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Wednesday, December 1, 2021

International Finance: Holmes Paints Herself as Visionary, Leaves Out Damning Details

Starting with photographs displaying the insides of her blood-testing analyzer, the Theranos Inc. founder strove to look and sound for the jury like a chief executive who was operating at a high level, focused on the big-picture demands of driving a cutting-edge company to success.

In the first steps of what amounts to a legal high-wire act, Holmes has been steady. In her initial hour-long testimony Friday, she strategically planted in jurors’ minds the youth and idealism required to get Theranos started. By Monday she spent hours delving into contracts with giant pharmaceutical companies that she signed just five years later.

The goal is to wipe the slate clean, to give the jury an entirely new notion of who she is following 10 weeks of testimony by government witnesses who depicted her as deeply deceptive.

“We thought this was a really big idea because these robots used in the traditional lab had not been miniaturized,” Holmes testified Monday. She explained how Theranos had overcome the failures in a presentation for Novartis AG to build a new 3.0 version of its blood-testing machine that removed human error in traditional analyzers. “Human processing would not be required in the same way with this device.”

Read More: Elizabeth Holmes Takes Center Stage at Theranos Fraud Trial

Holmes is off to a good start, said Andrey Spektor, a former federal prosecutor and criminal defense lawyer at Bryan Cave Leighton Paisner in New York.

“The defense has three general goals in mind for Ms. Holmes’ testimony: Humanize her, question evidence of knowledge and intent, and shake the jury’s confidence in some of the government’s witnesses,” he said in an email. “They have already achieved some success with all three.”

But by the time prosecutors start questioning Holmes, they may seek to characterize the picture of her as an innovative and hard-charging entrepreneur as less than candid.

In her discussion of two big milestones in the early years of Theranos — her efforts to collaborate with the military and big pharmaceutical companies — Holmes steered clear of what the government contends are glaring lies.

She told jurors that Theranos made contact with the Department of Defense in 2008 and 2009 for various projects, including one to determine “whether there were markers in the blood that could predict PTSD.”

While Holmes acknowledged her goal to arrive at a Defense Department contract was unsuccessful, she didn’t address prosecutors’ allegations that she falsely represented to investors and business partners that Theranos technology was deployed in helicopters and on the battlefield.

Read More: Holmes’s Push for Theranos Approval Drew Harsh Pfizer Response

Likewise, Holmes offered a blow-by-blow account of her work with various drug giants, including some documentation of Theranos’ communication with companies including GlaxoSmithKline Plc, Celgene Corp. and Bristol-Myers Squibb Co.

Her attorney, Kevin Downey, asked her about communications with the Mayo Clinic. “Did you believe this was a validation of Theranos’s technology?” he asked his client. “I did,” Holmes replied.

The lawyer also showed the jury emails between Holmes and at least one Pfizer Inc. executive as recently as 2015 to demonstrate that Holmes was of the belief she had an ongoing relationship with the company.

But her testimony didn’t touch the government’s claim that years earlier, when Pfizer and Schering-Plough Corp. refused to endorse her technology, Theranos resorted to misappropriating the letterhead logos of those companies and issuing fabricated reports to prospective investors.

Near the end of her testimony Monday, Holmes was asked by Downey if Theranos scientists told her the company’s machines could run a full range of blood tests. It was an attempt to diffuse a key government allegation that Holmes promoted Theranos as being able to run hundreds, even thousands, of blood tests on a tiny amount of blood even though she knew it could only accurately perform 12.

Holmes said a 2010 email from one of the company’s early lead scientists, Ian Gibbons, conveyed “our ability to expand the existing capabilities” and tests running on the company’s platform.

It’s an example of how Holmes can point to other employees to say their opinions informed hers — and convince the jury she sincerely believed her company was going places until it eventually collapsed in 2018. But it also flies in the face of government evidence that she intentionally and repeatedly exaggerated her technology’s capabilities.

“There is no doubt Theranos claimed things that were not true, but how much did Ms. Holmes know?” Spektor said. “Her testimony is the best evidence of that critical element, and if the jurors think she is lying to them, they will convict her.“

James Mackreides
'Mac' is a short tempered former helicopter pilot , now a writer based in Sofia, Bulgaria. Loves dogs, the outdoors and staying far away from the ocean.

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