Theranos founder Elizabeth Holmes arrives at the Robert F. Peckham US Courthouse for the opening of arguments in her trial in San Jose, California on September 8, 2021.
Peter DaSilva | Reuters
SAN JOSE, CALIF. – Elizabeth Holmes was the founder and face of Theranos, but when it came to the company’s laboratory, she relied on their highly trained laboratory managers and scientists.
That’s the picture her defense lawyers painted Wednesday to discredit the testimony of a former Theranos lab worker turned whistleblower, Erika Cheung, who said the Edison blood testing machines often failed quality controls.
Lance Wade, Holmes’ defense attorney, went through the high qualification of the scientists who worked at Theranos, including 52 postdoctoral researchers and 10 medical professionals.
Cheung wore a black and gray dress with heels and spent six hours at the booth to testify about the high failure rate and data manipulation with the Edison, the company’s mini blood laboratory machine.
“You’d be about as lucky as to toss a coin whether your results were right or wrong,” Cheung said. “It was worrying to see this level of error, it wasn’t typical of a normal laboratory.”
Cheung, who worked at Theranos for less than a year, said her lab directors are Mark Pandori, who has a doctorate, and Adam Rosendorff, who has a degree in medicine. After leaving Theranos, Cheung became an advocate for ethics in the tech industry and started a nonprofit called Ethics in Entrepreneurship with her former colleague and whistleblower Tyler Shultz.
Holmes came to court in a dark green dress with a matching mask, holding hands with her mother Noel Holmes, who has attended every hearing since the trial began last week.
During a hiatus, Holmes, who pleaded not guilty to dozens of wire fraud and conspiracy cases, was seen hugging her mother.
During the cross-examination, Wade Cheung showed several validation reports for the assays that she stated were problematic. He pointed out the signatures of people who had approved the tests for laboratory use, including a laboratory director and a vice president. Holmes did not sign the document.
Cheung stated that quality control tests routinely fail in the laboratory, so the company would use an “outlier erasure system” to select the best data points to pass. Cheung later confirmed to defense lawyers that the quality control tests were not performed on human blood samples.
Cheung testified earlier in the day that lab workers often tampered with the data to keep the equipment running. She told the court that she eventually brought her concerns to Ramesh “Sunny” Balwani, Holmes’ deputy and at times her romantic partner.
“The feedback and reception I got from him was, ‘What makes you think you are qualified to make these calls, you’re a UC Berkeley graduate, what do you know about laboratory diagnostics?'” Recalled Cheung.
Balwani, who will be tried separately next year, has also pleaded not guilty.
Cheung testified that she had shared her concerns with Shultz and his grandfather, former US Secretary of State and Theranos board member George Shultz.
“It became very uncomfortable and very stressful for me to work for the company,” said Cheung. “I tried to tell as many people as I could, but it just didn’t get to people.”
Cheung’s testimony continues on Friday.
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