“I was worried about the launch, I was actually scared that things would not go well,” she said.
The prosecution sought to show that Holmes was in the loop on technology issues, showing the jury several emails either sent to or from the former chief executive officer that discussed problems lab workers were seeing with the company’s small blood testing devices.
Holmes’s defense team filed its intent to issue objections to her testimony late Thursday, attempting to block the scientist from sharing how much she believes Holmes knew about operations within the company’s blood-testing technology teams. But during questioning, the defense stayed largely quiet, though it did issue an objection to a document, which the judge overruled, and to a few witness questions and answers.
The trial of Holmes, who founded the now-dissolved blood-testing start-up Theranos, started last week in Silicon Valley. Holmes is charged with 12 counts of wire fraud and conspiracy to commit wire fraud. The government alleges she misled investors and patients about the success of the company and the technology’s ability to accurately run dozens of blood tests from a couple drops of blood collected from a fingertip.
The company’s collapse spurred the publication of books, a documentary and at least two podcasts, drawing global attention to the story of Holmes, who was 19 when she started the company in 2003.
Theranos was a start-up attempting to develop a way to run hundreds of blood tests from a small finger pick. But investigations into the company revealed that the technology could only run about a dozen tests, and former employees said it worked erratically. The company collapsed in 2018, and Holmes settled fraud allegations by the Securities and Exchange Commission that same year.
In their opening argument, prosecutors said that Holmes misled investors when the company was struggling. “This is a case about fraud, about lying and cheating to get money,” Robert Leach, an assistant U.S. attorney, told the courtroom.
Holmes has pleaded not guilty, and her defense said in its opening statement that she made mistakes but acted in good faith and never committed fraud. “The reality of what happened at Theranos is far, far more complicated than what you have heard about Elizabeth Holmes so far,” defense attorney Lance Wade said during his opening statement.
The defense attempted to show that during proceedings while questioning another former employee, Erika Cheung, who was a lab worker at Theranos. Cheung, who reported the company to Centers for Medicare and Medicaid Services after leaving her job in 2014, testified that she grew concerned that Theranos blood tests were not reliable enough to perform on patients.
The defense cross-examined her Wednesday and Friday, drawing attention to the number of qualified scientists that worked in the lab and the many steps of the process the company used to develop blood tests. Wade showed a document that appeared to be a procedure developed to correct issues that came up in the lab.
Cheung confirmed that Theranos did not run patient samples on machines that had failed quality control checks for the specific test until the issues were fixed. Sometimes that meant recalibrating the machines, she told the prosecutors on their redirect questioning, a process that could take days. “We had people sleeping in their car because it was just taking too long,” Cheung said.
Gangakhedkar took the stand after Cheung. The court granted her immunity from criminal charges for her testimony, after she indicated that she would otherwise plead the Fifth Amendment, which protects people against having to incriminate themselves.
Gangakhedkar said she returned from a vacation in summer 2013 to learn that the company planned to start using the Edison 3.0, a version of the company’s portable blood testing machine, on patient tests. When she decided to quit in September, she met with Holmes several times in one morning to discuss her concerns that the machines were not ready to be used on patients and to resign.
Holmes told her that she had made a promise to the company’s customers and that she “didn’t have much of a choice” but to go ahead with the launch, Gangakhedkar said. Gangakhedkar took some company emails with her when she left the job despite signing a nondisclosure agreement, she said, because she was worried she would be blamed if the launch went badly.
The defense briefly began its cross examination Friday and is expected to continue Tuesday.