Elizabeth Holmes

Theranos' Last Lab Director ‘Turned Over Rocks' to Try to Get Company Back on Track

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The defense in the criminal fraud trial of Theranos founder and CEO Elizabeth Holmes spent much of Wednesday shoring up the qualifications of a former Theranos lab director who voided thousands of patient blood tests, aiming to show that Holmes "fully supported" that and many other steps taken to try to turn the company around.

Holmes is charged with 12 counts of defrauding investors, doctors and patients by making false and misleading statements about the now-defunct company's blood-testing technology.

Attorney Lance Wade first pointed out the many awards and educational pedigree of Dr. Kingshuk Das, the company's final lab director, then asked the doctor if he was the type of thorough scientist who would "dig in" to issues before reaching conclusions. Das responded, "Yes."

Wade also brought out the fact that Das was the first lab director who reported directly to Holmes, while earlier lab directors had reported to her business partner and alleged co-conspirator, Sunny Balwani. Balwani left the company shortly after Das came on board.

Das testified that the lab "was not well run" historically and that he was hired to "turn over rocks" to improve things.

Holmes, Das agreed, "was dedicated to giving [him] all the resources" he needed in that effort.

Wade then walked Das through the series of new policies, procedures, personnel changes and training requirements in the lab implemented on his watch, all with the support of Holmes. Wade also contrasted Das's experience and qualifications with that of Holmes, who the doctor said was not qualified to run the lab on her own.

Das testified that Holmes supported his decision to fire a dishonest employee, agreeing that she "wasn't going to tolerate any integrity issues."

He said that he was asked to "look under the hood of" a next-generation Theranos blood analyzer and weigh in on the standards for its development. He testified that he supported Holmes' "mission" and "vision" for Theranos from the time he started in December 2015 until his tenure ended in June 2018.

The lengthy cross-examination left the impression that, with Das reporting directly to Holmes and with Balwani out of the picture, Theranos was cleaning house while continuing in its quest to revolutionize blood-testing technology.

As to Das's damaging testimony on Tuesday that he voided 50,000-60,000 patient test results in response to a scathing report by the Centers for Medicare & Medicaid Services (CMS) -- constituting all of the tests done on the company's Edison devices in 2014 and 2015 -- Wade tried to put the number in context, asking Das if he was aware that Theranos did some 8 million tests over the course of its existence.

Das said he did not know what the company's overall total was but understood that the Newark facility alone tested 800,000-900,000 patients per year. When Wade asked Das if Holmes "fully supported the decision to void" the Edison results, Das said that she did.

Prosecutor Robert Leach followed up with questions establishing that Das was hired shortly after a "critical" Wall Street Journal article on the many problems with the company's proprietary technology but that he was never told about earlier "alarm bells" rung by Theranos employees.

The jury also heard from another Theranos investor, Alan Eisenman, who with his family invested close to $1.2 million in Theranos in 2006 and another $99,990 in 2013.

A clearly frustrated Eisenman testified that his early access to Holmes and information about the company dried up by 2010. It was not until the company was seeking additional funding that he received "an unusually friendly" email from Balwani.

Eisenman said that he decided to make the second investment based on special pricing given to existing shareholders and his belief that the company had successfully developed the much-touted fingerstick technology and was at that point looking to scale up.

Eisenman testified about an increasingly tense exchange of emails with Holmes and Balwani in 2014 and 2015 in which he unsuccessfully tried to find out when his investment would pay off, culminating in a threat from Balwani to bring in the company's lawyers if Eisenman persisted in asking for information.

The second Eisenman investment is the basis for one of the wire fraud counts in the indictment.

The trial will resume on Monday and run every weekday next week.

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