Brian Grossman described PFM's extensive but constrained Theranos diligence, its reliance on company forecasts and Holmes's statements, and assumptions about rare venous draws and proprietary analyzers. Erin Tompkins testified about a reactive Theranos HIV screen, later negative testing, and her unsuccessful effort to obtain an explanation; argument over the permissible scope of cross-examination remained unresolved at adjournment.
Full day summary
Defense counsel continued Brian Grossman's cross-examination about PFM's Theranos diligence, internal risk assessments, financial models, and communications with prospective investors. Grossman acknowledged concerns involving regulation, assay data, venous draws, execution, and patient experience, but said PFM lacked complete Theranos data and was restricted in sharing company-specific information with some outside experts. He testified that PFM assumed venous samples would still be processed on Theranos proprietary analyzers and that its projections relied heavily, though not exactly, on Theranos assumptions for 2014 and 2015. The projections included $249 million in 2014 revenue, $1.558 billion in 2015 revenue, and a $20.3 billion discounted-cash-flow value for the U.S. opportunity.
On redirect, Grossman said Theranos had described venous draws as roughly 1 to 2 percent of tests early in the rollout, with plans to reduce that share, rather than anything near 40 percent. He testified that PFM's detailed review of the company model found no assumptions involving third-party or Siemens machines and reaffirmed that PFM relied on statements Holmes made during their introductory meeting. He also distinguished the core hub-and-spoke model underlying PFM's investment from later direct placement of devices in retail locations.
Erin Tompkins testified that she chose Theranos partly because she expected conventional test information from a tiny fingerstick sample and because its service cost less, while regarding accuracy as most important. Her admitted 2015 report listed a reactive combined HIV antibody screen alongside nonreactive or undetected component results and a note stating there was no laboratory evidence of HIV-1 infection. She said she had never been diagnosed with, treated for, or experienced symptoms of HIV or AIDS, and that a screening within three months was negative. Tompkins described unsuccessfully seeking an explanation from Theranos laboratory personnel and identified a 2021 test reporting no detected HIV antigen or antibody. Cross-examination ended for the afternoon after an objection to testimony about what her physician told her; outside the jury's presence, the court indicated that a narrowed inquiry might be permitted but that Tompkins could not supply scientific interpretation beyond her expertise.