Testimony in the fraud trial of a Silicon Valley billionaire began to heat up on Thursday as potential jurors were questioned and testimony focused on the 2014 hospital study that kickstarted Holmes’s exorbitant rise to billionaire status.
Elizabeth Holmes – founder of Theranos and former CEO of Palo Alto, California-based Theranos – was expected to take the stand on Thursday but her testimony was delayed until Friday.
Holmes, who built Theranos into a national health testing giant in just a few years before facing a monumental academic backlash, has claimed that its blood-testing technology was superior to others and that the technology was being used in thousands of patient exams a day. In 2016, Theranos wound down its entire operations and was the subject of an explosive Wall Street Journal article that helped sink Holmes’ fortunes.
Holmes is accused of misleading investors and regulators with her claims that Theranos’ proprietary technology had what appeared to be unprecedented speed and accuracy. She’s charged with securities fraud, misleading doctors, and potentially filing false tax returns in connection with the company’s defunct business.
Her husband and company COO, Ajay Wadhwa, and Theranos lawyer, Jeffrey Black, took the stand on Thursday. The testimony painted a similar picture to the Journal’s published account of Theranos in 2016: A superior product under intense pressure by contract demands to deliver.
Wadhwa said Holmes was anxious about meeting high demands from drug makers in order to reach FDA approval.
“Theranos was running out of time and funds,” Wadhwa said, and wanted to move faster to keep up with larger competitors.
Wadhwa detailed meetings with Dr. Jennifer Jones-Johnson, a former astronaut who joined Theranos as its program director and became known as the chief execution officer.
Jones-Johnson was in charge of signing with larger companies with large demands and providing the company with money. She was a key person in helping Theranos to sign important deals.
Analog technology did not fit Theranos’ personal needs, and wasn’t the best solution, Wadhwa said. The company thought that being able to scale were the best bet, which meant adopting digital technology.
Wadhwa was found the next day to be being the first person to touch and try out a new digital system. It was an alarmingly bad experience, he said.
He said that there was no logical way to use a digital system, as Theranos had expected.
It was then that Holmes came to Wadhwa to declare the news.
He said Theranos needed to make adjustments and fix the problems quickly.