SAN JOSE, Calif. (AP) – Biotech entrepreneur Elizabeth Holmes, a former billionaire accused of large-scale medical fraud, expressed some regret during her testimony on Tuesday, but denied attempts to cover up that her company’s blood test methods were untrue. works as she promised.
On the third day of her testimony in a high-profile criminal trial, Holmes admitted that she made some mistakes as CEO of Theranos, the company she founded in 2003 when she was only 19 years old. But she has repeatedly emphasized that she made most of her decisions with her help. other leaders and a respected council that included former cabinet members in various presidential administrations.
Holmes, now 37, also made it clear that she never stopped believing that Theranos would revolutionize healthcare with technology that would detect a wide range of diseases and other problems by testing just a few drops of blood.
“It’s never smooth,” she said. “There are always problems.”
Ultimately, Theranos collapsed after a series of explosive articles in The Wall Street Journal and a review by federal regulators that revealed serious and potentially dangerous flaws in the company’s blood tests. The scandal wiped out Holmes’ fortune, which was estimated at $ 4.5 billion in 2014, when she became the subject of a bright Fortune magazine cover.
Holmes denied that she intended to defraud anyone about her partnership with Walgreens to install Theranos test devices in 3,000 drugstore stores. Walgreens ended the partnership after problems with inaccurate test results and finding that Theranos is testing many of its samples on conventional diagnostic equipment, rather than on Theranos’ Edison device, which was supposed to provide faster and less costly testing.
Holmes said that when Theranos was about to start running tests at Walgreens stores, she instead deliberately sent them to a central laboratory for routine analysis. Holmes argued that Edison was not designed to work in large clusters to handle large numbers of blood samples.
Her testimony is at odds with previous witness statements and prosecutorial claims that Theranos switched to routine testing due to testing failures and other issues with Edison. Theranos has never told its customers that it is using conventional test equipment instead of Edison.
Holmes testified that Theranos was silent because it created an “invention” that allowed small blood samples to be processed on conventional testing machines. The company did not tell Walgreens or anyone else to protect this trade secret from possible theft by a larger, more reputable testing company, she said. “They had more engineers than we did,” Holmes said.
One important question remains in Holmes’ testimony – whether she will react to her claim in legal documents that her former lover and former Theranos COO, Sunny Balwani, secretly manipulated her into unethical behavior.
In court documents released shortly before the start of the trial in early September, Holmes’s lawyers accused Balwani of having subjected Holmes to “intimate partner abuse.” Balwani, who will face a separate fraud trial next year, denied the allegations through his lawyer.
Balwani also drew up a series of financial projections that were the focus of the lawsuit, Holmes said. In documents circulated to potential investors, Theranos predicts annual revenues of $ 140 million in 2014 and $ 990 million in 2015. Other evidence presented during the litigation showed that the company never came close to achieving these goals.
Holmes testified that the revenue forecast for 2015 was based largely on the expected expansion of Walgreens stores, which never materialized.
The former CEO of Theranos has indeed taken responsibility for adding the logo of Pfizer, a major drug maker, to a report extolling the effectiveness of Theranos technology. The decision came after an internal report from Pfizer, which Holmes said he had never seen, expressed doubts about the reliability of Theranos blood tests.
“I wish I had done otherwise,” Holmes said. Several investors said the appearance of the Pfizer logo in the report helped convince them to invest in Theranos.
Holmes has raised nearly $ 1 billion since founding Theranos in 2003. She faces allegations of defrauding investors, patients and business partners while running a company in Palo Alto, California. If convicted, she faces a prison sentence of up to 20 years.
Holmes has so far spent eight hours at the booth and will not return until Monday, when the trial resumes after the Thanksgiving hiatus.