After her company formerly valued at about US$9 billion came crashing down, Elizabeth Holmes has found herself in hot waters over her fraudulent acts and could potentially spend 20 years in prison.
In recent times, Holmes has been on the witness stand and in a Tuesday hearing, she confirmed key aspects of the prosecutor’s allegations behind the 11 counts of fraud she faces.
She has however claimed that she has done nothing wrong.
While the prosecution continues to show jurors lab reports emblazoned with logos of big pharmaceutical companies like Pfizer and Schering-Plough, witnesses from these companies that also worked with Theranos testified that the use of the logos was unauthorized and they were unaware of it at the time.
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Holmes however admitted that she was the one who had added the logos to the Theranos lab reports and sent them to Walgreens while pursuing a deal to get her diagnostic machines in the pharmacy’s retail stores.
She also added that Theranos used third-party devices instead of its own devices in some cases.
“This work was done in partnership with those companies and I was trying to convey that,” she said by way of explanation. “I wish I had done it differently,” she added.
Holmes also made it known that while switching from using on-site analyzers to process samples to a centralized lab approach, Theranos made use of third-party devices instead of using its own since there were just too many samples to handle.
Witnesses however have a different view of the Theranos testing machines which are said to have failed on multiple occasions.
There are even allegations that the company diluted blood samples which often lead to misleading results in the end.
Holmes said the company didn’t tell its business partners about this arrangement because it was a trade secret.
About alleged misrepresentations she made to investors, media, and business partners, Holmes rebutted these claims and affirms that they had received specific positive reports from employees and outside experts and believed their statements were true.
Jurors saw an email sent to Holmes by then-chief company scientist, biochemist Ian Gibbons, about the development of Theranos’ fourth-generation device.
“Our immunoassays match the best that can be done in clinical labs and work with small blood samples. Generally, our assays are faster by a factor of three to 10 than kits,” Gibbons wrote.
Downey then asked Holmes what she took that email to mean. “I understood that the 4 series could do any blood test,” she replied.
District Judge Edward Davila has therefore instructed jurors that the email between Holmes and her lab staff and other exhibits should be seen as indications of Holmes’ “state of mind” and not as facts of what really happened.
Even though Theranos promised to revolutionize the medical industry, witnesses testified against the company that its proprietary devices could only do a few tests and had major quality issues.
For its rollout with Walgreens, the company relied on third-party devices that had been modified to process the company’s proprietary smaller “nanotainer” blood vials, but still returned erroneous results, according to testimony.
Holmes in a new line of defense testified that Theranos testing equipment in its labs had issues with excessive power demands and heat production.
She stated that they were specifically designed to be used in retail stores visited by patients over the course of a day while Therabos labs were all clustered together and processed patient tests at once.
The defense then showed an email between hardware project manager Tim Kemp which stated that Theranos building in Palo Alto, California couldn’t handle the power demands of running the devices in order to process a high volume of patients from the retail rollout while running air conditions to cool them.
If found guilty, Holmes faces up to 20 years in prison, a $250,000 fine, and full or partial restitution to investors, totaling nearly $155 million.