After a long day of arguing, Victoria Sung appeared like a manna from heaven – to tell us Theranos’ tests sucked.
Sung was working at Celgene when it signed with Theranos. Her statement was short and to the point: Celgene had not “fully validated” Theranos technology, she said. That would have taken more work than what she did with Theranos’ tests. The 2012 work she presented to the court showed that Theranos performed poorly when compared to standard tests – often they gave results that were “out of range”.
We’ll get to the bickering in a minute, I promise, but Sung is a teaser for a large part of US versus Elizabeth Holmes We haven’t explored much: Theranos’ relationship with pharmaceutical companies. One accusation that prosecutor Robert Leach made in his opening speech was that Holmes had deceived Walgreens about his relationship with pharmaceutical companies. During the testimony of former employee Surekha Gangakhedkar a little over a week ago, she said that she disagreed that the pharmaceutical company GlaxoSmithKline’s report on Theranos technology had been “fully validated”.
This sentence sounded familiar to me and today I realized where it came from: Bad blood, John Carreyrous book on Theranos. In the book, Carreyrou wrote that documents provided by Theranos Walgreens “state that the Theranos system has been extensively validated by 10 of the 15 largest pharmaceutical companies over the past seven years”.
GSK and the acquirer of Celgene, Bristol-Myers Squibb, are certainly among the largest pharmaceutical companies. They had contracts with Theranos; In fact, Celgene was Theranos’ largest pharma customer. However, according to Sung and Gangakhedkar, none of these two companies’ studies counted as comprehensive validation.
I can imagine that we will work with other Theranos pharmaceutical partners later in the study; Sung’s statement was brief. She was only on the witness stand because the former laboratory manager Adam Rosendorff had a childcare obligation at 2 p.m. and could not continue his cross-examination, which lasted most of the day.
Rosendorff had previously testified that Theranos’ tests were bad and even said he did not understand the clinical value of a test.
Lance Wade, Holmes’ attorney, set out to undermine this statement and that has been the source of much quarrel. Rosendorff could be picky about details; For example, Wade kept confusing “aptitude tests” with “precision tests”, and Rosendorff corrected him again and again. At some point the two got into an argument about whether Rosendorff had forwarded an email or replied to it. At least I guess what they argued about.
We visited the California Department of Health’s Laboratory Inspection, where Theranos employees were instructed not to enter or leave the “Normandy” laboratory where the Edison machines were kept. During an earlier inspection in New York, notice boards had been covered with paper so that the inspector could not see what was on them. Wade asked if this was to protect trade secrets. Rosendorff asked who would post trade secrets on notice boards.
But we saw the results of the audit: some minor flaws that annoyed Holmes and Balwani, Rosendorff testified. Wade later quipped that overseeing quality control tests and ensuring compliance was “why you make the big bucks, right?”
“Not as much money as you pay for it,” answered Rosendorff.
While he was one of the highest paid employees at Theranos, making $ 240,000 a year, the Wall Street Journal found that Wade’s partners made an average of about $ 1.5 million a year. Given the problems at Theranos as well as the legal fees that arose from his time there, he should have been paid more, said Rosendorff. This statement was deleted from the file.
Bickering aside, Wade made some progress. He put some of the emails Rosendorff had been asked about under direct scrutiny in chronological order with documents Rosendorff had signed showing that Rosendorff’s reservations did not prevent him from approving tests.
The decisive factor is that Wade got Rosendorff to revise his statement about the legally required aptitude test. Although proficiency tests were not conducted on the Edison devices, Rosendorff said it was would have was carried out on FDA-approved machines in the laboratory. Wade submitted documents from the American Proficiency Institute that rated Theranos as “acceptable”.
This is a significant narrowing of Rosendorff’s statement from the direct interrogation. Unlike Wade’s attempted “gotcha” moment yesterday, this is it did let me think again about what I thought of Rosendorff’s direct statement on proficiency testing. Far less devastating to say that round robin tests have been carried out everywhere except the Edison, which was only used for seven tests. Rosendorff testified to plans for round robin tests on the Edison machines when he had to leave for the day. (At that time there was an email dispute.)
Remarks from the attorneys after the jury left suggested that we have at least one more day to hear the argument between Rosendorff and Wade, which I’m not particularly looking forward to. But Sung’s statement did Give me something to be excited about: what will the rest of Big Pharma say about Theranos?