What we learned this week in the trial of Elizabeth Holmes

By Rishi Iyengar and Sara Ashley O’Brien, CNN Business

The trial of Theranos founder Elizabeth Holmes concluded its fourth week on Friday, with the lengthiest witness testimony of the trial so far.

That testimony has come from former Theranos lab director Adam Rosendorff, who has been on the stand for four days and will continue his testimony Tuesday. Rosendorff said on the stand that he “felt pressured to vouch for tests that I did not have confidence in” and that he “felt obligated from a moral and ethical perspective” to tell the public what was happening at the company.

The defense has argued that the accuracy and reliability of the company’s tests were not Holmes’ responsibility, and that the legal responsibility fell to those running the lab.

A key source revealed

Rosendorff testified Tuesday that after leaving the company he spoke off the record to then Wall Street Journal reporter John Carreyrou because he “felt obligated from a moral and ethical perspective to alert the public.” Carreyrou, who broke the company wide open in 2015, tweeted that Rosendorff was “my first and most important source.”

An outside scientist

The only other witness to take the stand this week was Victoria Sung, a scientist who interacted with Theranos while working at bio pharma company Celgene around 2009. Celgene had entered into an agreement with Theranos at the time to run blood tests for a drug it was developing to help treat anemia, Sung testified.

But the company ultimately decided against using Theranos, she said, because in a comparison with more established companies its “results didn’t match up or coordinate or align as closely as we would like.”

An update on Holmes’ possible abuse defense

More court documents were unsealed this week pertaining to the pre-trial bombshell that Holmes may claim she was the victim of intimate partner violence at the hands of her ex-boyfriend and former Theranos chief operating officer, Ramesh “Sunny” Balwani. The defense’s argument would likely be that, because she was reliant on him within that context, she lacked the intent to deceive.

Holmes will be able to introduce her expert witness regarding this defense, despite the government’s attempt to have it excluded from the trial, according to Judge Edward Davila’s order from May 2021, which was unsealed this week after Dow Jones, publisher of The Wall Street Journal, moved to have a trove of filings made public.

More details on Holmes’ level of secrecy

Among other documents unsealed this week were notes from two interviews with former employees who spoke to the government about their knowledge of the relationship between Holmes and Balwani. One of the employees was a former personal assistant and described Holmes as being “very private.”

Some sensitive items included Holmes’ food preferences. “Lists of restocking Holmes’ food, at her residence and work, were kept private,” the employee told the government. “Holmes was private about this because she was vegan for a period and did not want it to be made a big deal.”

A second former employee, whose job included ensuring non-disclosure agreements were filed, said that “everyone had to sign non-disclosure agreements when they came to Theranos, including the person that came in to water the plants.”

A crucial witness

During cross examination on Friday, Rosendorff — the former Theranos lab director — emerged as one of the key witnesses in the trial. This was day four of his testimony and he is set to continue for another full day on Tuesday — the longest of any witness by far.

In October 2014, Rosendorff was forwarded emails from concerned physicians who wanted to speak to someone in the lab about a patient’s test results. A week went by after follow-up emails, and Rosendorff still had not returned the call.

In another instance in October, a doctor had asked for a follow-up call with Rosendorff after speaking to him earlier. Rosendorff, who was responsible for answering medical questions, was slow to respond.

“I didn’t feel I had a good explanation for the discrepant testosterone levels, and I really didn’t know what I could tell the physician more than I told him on the first phone call,” Rosendorff said.

The defense was attempting to show that Rosendorff was shirking his own responsibilities, and trying to find inconsistencies in his argument that he was kept out of the loop as flaws in Theranos’ testing were becoming more apparent.

“I was becoming frustrated at my inability to explain discrepant results,” Rosendorff said. “It culminated on one or two occasions with my refusal to justify the discrepant results to physicians.”

Balwani ended up responding directly to a physician, sending back a detailed response specifically addressing issues raised. He also said that every lab has unexpected results, and to investigate any inconsistencies “which is what we always do.”

Rosendorff also confirmed he had opportunities to meet with the senior leadership team and raise concerns.

Trying to keep a journalist out of the courtroom

Carreyrou, a Pulitzer Prize-winning reporter who broke the Theranos story, is also among dozens of possible witnesses Holmes may call to testify, although he’s yet to be subpoenaed.

In a court filing Friday, his attorneys said “it remains entirely unclear whether or why Holmes would actually want to call Carreyrou to the stand,” and they’re chalking it up to a “ruse” to keep Carreyrou from covering the story through his podcast.

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