Holmes began testifying Friday afternoon in the San Jose courtroom during the first day of defense. She is also expected to testify Monday and Tuesday next week, the only days the court is in court.
Holmes, who was once hailed as the next Steve Jobs, faces 11 federal charges of fraud for allegations that she deliberately misled investors, doctors and patients about her company’s ability to take blood samples to take their money. Holmes has pleaded not guilty and faces up to 20 years in prison and a $ 250,000 fine plus repayment for each charge.
Whether Holmes would testify was a big question in the trial. She has attended the trial every day, typically with her mother and occasionally her partner. On Friday, her partner, mother and at least one person who appeared to be her friend were present. She smiled as she took the stand and under much of her testimony.
Holmes’ lawyer Kevin Downey asked her if she thought Theranos had developed technology capable of taking any blood sample. “I did,” Holmes testified.
“We worked for years with teams of scientists and engineers to miniaturize all the technologies in a laboratory. The central part of that was a formula to be able to run tests on small samples and run that formula,” Holmes testified, adding that in 2009 or 2010 the company had a “breakthrough”.
Downey then stepped back to establish the background of the company’s origins, including how she was a chemical engineering student at Stanford University and her first patent application.
“I started talking to my parents and they let me take the money they had saved so I could go to college to work on my patent,” she testified. “So I went to try to travel or borrow money.”
“Could you?” asked her lawyer.
“It was me,” she replied.
The original patent was not for blood tests. On the contrary, she started with the idea of a pill that could be swallowed without any other action, she said.
Holmes went on to explain the evolution of her idea from a pill to a patch to a tabletop.
“When I started talking to people about what might be useful for a pharmaceutical clinical trial, I learned that people were interested in a tabletop or a tabletop, and we went over to trying to build it,” she said.
She testified that she then built a prototype and set out to raise funding to develop it into a product. She testified that she was introduced to Silicon Valley venture capitalist Don Lucas “by someone who had gone to college with my father.”
“I knew him as someone who focused on building big companies in the long run,” she testified, adding that he was making a “very comprehensive relocation process.”
Holmes said the process involved “giving him a lot of information about our patents.”
“He asked us to get a review of our finances,” she testified. “He wanted copies of contracts and other information about the company. He wanted to talk to people we talked to and interacted with.”
He eventually invested and served as Theranos’ chairman of the board for a number of years.
Holmes’ lawyers have previously stated in court documents that she can claim that she was the victim of a decade-long violent relationship with Ramesh “Sunny” Balwani, who served as the company’s COO. They indicated that she “is likely to testify as to the reasons why she believed, trusted and approached Mr. Balwani,” who is nearly 20 years older than her. The cases were from 2020 and closed just before the trial started with jury selection at the end of August. Balwani, according to a lawsuit from his lawyers, “strongly rejects” the claims.
Her lawyers also indicated plans to have an expert testify about the psychological, emotional and sexual abuse she experienced at the hands of Balwani.
Holmes, who dropped out of Stanford University, founded Theranos in 2003 at the age of 19 with the mission to revolutionize blood tests. Inspired by her stated fear of needles, the company promised patients the opportunity to test for conditions such as cancer and diabetes with just a few drops of blood. Once valued at $ 9 billion, Theranos had partnered with Walgreens and Safeway and a who’s who list of board members and investors.
Then it all exploded. A judgmental study conducted by The Wall Street Journal in October 2015 questioned the properties of the company’s proprietary blood testing machine, Edison, as well as Theranos’ test methods. Theranos was subsequently sued by investors for fraud and had his U.S. blood test license revoked. The firm settled charges of “massive fraud” with the Securities and Exchange Commission and eventually dissolved in September 2018.