkar sent Holmes her resignation email. She testified that she was “very stressed and unhappy and concerned” with the planning of the Walgreens launch.
Erin Woo In an email from Balwani to Gangakhedkar, with Holmes copied, Balwani said the software team had been working until 3:07 a.m., but that the Edison blood-testing devices Gangakhedkar’s team worked on were “all sitting idle.” This was an example of the pressure they were under, Gangakhedkar said.
Erin Woo And, with that, Cheung has been dismissed. The government is calling Surekha Gangakhedkar now, a former Theranos team manager.
Erin Woo The government is now asking questions about a document that says, among other things, that Theranos’s devices “can be operated with minimal training” and that its results have “precision and accuracy equivalent to traditional clinical laboratory analyzers.” Neither is true, Cheung says.
Erin Woo Cheung said they were constantly having to recalibrate the machines, which made results take 2-3 days rather than the couple hours promised. “We had people sleeping in the car because it was taking too long,” she said.
Erin Woo Cheung just said she “became concerned about a month in” with the vitamin D samples, in November of 2013. She was concerned about the performance of the tests and that they were being used on patient samples.
Erin Woo Defense is done with cross-examination, after showing Cheung Theranos policy documents she said she’d never seen. The government is now asking questions again for redirect.
Erin Woo Holmes’s lawyer is asking Cheung a lot of questions about quality control checks that occurred on the Theranos devices. “There is a recognition that some errors would happen and this was the policy on how to deal with those errors,” he said.
Erin Woo Erika Cheung is now taking the stand as cross-examination continues.
Erin Woo The update you’ve all been waiting for: The judge is STILL pronouncing it ther-AH-nos.
Erin Woo In the courthouse now for another day of the Elizabeth Holmes trial. We’re expecting to wrap up testimony today from Erika Cheung, one of the key whistleblowers in the case.
Erin Griffith That’s it for today.🩸💉⚖️
Erin Griffith So far the theme of the cross-exam of Cheung seems to be using excruciatingly arcane details about the processes and procedures of the Theranos lab to show that its work was very complicated, involving lots of smart, pedigreed people.
Erin Griffith Cheung testified that in meetings about quality control failures, Theranos’s lab directors ignored the most obvious possible reason for the failures: “The Edison devices didn’t work.”
Erin Griffith Trial gear alert: A reporter brought their own binoculars to see the exhibits on the TV screens.
Erin Griffith Erika Cheung is back on the stand. She described Theranos’s practice of demoing blood tests for V.I.P.s, where some of the results came from Theranos machines and others from Siemens analyzers.
Erin Griffith At this point we have heard lawyers and witnesses pronounce “Theranos” hundreds of times, making me start to wonder whether judge is trying to mess with us by sticking to his “ther-AHHHHH-nos” pronunciation.
Erin Griffith I should note the woman who clapped and yelled “you’re a good mom!” at Holmes yesterday suddenly stormed out of the courtroom after Judge Davila warned everyone that yelling stuff like that in front of any jurors could cause a mistrial. I don’t see her here today!