Theranos boss Elizabeth Holmes admitted in court this week she personally added Pfizer and Schering-Plough logos to her startup’s presentations while trying to seal a deal with Walgreens.
Giving testimony on Tuesday during her fraud trial, the one-time chief exec damningly revealed it was her idea to place the pair of Big Pharma logos on Theranos reports and then send them to Walgreens executives.
Holmes is battling charges she defrauded, and conspired to defraud, investors out of hundreds of millions of dollars by grossly exaggerating the abilities of her company’s technology.
Here’s the lead up to this admission: Pfizer and Schering-Plough produced due-diligence reports on Theranos for the now-imploded startup. Theranos staff took those documents and then created their own lab reports boasting about the supposed efficacy of their blood-testing machines. These files, adorned with Pfizer and Schering-Plough logos seemingly to give them credibility, were then shared with investors and the top-brass at US drugstore chain Walgreens.
But staff at Pfizer and Schering-Plough testified Theranos had no right to use the logos, and they weren’t even aware the logos were being used in this way. It’s also said the two pharmaceutical giants disagreed with the final reports Theranos produced, and distanced themselves from the upstart.
Now Holmes has told a jury she added the logos due to her company’s earlier relationship with Pfizer and Schering-Plough, and claimed she did not do this to trick anyone into thinking the pair had endorsed the lab reports.
“This work was done in partnership with those companies and I was trying to convey that,” she said, NBC reported, adding: “I wish I had done it differently.”
Holmes said the document augmentation took place to win a contract to provide blood testing services at Walgreens. She also admitted those blood tests weren’t actually done with Theranos hardware but with modified commercially available testing equipment.
Holmes said a high demand for testing forced her company to move from in-store testing to a centralized laboratory facility where the third-party systems were installed. She said the commercial blood testers had been modified and optimized by Theranos to use less blood for testing and she couldn’t tell that to her investors because it was a trade secret.
Holmes said she was concerned that if the manufacturers of the equipment knew how Theranos had altered their devices they could have reverse engineered the technology and sold it themselves. She insisted she had not misled investors and her business partners by withholding the truth about Theranos’s testing regime, that it was using off-the-shelf equipment rather than its own machinery.
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Her defense brought up an email exchange between Holmes and Theranos’s then chief scientist Ian Gibbons discussing the progress on the startup’s own blood-testing hardware. “Our immunoassays match the best that can be done in clinical labs and work with small blood samples. Generally our assays are faster by a factor of three to 10 than kits,” Gibbons wrote.
Holmes testified she took this to mean her products could actually work as advertised. But, as has been previously claimed, Theranos hardware was wildly inaccurate, being wrong more than 51 per cent of the time. The full picture may never be known as the company’s test result database was mysteriously lost in 2018.
Holmes, who denies any wrongdoing, faces two counts of conspiracy to commit wire fraud and nine counts of wire fraud. Her trial continues. ®