Elizabeth Holmes tells the jury that at least part of Theranos was real

So far, Elizabeth Holmes’ defense has done her best to show us that Theranos had a real device and worked with real drug companies. That was actually not up for discussion, especially not in the period the defense asked about. Still, the point seems to be: Hey, look, some things in Theranos were real.

But today, in her wire fraud trial, we saw a science presentation — not real science, just the marketing version. We saw the guts of Theranos devices. We heard the company is iterating on the device. We saw emails with pharmaceutical companies.

Theranos’s work with pharmaceutical companies was never in question; we saw money Theranos was making from that work early in the prosecution’s case, with Comptroller Danise Yam. The problem with pharmaceutical companies was the “validation reports” Theranos produced on its own technology in those partnerships. While those reports were written by Theranos employees, investors said they believed the reports were written by the drug companies.

To make matters worse, we saw two reports with logos for Schering-Plough and Pfizer. The Schering-Plough memo was also published compared to the original version. When Theranos first sent the report to Schering-Plough, the drug company’s logo was not on it and read that Theranos “gave accurate and accurate results.” The version Walgreens saw had the Schering-Plough logo and language that said, “give more accurate and precise results… than current ‘gold standard’ reference methods.”

Investors testified that the work Theranos had done with pharmaceutical companies and the armed forces had been significant. They thought this meant that the drug companies and the Department of Defense had co-signed the technology and used it in clinical trials and in Afghanistan — a lie journalist Roger Parloff also heard. Today, Holmes acknowledged that Theranos was not cooperating with the Defense Department at all.

Her testimony was brief – the trial was postponed for an hour and a half due to a meeting in the judge’s chambers between lawyers from both sides. The reason for the meeting was not explained. The court hearing also ended relatively early, at 1 p.m. Pacific.

Holmes, who seemed at ease on the booth, was asked to explain why the cartridges on the Series 1.0 device were not working. They were stacked on top of each other and held together with glue, but the glue could come loose, causing the stacked layers to fall apart so they wouldn’t work properly. I wasn’t quite sure why this would matter – we knew Theranos iterated on the device.

Her answers were largely non-technical; whether that was because she had no technical knowledge, or because she wanted to make sure she didn’t confuse the jury, it wasn’t clear to me. Sometimes Holmes’ testimony chopped so close to documents that we were shown it was funny. After reading emails, she would be asked what they meant, and would reply with, almost word for word, a sentence in the email. In a slideshow, one slide was titled “Success Completed.” Holmes’ attorney, Kevin Downey, asked her what success meant in that context.

“One success was that we had successfully achieved the objectives of the program,” she replied. And as for the performance of Theranos? “I remember it was very good.”

The “complete successes,” in Theranos parlance, were almost all pharmaceutical company preliminary studies. An exception was a study with Stanford, which was actually published.

The contours of the work with many pharmaceutical companies were largely the same. A major pharmaceutical company would do preliminary work with Theranos, which Holmes would typically describe as successful. But no clinical trial manifested itself. This was true for Merck, Bristol Myers Squibb and Celgene. Theranos did make tests for AstraZeneca and was working on a clinical trial for Centocor.

In the Centocor trial, the Theranos device was tested with standard labs. When asked how her device fared in comparison, Holmes said, “It performed well.” Many of her answers were short and sober, as if she were talking about the weather.

However, the most interesting parts of her testimony had to do with Pfizer and Schering-Plough. Crucially, in order to be found guilty of wire transfer fraud, Holmes must show that she knew she was lying when she gave investors bad information – mistakes are not illegal.

So we saw some emails. At Schering-Plough, Constance Cullen was Theranos’ main point of contact. (Cullen previously testified, before the prosecution.) As Cullen testified, her company was bought by Merck while in contact with Holmes, and as she was put in charge of a newly combined group, work with Theranos fell by the wayside.

In an email from a Theranos employee to Holmes, the employee wrote that Cullen was inundated with work from the takeover. “Overall it was great,” the email continued. “I think calling her every morning for the past three weeks has finally paid off…” Holmes was asked directly if Cullen had informed her of Schering-Plough’s low opinion of Theranos’s tests. Holmes said no.

You can see where this is going – a all Generous reading of the situation is that Holmes didn’t realize the technology was bad or Merck didn’t want to work with her, she just thought her contact dropped the ball.

As for Pfizer, the defense produced emails showing that Holmes had continued to talk with the company about a partnership well into 2015. In that email, a Pfizer employee suggested using Theranos’ Walgreens centers as clinical trial sites. This did not materialize and Thearnos was not working on a clinical trial for Pfizer.

It’s possible to believe that all of these pharmaceutical companies have looked at Theranos’ device and chose not to proceed for unrelated reasons – but that’s a big deal. All in all, we’ve seen a lot of pharmaceutical companies move on to the real thing with Theranos.

However, the thing about today’s presentation is that Theranos’ early work is not disputed. According to the government, the fraud only started later. Besides, liars don’t lie all the time.

However, as she gets closer to testifying about some of the other areas of interest, I hope there’s just as much concurrent email evidence. Now that I had heard Parloff’s tapes of Holmes, I noticed how confident she had lied and how believable she sounded. Being preceded by those tapes means that no matter how confident or reliable she sounds, I still doubt what she’s saying unless there’s something else to back it up.

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