Holmes claimed that Theranos could perform “more than 1,000 tests” – 12 did

Elizabeth Holmes, founder of Theranos Inc., on the left, arrives in federal court in San Jose, California, on Tuesday, October 12, 2021.
Enlarge / Elizabeth Holmes, founder of Theranos Inc., on the left, arrives in federal court in San Jose, California, on Tuesday, October 12, 2021.

The jury in Elizabeth Holmes ‘criminal case heard from Theranos’ founder and former CEO for the first time yesterday. What she said, however, did not come from the witness stand – Holmes has not yet been called to testify. On the contrary, the prosecution played interviews recorded by journalist Roger Parloff, who wrote a cover story about Holmes while working for Forbes magazine.

Over the course of 10 hours of recorded interviews, Holmes made a number of remarkable and judgmental statements.

In a clip, Parloff asked her how many tests Theranos can perform. “I think we can say more than 1,000,” Holmes said.

In another excerpt, the jury heard Holmes tell the reporter that “the fact that we have a single device that can perform any test” was a trade secret.

The jury also heard Parloff ask Holmes if Theranos could essentially replace Quest Diagnostics, one of the country’s largest medical laboratories. Quest could do 600 some tests, Parloff pointed out to Holmes, including tissue biopsies.

“We can do all of these tests so we can deliver data back to clinicians for all of the same tests,” Holmes said after a brief hesitation. When asked why she hesitated and did not say “replaced”, she replied: “We treat the samples in different ways, let’s say so,” and assured Parloff that Theranos’ data is still of “highest quality.”

Many of these statements were outright lies or, more charitably, danced around the truth. In fact, the Theranos could not perform more than 12 tests on their Edison units, former laboratory staff member Erika Cheung told the jury earlier in the trial. Even then, the Edison analyzer could only run one type of test for one patient at a given time, Cheung said when she took a stand in September.

Holmes also shared with Parloff the reported reports bearing various pharmaceutical company logos – including Pfizer, Schering-Plow and GlaxoSmithKline. At the booth, Parloff confirmed that she never told him that the reports were produced by Theranos and had not been approved by those companies.

Parloff also told the jury that Holmes never revealed that most of their tests were performed using third-party devices, despite asking her that question directly.

Article and correction

When Parloff’s article was published in June 2014, it was part of Holmes’ package sent to investors. It’s easy to see why. In the article, Parloff described Theranos’ fingertip method – “To me, it felt more like a push than a puncture” – and he passed on the large number of tests the company could do at a lower cost than the competition.

“Theranos’ test can be performed on just a few drops of blood or about 1/100 to 1 / 1,000 of the amount that would normally be required,” Parloff wrote, “an extraordinary potential blessing for frequently tested hospital patients or cancer victims., The elderly, infants , children, overweight, those taking anticoagulants, or simply anyone who has an aversion to blood tests. “

For Theranos, the article was a marketing goldmine. The company even linked to it from its website.

Still, in July 2015, at a Theranos demonstration at a board member’s law firm, Parloff noticed something strange. The company had set up two devices, one to run a potassium test, another to run an Ebola test. “I was a little surprised that they needed two machines because I thought you could do anything,” he said told the court.

Months later, after The Wall Street Journal published its study of Theranos, Parloff went back to Holmes to ask her to clarify points in the article. Specifically, he asked her how many tests Theranos could perform on his proprietary device in late 2014, the date mentioned in his article. “She replied, ’50, 60, maybe 70. We can get you that number,” Parloff told the court.

In the end, he issued a “lengthy correction” in which he selected several allegations from Holmes for him.

Uneven test results

Earlier in the day, the jury heard from Dr. Mark Burnes and his patient, Merhl Ellsworth. Although Ellsworth’s time on the stand was short, testimony from Burnes, who ordered blood samples for him with Theranos, was revealing.

In the summer of 2015, the time of the tests, Ellsworth was a retired dentist who was about to go on a two-year mission trip to Asia. He had checked in with his doctor to make sure he was able to travel. Burnes ordered a prostate cancer screening that Ellsworth had undergone before, and he recommended Theranos as the company’s test was cheaper than the competition.

What followed sounded remarkably similar to another patient’s experience: When the results came back, Ellsworth’s prostate – specific antigenic high was 26.1, a potential sign of prostate cancer. Four days later, Ellsworth took another test. This time, the results were 1.71, which is similar to previous results before Theranos and did not indicate the presence of cancer.

Still, Burnes was not sure of any of the numbers and called Theranos. The regional laboratory director told him that the first result was probably a mistake. Burnes said he wanted Ellsworth to take the test for the third time, and he asked the regional director if Theranos would reimburse the cost, which it did.

The third test came high again – 22.9. Burnes called Theranos, Narrator the court that in the conversation “I expressed a lack of confidence in their samples.” He asked Theranos to pay for another test, this time with a venous pull. The company agreed and the result was normal – 0.95.

Inside Theranos, director Daniel Young and other staff had discussed the erroneous results in a long email chain, which the jury had then forwarded to Holmes.

At cross-examination, Holmes’ lawyer asked Burnes if he was aware of the error rate for medical diagnostic laboratories. Earlier, Burnes had pointed out that in his 30 years as a medic, he has interpreted over 10,000 tests for prostate-specific antigen. He told the defense attorney that yes, laboratories can be wrong. But “they are very rare.”

In March 2016, almost a year after Theranos received Ellsworth’s blood, the company sent Burnes a corrected laboratory report in which they had canceled the high numbers. The PSA results, it said, “should not be used by an abundance of caution.”

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