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Elizabeth Holmes knew machines weren’t working, says ex-lab director

Elizabeth Holmes (founder of Theranos Inc.), arrives in San Jose on Wednesday, September 22, 2021.

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SAN JOSE (CALIF.) — On Friday, a former director of Theranos’ lab acknowledged that he was able to discuss his concerns with Elizabeth Holmes, former CEO of Theranos.

Adam Rosendorff began his career at Theranos when he was appointed lab director. According to Rosendorff, he believed that the health-tech start-up would surpass Apple. Rosendorff left the company a year later because he was uncomfortable with the high rate of failures in the blood-testing software.

Rosendorff was the most important witness for the government. Holmes claimed that he knew Holmes was not using the laboratory machines as advertised, but continued with the launch. He told jurors that he had “become frustrated by my inability to understand discrepant outcomes” after he quit.

Holmes was facing 12 wire fraud and conspiracy charges. This is his fourth week in trial. The prosecution alleges that Holmes and Balwani conspired to defraud patients and investors for a decade. Holmes and Balwani pleaded guilty. Balwani is going to be tried individually next year.

Lance Wade, a defense attorney for Holmes has been cross-examining Rosendorff three days to see if there are any holes in Rosendorff’s account of the events during his tenure as laboratory director. Wade provided several examples of emails from doctors complaining about incorrect test results received by their patients. Rosendorff did not respond to these complaints.

Theranos received an email in October 2014 from a physician complaining about the results of a test he had performed. Rosendorff was contacted by the physician.

Rosendorff responded that he would contact you. Wade pointed out, however that Rosendorff didn’t return the doctor’s call for a week.

“Everyone makes mistakes,” Wade said.

“Sure,” Rosendorff replied.

Wade also provided internal emails between Rosendorff’s top executives Ramesh Balwani and Holmes. These showed that Holmes was addressing Rosendorff’s concerns.

Balwani wrote an email in October 2014 to address the physician, who inquired about incorrect test results. Balwani wrote Rosendorff, Holmes that “despite our best efforts, there are results that will surprise.”

“No lab can be perfect,” Wade said. Wade was curious.

“Yes,” replied Rosendorff.

Wade stated that “every lab makes mistakes”.

Wade also referred to the May 2014 meeting Rosendorff held with Holmes regarding the wide array of hCG test results. Rosendorff explained that “She seemed quite calm about it all, and she didn’t seem like to share my level alarm.”

Wade brought up an email Holmes had sent Balwani concerning the suspicious hCG results. “How could that have happened?” Holmes asked.

According to testimony from earlier witnesses, Rosendorff was John Carreyrou’s primary source. Carreyrou exposed major inaccuracies at Theranos, and broke the scandal.

Carreyrou was not exempted from the trial by his attorney in a Friday court filing. Carreyrou is on Holmes’ witness lists, but has not been summoned. It is common for witnesses to be barred from hearing from others in the case.

Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.