For a time, Holmes was hailed as a visionary. A Stanford University dropout, she founded what would become Theranos in 2003 at age 19. The company claimed to have developed revolutionary blood testing technology that could accurately, reliably and efficiently conduct a range of tests using just a few drops of blood.
Holmes raised $945 million from investors, struck key retail partnerships, and attracted a who’s who list of board members and investors who’d bought into her claims. She was lauded on magazine covers as the richest self-made woman and “the next Steve Jobs,” an image she helped cultivate by dressing the part in her signature black turtleneck. At its peak, her startup was valued at $9 billion. Then, it all began to unravel when a Wall Street Journal reporter started poking holes in the company’s claims.
In her testimony, she said she believed Theranos had developed technology capable of running any blood test. She also testified that its proprietary blood analyzer machine was only ever used to perform 12 small sample tests, confirming what jurors heard during the government’s case.
First indicted more than three years ago, the start of Holmes’ highly anticipated trial faced numerous delays due to the ongoing pandemic and the birth of her first child this summer. Holmes, now 37, is fighting nine counts of wire fraud and two counts of conspiracy to commit wire fraud. The accusations are that she engaged in a scheme to defraud investors from 2010 to 2015, as well as a scheme to defraud doctors and patients who paid for its blood testing services from 2013 to 2016.
She faces up to 20 years in prison, as well as a fine of $250,000, plus restitution, for each count of wire fraud and each conspiracy count. She has pleaded not guilty.
“For the defense, this is an opportunity for the jury to meet the ‘real’ Elizabeth Holmes,” said Miriam Baer, a law professor at Brooklyn Law School, who noted that the defense did not have to put on a case at all, and that the burden of proof is on the prosecution.
“If Holmes paints herself as a ‘big ideas’ innovator who happened to be unaware of the company’s failures or misstatements, she can help her case — or at least sow doubt among several jurors,” said Baer. “And she can also help her case marginally if she appears more sympathetic or likeable than the person portrayed by the government’s witnesses.”
Her testimony so far has focused on the earliest days of the company, well before the time of the alleged fraud. Holmes, who was frequently smiling on the stand, testified about her original idea of developing a pill that could be swallowed and used for testing purposes and how that evolved into Theranos.
She spoke to the caliber of individuals she attracted to help her build the company, beginning with her chemical engineering professor Channing Robertson, who would become its first board member. She testified about early fundraising efforts and being introduced to Silicon Valley venture capitalist Don Lucas, who would invest and become chairman of the board. She also spoke about signing contracts with two major pharmaceutical companies, and the first demonstration of its technology in Switzerland for Novartis in 2006.
“We ran our technology in Switzerland at one of their offices and processed samples on cartridges that we brought there, and then had data wirelessly transmitted back to our site in California,” Holmes said, testifying that the demonstration was successful.
The testimony contradicts what reporter John Carreyrou — the journalist who first broke open the story of Theranos for the Journal — detailed in “Bad Blood,” his definitive book on the rise and fall of the company. “One of the two readers Elizabeth took to Switzerland had malfunctioned when they got there. The employees she brought with her had stayed up all night trying to get it to work,” the book reads, noting that “to mask the problem” a team in California “beamed over a fake result.”
Cross examination expected to be “really, really rigorous”
As Weisberg noted to CNN Business, anything Holmes testifies about could potentially be impeached by what she’s said and written over the years.
Baer noted that, “if she appears to evade questions, she may inadvertently strengthen the government’s narrative.”
Nearly 20 years Holmes’ senior, the pair met in 2002 on a trip to Beijing through Stanford’s Mandarin program.
When will jurors deliberate?
Before Holmes was called to the witness stand Friday afternoon, Judge Edward Davila informed jurors the case would not be done by December 6, a date he said he’d previously given them. An updated calendar on the court’s website now has the trial scheduled through December 17. This comes as the judge has added numerous court days in November, as well as stretched the hours for sessions.
Outside the presence of jurors, Davila addressed attorneys about the trial’s pacing: “I don’t think any of you — I hope none of you are being strategic as far as timing. And I say that because my sense is that none of you want this jury to be deliberating this case on the holiday week in December, the third week of December or any week like that.”
He continued: “We’re concerned about the jury and their comfort level and keeping them engaged,” adding that having a jury deliberate over a holiday week “doesn’t benefit either side.”
The prosecution has expressed frustration with the amount of time the defense has taken up during its case, saying that it exceeded the number of hours the government has spent questioning its own witnesses.
Eying the calendar could indeed be a strategic move for the defense, according to George Demos, a former Securities and Exchange Commission prosecutor and an adjunct law professor at the UC Davis School of Law. “The defense may aim to have the case submitted to the jury right before Christmas because that’s not the time of year a lot of people would feel comfortable sending a new mother to jail,” he told CNN Business.