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After a tedious day of bickering, Victoria Sung appeared like manna from heaven – to tell us that Theranos’ tests suck.
Sung was working at Celgene when he contracted with Theranos. Her testimony was brief and concise: Celgene had not “globally validated” Theranos technology, she said. It would have taken more work than she had done with the Theranos tests. The work she showed in court from 2012 demonstrated that Theranos performed dismally on standard tests – often returning results “out of reach”.
We’ll get to the bickering in a minute, I promise, but Sung is a teaser for much of United States v. Elizabeth holmes we haven’t explored much: Theranos’ relationship with pharmaceutical companies. An allegation that prosecutor Robert Leach made in his opening statement was that Holmes had deceived Walgreens about his dealings with drug companies. During the testimony of the former employee Surekha Gangakhedkar a little over a week ago, she said that she did not believe that pharmaceutical company GlaxoSmithKline’s report on Theranos technology had “exhaustively validated” it.
This phrase sounded familiar to me, and today I realized where from: Bad blood, John Carreyrou’s book on Theranos. In the book, Carreyrou wrote that the documents Theranos gave to Walgreens “indicated that the Theranos system had been” extensively validated over the past seven years by 10 of the 15 largest pharmaceutical companies. “
GSK and Celgene’s purchaser, Bristol-Myers Squibb, are certainly among the largest pharmaceutical companies. They had contracts with Theranos; in fact, Celgene was Theranos’ largest pharmaceutical customer. But neither of the studies from these two companies was considered a full validation, according to Sung and Gangakhedkar.
I imagine we’ll be working with Theranos’ other pharmaceutical partners later in the trial; Sung’s testimony was brief. She was only on the stand because former lab director Adam Rosendorff had a 2 p.m. babysitting appointment and couldn’t continue his cross-examination, which took up most of the day.
Rosendorff had previously said Theranos’ tests were bad, even claiming he did not understand the clinical value of a test.
Lance Wade, Holmes’ attorney, set out to undermine this testimony, and it was the source of much bickering. Rosendorff could be picky about details; for example, Wade kept mixing “skill tests” with “accuracy tests”, and Rosendorff kept correcting him. At one point, the two got into a fight over whether Rosendorff forwarded or responded to an email. At least I think that’s what they were arguing about.
We revisited the lab inspection by the California Department of Public Health, where Theranos employees were instructed not to enter or leave the “Normandy†lab, where the Edison machines were kept. In a previous inspection in New York City, the notice boards had been covered with paper so the inspector could not see what was on them. Wade asked if it was to protect trade secrets. Rosendorff asked who would pin trade secrets on the bulletin boards.
But we discovered the results of the audit: some minor flaws, which upset Holmes and Balwani, Rosendorff testified. Wade later joked that overseeing quality control testing and making sure the laws were followed was “why are you getting a lot of money, right?” “
“Not as much money as you get paid,†Rosendorff replied.
While he was one of Theranos’ highest paid employees, earning $ 240,000 a year, The the Wall Street newspaper noted that Wade’s business partners earned an average of about $ 1.5 million per year. Given the problems at Theranos, as well as attorneys’ fees that stemmed from his time there, he should have been paid more, Rosendorff said. This piece of testimony was struck from the record.
Quarrels aside, Wade has made progress. He put some of the emails Rosendorff had been asked about a direct review in chronological order with the documents Rosendorff had signed, showing that Rosendorff’s reservations had not prevented him from approving the tests.
Importantly, Wade asked Rosendorff to revise his testimony on aptitude tests, which is required by law. Although aptitude testing was not performed on Edison devices, Rosendorff said, it had been run on FDA approved machines in the lab. Wade produced documents from the American Proficiency Institute which rated Theranos “acceptable.”
This is a significant narrowing of Rosendorff’s testimony from the examination-in-chief. Unlike Wade’s attempted ’embarrassment’ moment yesterday, this made make me reconsider what I thought of Rosendorff’s direct testimony on aptitude tests. It is much less damning to say that aptitude tests have been carried out everywhere except the Edison, which was only used for seven tests. Rosendorff was testifying to proficiency testing plans on Edison machines when he had to leave for the day. (This is when the email dispute arose.)
The remarks made by the lawyer after the jury left suggest that we have at least one more day to listen to Rosendorff and Wade’s feud, which I’m not particularly looking forward to. But Sung’s testimony made give me something that excites me: what is the rest of Big Pharma going to say about Theranos?
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