After 10 hours behind her in the witness stand, it became clear how Elizabeth Holmes, the disgraced founder of blood-testing start-up Theranos, had convinced a group of investors farewell to hundreds of millions of dollars.
This week, as back then, the 37-year-old Stanford dropout seemed to have the answer to everything.
It helps her already know the questions, like they did from her lead attorney Kevin Downey; all parts of a calm and collected display, distributed without a mask and behind the Plexiglas in the San Jose courthouse.
As she defended herself over the fraud charges, Holmes seemed so relaxed this week, she even flashed a smile at the judge’s jokes. It will soon be much more difficult. Government prosecutors will likely take their long-awaited turn to cross-examine her as early as next week.
Downey guided Holmes through a carefully curated testimony that served two purposes. First, introduce Holmes as an aspiring young entrepreneur with extensive knowledge of her work, with a strong belief that her vision is doable.
Second, Holmes must deal with, and ideally reduce, some of the government’s strongest evidence.
Taking her stance on Tuesday, she quickly confessed to one of the most serious allegations: that she herself altered Theranos reports to include the logos of two major pharmaceutical companies – Pfizer and Schering- Plow.
Prosecutors said it implied that the pharmaceutical giants endorsed Theranos’ technology, but that was not the case. However, the documents were sent to Walgreens executives by Holmes as part of a successful pitch to open “wellness centers” among the chain’s 3,000 locations. Walgreens became Theranos’ breakout customer, and the deal was the springboard for another huge round of investment, which meant Theranos became a $9 billion company.
“This work was done in partnership with those companies and I am trying to convey that,” Holmes said of his editing intervention, acknowledging that the drug companies were not nice. know about her actions. “I wish I had done it differently,” she added—a rare regret.
Then she went on to another attack: Theranos covered up the use of conventional testing machines because its own hardware failed to meet the task, as previous witnesses have said.
Holmes dug in, saying that she opted to go back to hardware made by Siemens due to the volume of tests from Walgreens customers that needed to be processed. She explained that the Theranos machine was once designed to handle only one sample of one person at a time, but third-party technology, such as those made by Siemens, can handle much more.
When asked by her attorney why she didn’t share details of the process change with Walgreens, the company’s customers or Theranos investors, Holmes stated that in addition to the cover-up, she was in fact guard New Invention: ability to use existing analyzers to analyze smaller blood samples.
“This is an invention that we understand from our attorneys we must protect as a trade secret,” said Holmes. “Big medical device companies like Siemens can replicate what we did. They have more engineers than us. “
At times, the atmosphere in and around the court betrays the gravity of what lies ahead for Holmes, who in July became a mother. She faces 11 charges of phone fraud and conspiracy to commit phone fraud, all of which involve a pillow claim that her promise, to reduce the cost and discomfort of blood tests, was a sham. If convicted, she faces 20 years in prison.
Whether it was a lucky moment or a well-executed plan, Holmes’ call for the witness to sided with the defense, late Friday afternoon, caused alarm in the national and international media outlets. came to San Jose on Monday morning to hear her speak. for the first time since the fall of Theranos.
Now that also means jurors will be heading home for Thanksgiving with Holmes’ defense right in front of their mind – not the government’s accusations.
Those most desperate to secure one of the roughly 30 public seats in the courtroom began arriving at 3 a.m. each morning, with two reporters implementing a strictly journaled queue system to reward those early risers. The system drew praise from a local teacher, who decided to come out of curiosity, who said she organizes her seven-year-olds the same way.
Nearby, an opportunist woman – if perhaps not quite as serious – opened a suitcase to reveal a selection of “goods,” including a $40 blonde wig, or a black Holmes-esque turtleneck for the same price.
The footage proves that while it may not be quite what she intended, Holmes has certainly become an icon in the industry. As she walked into court on Tuesday, a male fan shouted, “Girl boss! God bless the boss girl! ” — a condescending but sentimental moniker for some who have pointed out that, for all the failed startups led by men, it is said to be a woman who sees himself in one of the most talked about cases in the history of Silicon Valley.
Others argue that it’s not Holmes’ gender at play, but her business choices. Compared with the “move fast and break things” in the wild west of software and social media, the highly regulated healthcare sector presents many opportunities for ruthless surveillance and the price to pay for being wrong – as evidenced by a witness here who was falsely told by Theranos that she had miscarried – was severe.
If Holmes is convicted, some say it will put a leash on future innovators, stoking fear of failure. If Holmes does walk away, it’s a signal to investors that even those they believe have repeatedly lied will not face criminal consequences.
