Elizabeth Holmes admits she added drug manufacturer logos to Theranos reports
SAN JOSE, CALIF. – In a stunning confession, Elizabeth Holmes admitted that she was the one who put the logos of giant drug manufacturers on Theranos laboratory reports, but insisted that she was not about to mislead investors or business partners.
“I wish I had done it differently,” said Holmes, clad in a dark green dress and black blazer, to the jury from the stand. On the third day she testified, Holmes responded directly to the top government allegations against her.
Federal prosecutors allege that Holmes misled investors in part by using unauthorized due diligence reports from Pfizer and Schering-Plow, whose company logos were on the documents. The jury was repeatedly shown the Theranos reports that Holmes had sent to Walgreens executives with the logos on them. Witnesses from the pharmaceutical companies testified that they never approved the use of the logos.
Holmes said she was the one who added the logos to the reports “because this work was done in partnership with these companies and I was trying to get that across,” she said. But Holmes claimed it was not intended to falsely convey that the companies produced the lab reports.
“Do you want to give that impression?” asked Kevin Downey, a Holmes attorney.
“No, but I heard that statement in this case and I wish I had done it differently,” said Holmes.
Theranos founder and former CEO Elizabeth Holmes, along with her mother Noel Holmes (L) and partner Billy Evans, arrive for their trial on November 23, 2021 at the Robert F. Peckham Federal Building in San Jose, California.
Ethan Swope | Getty Images
“Did you try to hide from Pfizer that you included the Pfizer logo at the top of the report you sent to Walgreens in 2010?” asked Downey.
“Not at all,” said Holmes.
Holmes said an early goal for Theranos was to partner with retail giants. She said she reached “everyone” including Target, CVS, Walmart, Walgreens and Safeway.
Walgreens became a key partner for Theranos, introducing wellness centers in 40 of its Arizona stores. However, Walgreens terminated its partnership with the start-up in 2016 and sued the company for breach of contract.
At the booth for the first time, the jury heard Holmes mention the name of her top manager and at times romantic partner Ramesh “Sunny” Balwani. Holmes testified that Balwani was involved in negotiations with Walgreens along with some lawyers.
To refute another major allegation, Holmes spoke about using third-party equipment to test patients’ blood. She testified that Theranos turned to modified equipment as a workaround because there were too many samples for her laboratory.
In addition, Holmes told the jury that Theranos did not share this information with investors or business partners because they believed it was intellectual information.
“This was an invention that we understood from our lawyer, that we had to protect as a trade secret and if we divulged that trade secret,” said Holmes. “The advice was to keep it confidential so that Theranos could have a chance to benefit from this invention.”
Holmes admitted that she was fully aware of the challenges in the laboratory.
“There are numbers, there are always challenges,” said Holmes to the jury. “We have worked constantly to make sure we have the right components in the machine to handle all of the tests that will ultimately be the test list for retailers.”
Holmes also spoke of the information she shared with her board of directors, including former Secretary of Defense James Mattis, former Secretary of State Henry Kissinger, former Wells Fargo CEO Richard Kovacevich and Senator Sam Nunn.
Downey asked Holmes to lead the jury through a meeting in October 2013.
“I remember speaking with board members asking for advice on how we are going to set this business up to be successful over the long term,” said Holmes. “What I should be focusing on internally to do this.”
Holmes said its board members received $ 150,000 a year in addition to 500,000 Theranos shares. Henry Kissinger received an additional $ 500,000 in consulting fees, according to Holmes.
“We told the board that we had these trade secrets that we thought were a big deal and that we need to protect,” said Holmes, adding she remembered “discussing with the board whether this invention should actually be treated as a trade ”. Secret.”
Holmes was faced with a sea of camera crews on Tuesday when she arrived at the courthouse, and a bystander shouted “God bless you girl boss” repeatedly as she walked inside.
Early that morning, as reporters and members of the public queued outside the Robert F. Peckham Federal Building, a bystander arrived with a suitcase full of blonde wigs, black turtlenecks, red lipstick, and “blood energy drink.”
Artist Danielle Baskin sold the Holmes costumes before security officials told her they couldn’t sell goods on federal property. Baskin said she was not a supporter of Holmes but wanted to come to the trial and “see what it would be like to experience her energy”.