Elizabeth Holmes, founder of Theranos Inc., appeared in federal court on Wednesday, September 22, 2021 in San Jose, California, USA.
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San Jose, Calif. – A former lab director in Theranos admitted Friday that he had plenty of opportunities to address his concerns about the company’s technology with former CEO Elizabeth Holmes.
Adam Rosendorf joined Theranos in 2013 as Lab Director. He testified that he felt that the next Apple would start healthcare. A year later, Rosendorf resigned after being uncomfortable and concerned about the high failure rate of the company’s blood-testing technology.
Rosendorf has yet to emerge as the most critical witness to the government. He said Holmes knew that the lab machines were not working as advertised but that the launch had moved forward. After Friday’s interrogation, he told the jury that he was “disappointed at my inability to explain inconsistent results” when he resigned.
It was the fourth week of the trial of Holmes, who is fighting 12 counts of wire fraud and conspiracy. Prosecutors allege that Holmes and Balwani have been involved in multi-million dollar schemes for decades to defraud investors and patients. Holmes and Balwani pleaded not guilty. The next year of Balwani will be tried separately.
Lance Wade, a defense lawyer at Holmes, spent three days examining Rosendorf while trying to dig holes in the reconstruction of the event while he was the lab director. Wade quoted several emails from physicians who complained about their patients receiving incorrect test results, and Rosandorf was slow to respond.
In an October 2011 email, Theranos, a doctor, complained to Customer Service about his patient, who received the test results. The doctor asked to speak to Rosendorf.
Rosendorf replied that he would call. But Wade mentioned that a week had passed and Rosendorf had forgotten to return the doctor’s call.
“Everyone makes mistakes,” Wade said.
“Of course,” Rosendorf replied.
Wade also presented internal emails between Rosendorf, Holmes and his top executive, Ramesh “Sunny” Balwani, which showed that executives were addressing his concerns.
Balwani wrote a lengthy email in October 2014 addressed to the physician who was asking about the incorrect results of his patient’s test. “Despite all our efforts, the results will be unexpected,” Balwani wrote to Rosendorf and Holmes.
“No lab is perfect, is it?” Wade asked.
“Yes,” Rosendorf replied.
“Every lab makes some mistakes,” Wade said.
Wade also hinted at a May 2014 meeting with Rosendorf Holmes about the wide range of HCG results obtained from the test. “He seemed pretty calm about the whole thing, he didn’t seem to share my level of apprehension,” Rosendorf said.
However Wade pointed out in an email that Holmes sent Balwani about the results of the questionable HCG test. “How did it happen?” Holmes asked.
According to pre-trial evidence, Rosandorf was a primary source for John Carrero, a former reporter for the Wall Street Journal. Carrero broke the Theranos scandal, revealing big accuracy issues with the company in 2015.
In a lawsuit filed in a court on Friday, Carrero’s attorney argued that he should not be excluded from participating in the trial. Carriero appeared on Holmes’ witness list but was not summoned. Witnesses are generally barred from hearing the testimony of other witnesses in the case.