Holmes Defense Challenges Lab Director's Testimony About Theranos Testing Procedures

The defense team for Elizabeth Holmes, the former CEO of the blood-testing company Theranos who is on trial for fraud charges, spent much of their third day of cross-examination of former Theranos laboratory director Adam Rosendorff talking about proficiency testing on Friday.

Proficiency testing is required by federal regulations for clinical labs that do blood work. The testing compares a lab's results on particular specimens to the results from other labs testing the same specimens. The purpose of proficiency testing is to evaluate the accuracy and reliability of a lab's testing operations.

Proficiency testing at Theranos became an issue earlier in Holmes' trial when lab associate Erika Cheung testified that comparison of results from blood tests run on the Theranos Edison machines were inconsistent with those run on standard machines, and that results from re-runs on the Edisons were often hugely different than the first results.

Responding to questions from prosecutors earlier this week, Rosendorff testified earlier that there was no formal process for doing proficiency testing on the Edisons during the entire time he worked at the company.

Defense attorney Lance Wade methodically went through a flurry of documents to establish that Rosendorff was in fact involved in preparing the Standard Operating Procedure (SOP) for a different kind of proficiency testing -- known as an alternative assessment protocol, or AAP -- to be used specifically on the Edison machines.

A PowerPoint put together by Rosendorff's second-in-command explained that the AAP was necessary because the Theranos tests "have no peer groups" and the "normal process" of proficiency testing is therefore "not appropriate."

Rosendorff conceded that federal regulations allowed an AAP and that the PowerPoint "reflected what I'd written in the SOP." He also acknowledged telling prosecutors in pre-trial meetings that there were "good results" using the alternative method on the Edisons.

But he continued to insist that the alternative procedure was "incomplete" and "was not being implemented" while he worked at Theranos.

Holmes is charged with making false and misleading statements to investors, doctors and patients about Theranos' blood-testing technology. If convicted, she faces up to 20 years in prison and $3 million in fines.

Wade also pressed Rosendorff on his interactions with doctors who had questions about their patients' results using the Theranos method. In one case, Rosendorff spoke with a doctor about a patient's testosterone results but then ignored a request from the same doctor for a second call.

Rosendorff testified that he was "becoming frustrated at his inability to explain the discrepant results" during this period.

Wade ended the day, but not his cross-examination, by showing Rosendorff an email exchange about another doctor who questioned a patient's lipid panel results (testing for cholesterol levels) as "not consistent with the patient's history."

Sunny Balwani, Theranos' COO, forwarded Rosendorff an internal string reflecting the company's "confidence" about its fingerstick lipid panel blood tests based on comparison to traditional venous blood draws.

Rosendorff reported back to Balwani that he had called the doctor, that he had been "emphatic … regarding our rigorous validation and quality process," that he "did not agree with any of [the doctor's] insinuations," and that his review of the relevant information showed that "all QC is in order."

Balwani responded that "Some will always be doubters … with new technology."

The trial will continue on Tuesday next week.