Elizabeth A. Holmes — Direct (Continued)
2,109 linesDIRECT EXAMINATION (RESUMED) BY MR. DOWNEY:
MR. DOWNEY: GOOD MORNING, MS. HOLMES.
ELIZABETH A. HOLMES: GOOD MORNING.
MR. DOWNEY: DO YOU RECALL LAST WEEK DURING YOUR TESTIMONY WE WERE TALKING ABOUT SOME OF THE INDIVIDUALS FROM WALGREENS WITH WHOM YOU INTERACTED ON BEHALF OF THERANOS?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND ONE OF THOSE INDIVIDUALS WAS DR. JAY ROSAN?
MR. DOWNEY: AND DID YOU STAY IN TOUCH WITH DR. ROSAN THROUGHOUT THE PERIOD WHEN THERANOS AND WALGREENS WERE WORKING IN PARTNERSHIP?
MR. DOWNEY: I'D LIKE TO ASK YOU TO LOOK AT AN EXHIBIT THAT IS MARKED 7469, AND I'VE PLACED NEAR YOU A VOLUME OF EXHIBITS THAT'S MARKED 4, WHICH IS A THINNER BINDER THAN THE BINDER THAT YOU WERE LOOKING AT LAST WEEK, AND THE DOCUMENT SHOULD BE IN THAT BINDER.
ELIZABETH A. HOLMES: GREAT. GOT IT.
MR. DOWNEY: AND IS THIS AN EMAIL THAT DR. ROSAN SENT TO YOU IN 2014 RELATED TO WALGREENS, THERANOS SERVICE CENTERS AT WALGREENS?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 7469.
MR. LEACH: YOUR HONOR, I DON'T HAVE THIS IN MY BINDER.
JUDGE DAVILA: OH. IT'S IN VOLUME 4.
MR. LEACH: I'VE NOT BEEN PROVIDED WITH VOLUME 4.
JUDGE DAVILA: OH. THAT WILL BE CORRECTED.
MR. DOWNEY: I'M TERRIBLY SORRY.
JUDGE DAVILA: YES, THAT WILL BE CORRECTED.
(PAUSE IN PROCEEDINGS.)
MR. LEACH: HEARSAY, YOUR HONOR.
JUDGE DAVILA: IS THIS CC'D TO MS. HOLMES?
MR. DOWNEY: SHE'S AN ADDRESSEE ON THE TO LINE.
JUDGE DAVILA: YES, I SEE THAT. ALL RIGHT. I'LL OVERRULE THE OBJECTION. IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7469 WAS RECEIVED IN EVIDENCE.)
MR. DOWNEY: CAN WE DISPLAY 7469.
MR. DOWNEY: DO YOU SEE AT THE TOP THIS IS THE FORWARDING OF AN EMAIL FROM DR. ROSAN TO YOU AND MR. BALWANI IN AUGUST OF 2014?
MR. DOWNEY: AND IF YOU LOOK AT THE BOTTOM EMAIL, DO YOU SEE THAT HE HAS FORWARDED A REPORT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IF YOU LOOK AT THE FIRST LINE OF THE EMAIL THAT'S BEEN FORWARDED, DO YOU SEE WHERE IT SAYS, "DR. J, WANTED TO LET YOU KNOW I DID SOME RECENT BLOOD WORK AT THERANOS AND I'M A BELIEVER."
MR. DOWNEY: AND THEN IN THE LAST SENTENCE OF THAT PARAGRAPH, SHE GOES ON TO SAY, "I TOLD MY DOCTOR I REFUSE TO GO TO QUEST AND SHE HAS TO ACCEPT THESE RESULTS FROM THERANOS. WE'LL BE PROMOTING THERANOS WHENEVER WE CAN." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: NOW, THIS BOTTOM EMAIL IS FROM LISA MAKI, M-A-K-I?
MR. DOWNEY: IS THAT SOMEONE THAT YOU KNEW?
MR. DOWNEY: LET'S LOOK AT DR. ROSAN'S EMAIL ON TOP. DO YOU SEE THAT HE SAYS, "THOUGHT YOU MIGHT WANT TO READ THIS TESTIMONIAL FROM A CEO THAT WE RESPECT"?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: IS -- DID YOU GET FEEDBACK FROM DR. ROSAN DURING THE COURSE OF THE WALGREENS PARTNERSHIP AS TO OTHER POSITIVE EXPERIENCES THAT PATIENTS WERE HAVING AT THERANOS SERVICE CENTERS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: OKAY. NOW, I BELIEVE A NUMBER OF TIMES DURING YOUR TESTIMONY TO DATE YOU'VE TALKED ABOUT THE CONCEPT OF ACCESS FOR PATIENTS. I WANT TO ASK YOU WHAT THAT MEANS. WHAT WAS THERANOS TRYING TO DO BY PROVIDING GREATER ACCESS?
ELIZABETH A. HOLMES: IT MEANS THAT PEOPLE HAVE A FUNDAMENTAL RIGHT TO THEIR OWN HEALTH INFORMATION AND MAKING IT EASIER FOR PEOPLE TO GET THAT INFORMATION THROUGH CONVENIENCE OF LOCATIONS, THROUGH SMALLER SAMPLES, THROUGH COST, THROUGH OWNERSHIP OF THEIR DATA, HAD THE POTENTIAL TO CHANGE THE WAY THAT PEOPLE ENGAGED WITH THEIR OWN HEALTH INFORMATION.
MR. DOWNEY: AND WAS ONE OF THE POPULATIONS TO WHOM -- WELL, WHAT ARE SOME OF THE POPULATIONS TO WHOM THERANOS WANTED TO INCREASE ACCESS?
ELIZABETH A. HOLMES: WE WANTED TO HELP PEOPLE WHO WERE SCARED OF NEEDLES. THAT INCLUDED CHILDREN, IT INCLUDED ELDERLY PERSONS OR CANCER PATIENTS WHO HAD A REALLY DIFFICULT TIME GETTING BLOOD TESTS AND WOULD OFTEN BE REALLY BRUISED FROM HAVING TO DO REPEATED BLOOD TESTS. SOMETIMES YOU SEE THAT WITH WOMEN WHO UNDERGO FERTILITY TREATMENT WHO ARE GETTING BLOOD DRAWN ALL OF THE TIME AND THEY HAVE TO WEAR LONG SLEEVES SO THAT THEY CAN COVER UP THE BRUISES.
MR. DOWNEY: AND DID YOU GET REPORTS DURING THE COURSE OF THE WALGREENS/THERANOS PARTNERSHIP THAT THERANOS WAS HAVING SUCCESS IN EXPANDING THAT KIND OF ACCESS?
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 7514, WHICH IS ALSO IN VOLUME 4.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: WHO IS ELENA SCHEER?
ELIZABETH A. HOLMES: ELENA SCHEER WORKED IN CUSTOMER SERVICE FOR THERANOS.
MR. DOWNEY: AND IS 7514 AN EMAIL THAT SHE SENT YOU ABOUT SOME FEEDBACK ON SOMETHING THAT HAD HAPPENED IN CONNECTION WITH A THERANOS SERVICE CENTER?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 7514.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 7514 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND I JUST WANT TO ASK YOU, WITHOUT GOING THROUGH THIS EMAIL, IS THIS A REPORT THAT YOU RECEIVED ON A PATIENT WHO GOT GREATER ACCESS AS A RESULT OF THE FINGERSTICK METHOD OR THE SMALL SAMPLE METHOD THERANOS WAS USING?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND DID YOU OCCASIONALLY OR ON OCCASION GET REPORTS OF THIS KIND DURING THE TIME THAT YOU WERE THE CEO OF THERANOS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: DID YOU ALSO GET REPORTS DURING THAT PERIOD THAT PATIENTS GOING TO THERANOS SERVICE CENTERS IN WALGREENS WERE FINDING THAT THE TEST RESULTS THAT THEY GOT WERE MORE ACCURATE THAN THE TEST RESULTS THAT WERE PROVIDED BY SOME OTHER CLINICAL BLOOD TESTING SERVICES?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 7623. THAT SHOULD ALSO BE IN THAT SAME VOLUME.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: I WANT TO ASK YOU TO LOOK JUST AT THE BOTTOM EMAIL, AND MY QUESTION FOR YOU WITH REGARD TO THIS DOCUMENT IS SIMPLY WHETHER THE ANECDOTE RECOUNTED IN THIS EMAIL IS SOMETHING THAT YOU BECAME FAMILIAR WITH DURING THE COURSE OF YOUR TIME AS THE CEO AT THERANOS?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND HOW DID YOU COME TO LEARN THIS ANECDOTE?
ELIZABETH A. HOLMES: I WAS TOLD ABOUT THIS BY OUR FIELD REPRESENTATIVES AND PEOPLE WHO WERE GATHERING FEEDBACK FROM PEOPLE IN THE FIELD, RYAN KARPEL ON THIS EMAIL.
MR. DOWNEY: OKAY. AND DID YOU RECEIVE, RECALL RECEIVING AT LEAST ONE REPORT WHERE A THERANOS TEST HAD DETECTED A CONDITION WITH REGARD TO A PATIENT THAT HAD BEEN MISSED BY BLOOD TESTS OFFERED BY OTHER BLOOD TESTING SERVICES?
MR. DOWNEY: AND TELL US WHAT YOU RECALL LEARNING IN THAT INSTANCE.
ELIZABETH A. HOLMES: IN THIS SPECIFIC INSTANCE?
MR. DOWNEY: YES.
ELIZABETH A. HOLMES: THIS IS A PATIENT WHO HAD BEEN CHRONICALLY DOING THYROID TESTING AND HAD NOT DISCOVERED AN ISSUE WITH I THINK IT WAS HER PITUITARY GLAND, AND UPON GETTING A SERIES OF LAB DATA BACK FROM THERANOS AND LOOKING AT THE WAY THAT WE PRESENT THAT DATA IN THE APP THAT SHE HAD ACCESS TO, SHE AND HER PHYSICIAN WERE ABLE TO DISCOVER A MEDICAL ISSUE THAT SHE HAD NOT SEEN BEFORE AND SHE WAS REALLY EXCITED ABOUT THE SERVICE BASED ON THOSE RESULTS.
MR. DOWNEY: OKAY. AND WAS THIS THE ONLY INCIDENT OF THIS KIND THAT YOU RECALL?
MR. DOWNEY: DO YOU RECALL OTHER INCIDENTS WHERE PATIENTS REPORTED DETECTED CONDITIONS THAT OTHER BLOOD TESTING SERVICES HAD BEEN UNABLE TO DETECT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 7623.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 7623 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: DO YOU SEE THIS IS AN EMAIL THAT RECOUNTS WHAT OCCURRED WITH REGARD TO THE PARTICULAR PATIENT THAT WE HAVE BEEN DISCUSSING?
MR. DOWNEY: AND DO YOU SEE THAT ABOUT FIVE LINES DOWN INTO THE THIRD PARAGRAPH THE REPORT IS THAT SHE, REFERRING TO THE PATIENT, "HAS BEEN FRUSTRATED WITH HAVING SYMPTOMS WITH NO RESOLUTION OR DIAGNOSIS AS TO WHAT THE ROOT CAUSE WAS." DO YOU SEE THAT?
ELIZABETH A. HOLMES: YES, I DO.
MR. DOWNEY: AND SHE TOOK THE INFORMATION THAT SHE HAD GATHERED FROM HER THERANOS RESULT AND ENCOURAGED HER PRIMARY CARE DOCTOR TO ORDER AN ULTRASOUND. DO YOU SEE THAT?
MR. DOWNEY: AND DO YOU SEE THAT THE DOCTOR, UPON PERFORMING THE ULTRASOUND, DISCOVERED SHE HAD A TUMOR IN HER PITUITARY GLAND AND TWO MORE IN HER BRAIN?
MR. DOWNEY: AND THEN DO YOU SEE THAT THIS EMAIL GOES ON TO REPORT THAT SHE FELT STRONGLY THAT HAD SHE NOT BEEN ABLE TO GET HER BLOOD TEST RESULTS AND BE PROACTIVE, HER PRIMARY CARE DOCTOR WOULD NOT HAVE ORDERED AN ULTRASOUND?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU SEE THAT SHE, IN THE LAST SENTENCE, REPORTED SHE WOULD NEVER GO TO ANOTHER COMPANY?
MR. DOWNEY: LET ME ASK YOU IN THE ADDRESS OF THIS EMAIL IN THE BEGINNING, WHO IS -- IF YOU WOULD JUST BLOW UP THE ADDRESS BLOCK THERE. WHO IS BRANDI LUZANIA?
ELIZABETH A. HOLMES: BRANDI WAS ONE OF OUR CERTIFIED PHLEBOTOMIST WHO WOULD SERVE PATIENTS IN OUR WELLNESS CENTERS.
MR. DOWNEY: NOW, MS. HOLMES, I JUST WANT TO TURN TO ONE MATTER WITH RESPECT TO AN EXHIBIT THAT HAD BEEN CONDITIONALLY ADMITTED BY YOUR HONOR PREVIOUSLY. YOUR HONOR, WE HAD, THROUGH ANOTHER WITNESS, PROVISIONALLY ADMITTED 13862 AND 13863. SO IF YOU WOULD LOOK AT THOSE, MS. HOLMES.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: DO THESE REFLECT CALENDAR ENTRIES FROM YOUR CALENDAR WHILE YOU WERE THE CEO OF THERANOS?
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 13862 AND 13863.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: THEY'RE ADMITTED. THEY MAY BE PUBLISHED.
(DEFENDANT'S EXHIBITS 13862 AND 13863 WERE RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: DURING THE COURSE OF YOUR TIME AT THERANOS, DID YOU ALSO HAVE OCCASIONS TO REVIEW PORTIONS OF THE WALGREENS WEBSITE THAT DISCUSSED THERANOS'S SERVICES IN WALGREENS STORES?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT 14207, WHICH SHOULD BE IN VOLUME 4 OF WHAT IS WITH YOU.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: DO YOU HAVE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: IS 14207 PART OF THE WALGREENS WEBSITE THAT RAN DURING THE TIME THAT THERANOS SERVICE CENTERS WERE BEING OFFERED IN WALGREENS STORES?
MR. DOWNEY: AND DO YOU SEE THAT THE DATE IN THE UPPER RIGHT-HAND CORNER APPEARS TO BE OCTOBER 9TH, 2014?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 14207.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 14207 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND DID YOU ALSO ON OCCASION REVIEW PORTIONS OF THE THERANOS WEBSITE IN CONNECTION WITH SERVICES AT WALGREENS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: IF YOU WOULD TAKE A MINUTE TO TURN TO THE NEXT EXHIBIT, WHICH IS 14208.
MR. DOWNEY: IS THIS A PORTION OF THE THERANOS WEBSITE THAT RAN DURING THE TIME THAT THERANOS SERVICE CENTERS WERE OPERATING IN WALGREENS STORES?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND DO YOU SEE IN THE UPPER RIGHT-HAND CORNER IT APPEARS TO INDICATE THE DATE IS AUGUST 19TH, 2014?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 14208.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 14208 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: WHEN WE LEFT OFF ON FRIDAY, WE WERE TALKING ABOUT THERANOS'S WORK WITH VARIOUS PARTS OF THE DEPARTMENT OF DEFENSE. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: DURING THE COURSE OF THE TIME YOU WERE AT THERANOS, DID THERANOS WORK WITH THE UNITED STATES CENTRAL COMMAND?
MR. DOWNEY: AND IS THAT SOMETIMES ABBREVIATED AS CENTCOM?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: DID THERANOS ENTER INTO AN AGREEMENT WITH CENTCOM?
ELIZABETH A. HOLMES: WE DID, YES.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT A DOCUMENT THAT IS ALREADY IN EVIDENCE, AND I'LL PUT ON THE SCREEN, WHICH IS EXHIBIT 10457. THAT ALSO SHOULD BE IN VOLUME 3 OF THE MATERIALS. IF YOU WOULD JUST TAKE A MOMENT TO LOOK THROUGH THE DOCUMENTS AND ITS ATTACHMENTS.
ELIZABETH A. HOLMES: VOLUME 3. I'M SORRY, THE NUMBER WAS?
MR. DOWNEY: 104 --
ELIZABETH A. HOLMES: GOT IT -- 57. OKAY.
MR. DOWNEY: AND IF YOU LOOK AT THE -- HAVE YOU HAD A CHANCE TO LOOK THROUGH THAT?
ELIZABETH A. HOLMES: YEAH, BRIEFLY.
MR. DOWNEY: IF YOU LOOK AT THE EMAIL THAT IS THE FIRST PAGE OF THE EXHIBIT, DO YOU SEE THAT THAT'S -- IT'S DATED DECEMBER 3RD, 2012?
MR. DOWNEY: WAS IT AROUND NOVEMBER OR DECEMBER OF 2012 WHEN THERANOS ENTERED INTO AN AGREEMENT WITH CENTCOM?
ELIZABETH A. HOLMES: IT WAS.
MR. DOWNEY: HOW LONG PRIOR TO DECEMBER 2012 HAD THERANOS BEEN TALKING TO CENTCOM ABOUT THE PROSPECT OF ENTER INTO AN AGREEMENT?
ELIZABETH A. HOLMES: ABOUT A YEAR AND A HALF.
MR. DOWNEY: AND WAS THAT THE RESULT OF THE INTRODUCTION THAT GENERAL MATTIS HAD MADE TO CENTCOM?
ELIZABETH A. HOLMES: IT WAS.
MR. DOWNEY: AND WAS THIS AGREEMENT THE CULMINATION OF THOSE DISCUSSIONS OVER THE COURSE OF A YEAR AND A HALF?
MR. DOWNEY: LET ME ASK YOU TO LOOK AT PAGE 3 OF THE DOCUMENT. AND DO YOU SEE THAT THERE'S A TITLE ON THE TOP THAT SAYS "U.S. ARMY MEDICAL RESEARCH AND MATERIEL COMMAND." CAN YOU EXPLAIN WHAT THAT IS AND WHAT IT HAS TO DO WITH CENTCOM?
ELIZABETH A. HOLMES: MY UNDERSTANDING IS THAT THIS IS THE GROUP WITHIN THE MILITARY THAT WAS RESPONSIBLE FOR THE IRB APPROVAL, WHICH IS THE INSTITUTIONAL REVIEW BOARD THAT IS LISTED HERE, WHICH IS ONE OF THE APPROVALS THAT WE NEEDED TO BE ABLE TO DO A STUDY IN WHICH WE WERE TESTING HUMAN SAMPLES.
MR. DOWNEY: OKAY. AND WHEN YOU ULTIMATELY WERE ABLE TO AGREE ON A STUDY, WHAT WAS THE, WHAT WAS THE STUDY THAT WAS TO BE PERFORMED?
ELIZABETH A. HOLMES: THE STUDY THAT WAS TO BE PERFORMED WAS TO SHIP OUR SYSTEMS TO AFGHANISTAN WHERE THEY WOULD BE TESTED AGAINST TRADITIONAL REFERENCE METHODS TO EVALUATE THEIR USE IN SETTINGS IN AFGHANISTAN AND OTHER REMOTE PLACES.
MR. DOWNEY: AND IN THE PERIOD THAT WAS FROM THE MIDDLE OF 2011 UNTIL THE END OF 2012 WHEN YOU WERE DISCUSSING THE POSSIBILITY OF THIS, WHAT WAS HAPPENING DURING THOSE MONTHS PRIOR TO ACTUAL ENTRY OF AN AGREEMENT?
ELIZABETH A. HOLMES: THERE WAS A LOT OF WORK IN FIGURING OUT HOW TO GET THE RIGHT APPROVALS TO DO A STUDY LIKE THIS; UNDERSTANDING THE RELEVANT REGULATORY RESTRICTIONS THAT WE NEEDED TO WORK THROUGH WITH CENTCOM; UNDERSTANDING THE TEST LIST THAT THEY ACTUALLY WANTED US TO DEVELOP FOR THEM, WE HAD A NUMBER OF CHANGES TO THAT OVER TIME; UNDERSTANDING HOW THIS WORK MIGHT BE COMBINED WITH OR OTHERWISE INTERFACE WITH OTHER CONVERSATIONS WE WERE HAVING WITHIN DOD; HOW TO CONTRACT WITH THEM, WHETHER WE NEEDED TO CONTRACT THROUGH A SUBCONTRACTOR. THERE WAS A WHOLE SERIES OF WORK STREAMS THAT HAD TO BE DEALT WITH.
MR. DOWNEY: OKAY. AND IF YOU LOOK AT PAGE 4, THERE'S A SECTION HERE THAT IS LISTED AS STUDY FACILITIES. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND UNDER THAT IT SAYS -- IT ASKS FOR A LIST OF LOCATIONS WHERE STUDY PROCEDURES WILL BE PERFORMED. DO YOU SEE THAT?
MR. DOWNEY: AND THE LOCATION FOR THIS STUDY WAS TO BE THE COMBINED JOINT THEATRE HOSPITAL AT BAGRAM AIR FORCE BASE IN AFGHANISTAN?
MR. DOWNEY: AND AFTER THE EXECUTION -- WELL, LET ME DIRECT YOUR ATTENTION TO ACTUALLY ONE OTHER PORTION OF THE -- OF THIS DOCUMENT. IF WE CAN LOOK AT PAGE 8 OF THE EXHIBIT. DO YOU SEE THE SECTION THERE THAT IS LABELLED 4 AND IT SAYS BACKGROUND AND SIGNIFICANCE?
MR. DOWNEY: AND DID YOU UNDERSTAND THAT THIS WAS A PROVISION IN THE AGREEMENT THAT SUMMARIZED WHY THIS STUDY WAS TO BE PERFORMED BETWEEN THERANOS AND THE DEPARTMENT OF DEFENSE?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND IF YOU LOOK AT THE LAST PARAGRAPH, DO YOU SEE THAT WHERE IT BEGINS "SUGGESTED AREAS OF USE"?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IT LISTS A VARIETY OF PLACES WHERE POTENTIAL USE FOR THE THERANOS DEVICES IS SET FORTH. DO YOU SEE THAT?
MR. DOWNEY: AND THERE'S A LIST OF ROLE III FACILITIES IN ROMAN NUMBERS?
MR. DOWNEY: DO YOU KNOW WHAT THAT REFERS TO?
ELIZABETH A. HOLMES: I THINK THAT IS THE SAME KIND OF BASE AS THE BAGRAM AIR FORCE BASE WHERE MEDICAL CARE IS BEING PROVIDED TO PEOPLE IN FIELD.
MR. DOWNEY: AND THEN DO YOU SEE THAT ANOTHER SUGGESTED AREA IS MEDEVAC PLATFORMS?
MR. DOWNEY: AND DO YOU SEE THEN THAT THERE'S A REFERENCE TO ANOTHER USE BEING IN CONNECTION WITH SOF UNITS? DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU SEE THE REFERENCE TO MORTUARY AFFAIRS AFTER THAT?
MR. DOWNEY: I'M REFERRING TO USE IN CONNECTION -- FOR IDENTIFICATION IN CONNECTION WITH DECEASED PERSONNEL?
MR. DOWNEY: AND THEN DO YOU SEE THAT THE NEXT PARAGRAPH OF THE BACKGROUND SECTION TALKS ABOUT THE POTENTIAL THAT MIGHT BE REALIZED FROM THE THERANOS SYSTEM IF DEPLOYED IN THOSE CIRCUMSTANCES?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: NOW, THIS WAS EXECUTED IN LATE 2012; CORRECT?
MR. DOWNEY: AND YOU MENTIONED THE REGULATORY PROCESSES AND OTHER THINGS THAT TOOK PLACE PRIOR TO THE AGREEMENT BEING SIGNED. WHAT HAPPENED AFTER THE AGREEMENT WAS SIGNED WITH RESPECT TO THIS STUDY?
ELIZABETH A. HOLMES: THEN WE NEEDED TO START THE CUSTOMIZATION WORK FOR DOD. WE INVESTED IN BUILDING A CUSTOM DEVICE THAT COULD MEET THESE GOALS OF BEING ABLE TO BE USED IN VERY REMOTE AREAS OR ULTIMATELY ON MEDEVAC. WE INVESTED IN DEVELOPING THE CHEMISTRIES AND THE TESTS THAT WERE OF VALUE FOR TRIAGE IN THESE SITUATIONS, A WHOLE NEW SOFTWARE SUITE. THERE WAS VIBRATION CONFIGURATIONS THAT NEEDED TO BE DONE FOR THE DEVICE; BIO SAFETY CONFIGURATIONS TO MAKE IT ACT LIKE A BIO PORTAL ALMOST, A HEPA FILTER TYPE SYSTEM THAT WAS BUILT IN, AND ALL OF THE ENGINEERING AND SCIENTIFIC WORK THAT WENT INTO CREATING IT.
MR. DOWNEY: AT ANY TIME DURING THE PROCESS OF ENGAGING WITH CENTCOM, DID PERSONNEL FROM CENTCOM VISIT THERANOS?
MR. DOWNEY: AND DID THEY, DURING THE COURSE OF THAT VISIT, LOOK AT THERANOS TECHNOLOGY?
ELIZABETH A. HOLMES: THEY DID.
MR. DOWNEY: AND DURING THE COURSE OF THE RELATIONSHIP, DID THERANOS SEND DEVICES SO THAT CENTCOM COULD EVALUATE THEIR USEFULNESS IN CONNECTION WITH POTENTIAL DEPLOYMENT?
ELIZABETH A. HOLMES: WE SENT DEVICES ONCE WE HAD BUILT THE SECURITY SOFTWARE AND MADE THE CHANGES TO THE DEVICE FOR THAT TO THEIR AIR FORCE BASE IN FLORIDA.
MR. DOWNEY: OKAY. NOW, DID YOU CONTINUE THROUGHOUT 2013 WORKING ON A DEPLOYMENT IN CONNECTION WITH THE USE OF THE THERANOS DEVICES IN THE CONFLICT IN AFGHANISTAN?
ELIZABETH A. HOLMES: WE DID. WE CONTINUED INVESTING A TREMENDOUS AMOUNT IN IT.
MR. DOWNEY: AND WHEN YOU SAY "INVESTING A TREMENDOUS AMOUNT," WHAT KIND OF DOLLAR FIGURE ARE YOU REFERRING TO?
ELIZABETH A. HOLMES: TENS OF MILLIONS OF DOLLARS.
MR. DOWNEY: AND WHAT IN PARTICULAR WERE YOU WORKING TO DEVELOP AS A RESULT OF THAT INVESTMENT?
ELIZABETH A. HOLMES: THE DEVICE THAT WOULD BE SPECIFIC TO DOD REQUIREMENTS FOR SIZE, FOR PORTABILITY, FOR USE IN REMOTE AREAS, FOR USE ON FLIGHT AND ALL OF THE TESTS THAT WERE MOST MEANINGFUL TO BE ABLE TO BE USED IN THAT SETTING, ALL OF THE SOFTWARE THAT WOULD BE USED BY PEOPLE IN THOSE SETTINGS, AND THEN THE CONFIGURATIONS FOR THOSE ENVIRONMENTS WHICH WERE VERY DIFFERENT THAN A RETAIL STORE.
MR. DOWNEY: AND WERE YOU STILL WORKING ON THAT PROJECT AS OF THE END OF 2013?
ELIZABETH A. HOLMES: WE WERE.
MR. DOWNEY: AND DID YOU CONTINUE TO WORK ON THAT PROJECT UNTIL WELL INTO 2014?
MR. DOWNEY: DID THERANOS EVER HAVE A DEVICE TESTED WITHIN AFGHANISTAN?
MR. DOWNEY: WAS -- WHY NOT?
ELIZABETH A. HOLMES: WE WEREN'T ABLE TO FINISH THE WORK IN TIME BASED ON THE TIMELINES IN THE CONTRACT.
MR. DOWNEY: OKAY. WHAT OTHER ACTIVITIES WAS THERANOS UNDERTAKING IN 2013 AND '14?
ELIZABETH A. HOLMES: WE WERE LAUNCHING OUR SERVICES AT RETAIL.
MR. DOWNEY: WERE YOU DISAPPOINTED THAT THE TESTS NEVER WERE COMPLETED?
ELIZABETH A. HOLMES: VERY MUCH SO, BUT I CONTINUED TO BELIEVE THAT WE WOULD SEE IT THROUGH.
MR. DOWNEY: NOW, LET'S TALK ABOUT ANY RELATIONSHIP BETWEEN THERANOS AND THE UNITED STATES SPECIAL OPERATIONS COMMAND. ARE YOU FAMILIAR WITH THAT?
ELIZABETH A. HOLMES: I AM, YES.
MR. DOWNEY: AND IS THE SPECIAL OPERATIONS COMMAND SOMETIMES ABBREVIATED SOCOM?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND THAT'S SEPARATE FROM CENTCOM?
MR. DOWNEY: AND DID THERANOS DEVELOP A RELATIONSHIP WITH SOCOM?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: WHEN DID THERANOS BEGIN TO TRY TO WORK WITH SOCOM?
ELIZABETH A. HOLMES: IN 2012 AS WELL, I THINK.
MR. DOWNEY: AND DID THERANOS ULTIMATELY ENTER INTO AN AGREEMENT WITH SOCOM AS WELL?
MR. DOWNEY: OKAY. WERE THE TIMELINES FOR THAT PROJECT PUSHED BACK?
MR. DOWNEY: AND WHY WAS THAT?
ELIZABETH A. HOLMES: AGAIN, WE NEEDED THE TIME TO REALLY DEVELOP THIS NEW DEVICE THE RIGHT WAY, AND ALSO ACCOMMODATE A DIFFERENT TEST MENU THAT THEY HAD REQUESTED FOR USE IN THEIR SETTINGS.
MR. DOWNEY: DID THE DEVICE THAT YOU WERE DEVELOPING TO USE IN CONNECTION WITH THESE MILITARY PROGRAMS, DID IT HAVE A NAME?
ELIZABETH A. HOLMES: IT DID.
MR. DOWNEY: AND WHAT WAS ITS NAME?
ELIZABETH A. HOLMES: WE CALLED IT THE 4S DEVICE.
MR. DOWNEY: DID THERANOS EVER DELIVERED A 4S DEVICE TO SOCOM?
MR. DOWNEY: AND WHAT DID THERANOS DELIVER TO SOCOM?
ELIZABETH A. HOLMES: WE SHIPPED I THINK TWO OR MORE 4S DEVICES TO A SOCOM FACILITY.
MR. DOWNEY: HOW MANY PERSONNEL AT THERANOS WERE INVOLVED IN WORKING ON THE DEVELOPMENT OF THIS MILITARY SPECIFIC SET OF DEVICES?
ELIZABETH A. HOLMES: DOZENS OF ENGINEERS AND SCIENTISTS.
MR. DOWNEY: NOW, DO YOU RECALL DURING THE COURSE OF THE CASE THERE'S BEEN TESTIMONY ABOUT STATEMENTS THAT YOU MADE REGARDING THERANOS DEVICES ON MEDEVACS?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: DO YOU RECALL THAT TESTIMONY?
MR. DOWNEY: AND WERE THERANOS DEVICES USED FOR CLINICAL CARE ON MEDEVACS?
MR. DOWNEY: DID YOU TELL ANYONE THAT?
ELIZABETH A. HOLMES: I DON'T THINK I DID.
MR. DOWNEY: DID YOU TALK ABOUT THERANOS AND MEDEVACS AND A PROGRAM AT THERANOS INVOLVING MEDEVACS?
MR. DOWNEY: AND WHAT DO YOU RECALL YOU WERE TRYING TO CONVEY?
ELIZABETH A. HOLMES: I WAS TRYING TO CONVEY THAT WE WERE DOING A LOT OF WORK ON DEVELOPING THIS NEW DEVICE FOR USE ON MEDEVACS AND IN REMOTE AREAS. IT WAS SOMETHING THAT I WAS INCREDIBLY PROUD OF THE WORK THE TEAM WAS DOING AND INCREDIBLY EXCITED ABOUT BECAUSE WE HAD CONTRACTS TO DO THIS AND WERE WORKING WITH ORGANIZATIONS IN THE MILITARY TO BE ABLE TO TEST THE TECHNOLOGY TO ULTIMATELY POTENTIALLY USE IT IN THESE SETTINGS.
MR. DOWNEY: DID YOU TALK IN THOSE CONVERSATIONS ABOUT POTENTIAL APPLICATIONS FOR THERANOS'S DEVICE, HOW IT MIGHT BE USED IF IT WERE CAPABLE OF BEING DEPLOYED?
ELIZABETH A. HOLMES: DEFINITELY.
MR. DOWNEY: AND WAS THAT SOMETHING THAT YOU FREQUENTLY SPOKE ABOUT?
ELIZABETH A. HOLMES: I SPOKE ABOUT IT ON OCCASION. BUT WE ALSO WOULD TALK ABOUT THE FACT THAT WE WERE GENERALLY PRIORITIZING OUR RETAIL INITIATIVES OVER ANYTHING ELSE AT THAT POINT.
MR. DOWNEY: LET ME TURN TO THE SUBJECT OF DEMONSTRATIONS OF THERANOS'S TECHNOLOGY. DO YOU RECALL SOME DISCUSSION OF THAT DURING THE COURSE OF THE CASE?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DID THERANOS PROVIDE DEMONSTRATIONS TO OUTSIDERS OF ITS TECHNOLOGY DURING THE TIME THAT YOU WERE THERE?
MR. DOWNEY: AND WHY DID THERANOS CONDUCT THOSE DEMONSTRATIONS?
ELIZABETH A. HOLMES: WE CONDUCTED DEMONSTRATIONS TO SHOW PEOPLE DIFFERENT ASPECTS OF OUR INVENTIONS AND TECHNOLOGY BASED ON WHAT WE WERE TALKING WITH THEM ABOUT AND WHAT THEY WERE INTERESTED IN.
MR. DOWNEY: AND WHEN DID YOU START CONDUCTING THOSE DEMONSTRATIONS?
ELIZABETH A. HOLMES: PROBABLY AT THE BEGINNING OF THE COMPANY WHEN WE FIRST STARTED.
MR. DOWNEY: AND OVER WHAT PERIOD OF TIME DID YOU CONTINUE TO OFFER DEMONSTRATIONS OF THERANOS'S TECHNOLOGY?
ELIZABETH A. HOLMES: THROUGHOUT THE COMPANY'S LIFETIME.
MR. DOWNEY: HOW MANY DEMONSTRATIONS OF THERANOS'S TECHNOLOGY WERE YOU PERSONALLY INVOLVED IN DURING THE COURSE OF YOUR TIME AT THERANOS?
ELIZABETH A. HOLMES: PROBABLY HUNDREDS.
MR. DOWNEY: NOW, YOU TALKED ABOUT THE APPLICATIONS THAT THE PERSON RECEIVING THE DEMONSTRATION MIGHT BE INTERESTED IN. WHAT DO YOU MEAN BY THAT? WERE DIFFERENT AUDIENCES INTERESTED IN DIFFERENT ASPECTS OF THERANOS'S TECHNOLOGY?
ELIZABETH A. HOLMES: YES, THEY WERE.
MR. DOWNEY: AND DID YOU TRY TO CUSTOMIZE DEVICES, CUSTOMIZE PRESENTATIONS TO ACCOMMODATE THAT?
ELIZABETH A. HOLMES: WE DID. IN SOME CIRCUMSTANCES PEOPLE MIGHT BE INTERESTED IN SEEING THE PROCESS THAT WE WERE PLANNING OR RUNNING AT RETAIL, AND WE WOULD TRY TO REPLICATE OR MIMIC THAT IN OUR BUILDING. IN SOME CASES, LIKE IN THE CASE OF THE MILITARY, THERE WERE QUESTIONS ABOUT HOW YOU COULD TAKE A DEVICE IN FIELD OR TO A REMOTE LOCATION AND WE WOULD FOCUS ON THE DEVICE. IN SOME CASES THERE WERE QUESTIONS ABOUT WHETHER AN UNTRAINED PERSON COULD FIGURE OUT HOW TO USE THE DEVICE, AND WE WOULD FOCUS ON THE TOUCHSCREEN AND HOW TO DO THE COLLECTION PROCESS, FOR EXAMPLE.
MR. DOWNEY: OKAY. NOW, LET'S TALK ABOUT THE LOCATION OF THESE DEMONSTRATIONS THAT YOU DID. DID YOU ALWAYS DO THE DEMONSTRATIONS IN THERANOS'S OFFICE?
MR. DOWNEY: WOULD YOU TAKE THEM OUT ON THE ROAD TO USE IN OTHER PEOPLE'S OFFICES?
MR. DOWNEY: AND DID THAT INCLUDE DEMONSTRATIONS OF THE 3.0 SERIES DEVICE?
ELIZABETH A. HOLMES: IT DID.
MR. DOWNEY: AND WAS THE 3.0 SERIES OF DEVICE THE DEVICE THAT YOU PERSONALLY DEMONSTRATED BETWEEN 2006 AND 2011 OR SO?
MR. DOWNEY: WHEN YOU CONDUCTED THOSE DEVICES AT REMOTE LOCATIONS, DID YOU ALWAYS REPORT THE RESULTS OF THE DEMONSTRATION TO THE PERSON WHO WAS INVOLVED IN RECEIVING IT?
MR. DOWNEY: AND DID YOU HAVE MEETINGS IN CONNECTION WITH VARIOUS PHARMACEUTICAL PARTNERS OVER A PERIOD OF TIME?
ELIZABETH A. HOLMES: WE DID, YES.
MR. DOWNEY: AND DID YOU TAKE THE DEVICE WITH YOU ALSO ON SOME OCCASIONS SIMPLY FOR PEOPLE TO LOOK AT?
MR. DOWNEY: AND THE TYPES OF PEOPLE WHO WERE RECEIVING DEMONSTRATIONS, GIVE US AN IDEA OF WHO YOU MIGHT DEMONSTRATE THE TECHNOLOGY TO.
ELIZABETH A. HOLMES: WE WOULD DEMONSTRATE IT TO HOSPITAL SYSTEMS OR HEALTH SYSTEMS THAT WE WERE MEETING WITH; TO PEOPLE WHO MIGHT BECOME ADVISORS TO THERANOS; TO PARTNERS OR POTENTIAL PARTNERS; TO INVESTORS OR POTENTIAL INVESTORS; TO PEOPLE WHO WE WANTED TO GET INVOLVED WITH WORKING WITH THE COMPANY IN SOME WAY OR WERE OTHERWISE INTERESTED IN WORKING WITH.
MR. DOWNEY: AND YOU BROUGHT A DEVICE TO YOUR MEETING WITH JOHNS HOPKINS DURING THE WALGREENS DUE DILIGENCE PROCESS?
MR. DOWNEY: AND DID YOU BRING A DEVICE TO UCSF IN CONNECTION WITH THE SAFEWAY DILIGENCE PROCESS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: IN ADDITION TO CONDUCTING DEMONSTRATIONS, DID THERANOS SOMETIMES GIVE ITS TECHNOLOGY TO VARIOUS PEOPLE FOR THEM TO RETAIN AND EXAMINE?
MR. DOWNEY: DO YOU RECALL WHETHER ONE OF THOSE INSTITUTIONS WAS WALGREENS?
ELIZABETH A. HOLMES: IT WAS.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 7129.
ELIZABETH A. HOLMES: IS THIS 3 OR?
MR. DOWNEY: VOLUME 4.
ELIZABETH A. HOLMES: VOLUME 4. OKAY.
MR. DOWNEY: WAS RENAAT VANDENHOOFF AN EXECUTIVE AT WALGREENS WITH WHOM YOU DEALT?
MR. DOWNEY: IS THIS AN EMAIL ABOUT THE AGREEMENT BETWEEN WALGREENS AND THERANOS FROM 2010?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 7129.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7129 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND DO YOU SEE IN THE FIRST TWO SENTENCES MR. VANDENHOOFF ASKS MR. BALWANI AND YOURSELF IF WALGREENS COULD HAVE A FEW DEVICES FOR DEMOS THE WEEK BEFORE SO WE CAN DO A FEW TESTS. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WAS THIS IN CONNECTION WITH SOMETHING THAT WALGREENS WAS DOING WITHOUT THERANOS, IF YOU KNOW?
MR. DOWNEY: AND IF YOU LOOK AT THE SECOND SENTENCE, MR. VANDENHOOFF SAYS, "I ASSUME WE WON'T HAVE THE MULTI-BAY DEVICES YET SO WE WILL STILL BE LIMITED HOW MANY WE CAN DO AT ONE TIME." DO YOU SEE THAT?
MR. DOWNEY: AND WHAT DEVICES DID YOU SEND TO WALGREENS IN RESPONSE TO THIS REQUEST?
ELIZABETH A. HOLMES: WE SENT 3 SERIES DEVICES.
MR. DOWNEY: WHY DID YOU SEND 3 SERIES DEVICES AT THIS TIME?
ELIZABETH A. HOLMES: BECAUSE THOSE WERE THE DEVICES THAT WE HAD BEEN USING IN OUR PROGRAMS WITH PHARMACEUTICAL COMPANIES AND OTHERS.
MR. DOWNEY: OKAY. WHEN YOU SEE -- WHEN MR. VANDENHOOFF SAYS HE ASSUMES THAT YOU WON'T HAVE THE MULTI-BAY DEVICES, IS THAT SOMETHING THAT YOU HAD COMMUNICATED WITH INDIVIDUALS AT WALGREENS?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: NOW, I WANT TO FOCUS ON THE PERIOD BETWEEN 2011 AND 2016 AND THE DEMONSTRATIONS THAT YOU AND OTHERS AT THERANOS CONDUCTED DURING THAT PERIOD. WHO WAS INVOLVED IN PREPARING AND CONDUCTING DEMONSTRATIONS AT THERANOS?
ELIZABETH A. HOLMES: OUR SCIENTISTS AND ENGINEERS FROM THE VARIOUS TECHNICAL TEAMS, AND OUR PROJECT AND PRODUCT MANAGERS.
MR. DOWNEY: DID THAT INCLUDE MR. EDLIN?
ELIZABETH A. HOLMES: IT DID.
MR. DOWNEY: AND WAS DR. YOUNG INVOLVED AS WELL?
ELIZABETH A. HOLMES: HE WAS.
MR. DOWNEY: WHO ROLE DID HE PLAY?
ELIZABETH A. HOLMES: DR. YOUNG OVERSAW THE DEMO PROCESS AND THE REVIEW OF RESULTS BEFORE THEY WERE RELEASED.
MR. DOWNEY: OKAY. NOW, WERE YOU AT EVERY DEMONSTRATION THAT THERANOS CONDUCTED?
MR. DOWNEY: WERE YOU AT MANY OF THEM?
ELIZABETH A. HOLMES: I WAS.
MR. DOWNEY: AND WERE THE DEMONSTRATIONS CONDUCTED ACCORDING TO AN IDENTICAL PROCESS?
MR. DOWNEY: HOW DID THEY VARY?
ELIZABETH A. HOLMES: THEY VARIED BASED ON THE DISCUSSION WE WERE HAVING AND THE PURPOSE OF THE DEMONSTRATION, WHAT SOMEONE WANTED TO SEE. SO WE WOULD CUSTOMIZE THAT BASED ON GENERALLY THEIR REQUESTS.
MR. DOWNEY: WELL, IN SOME INSTANCES WOULD PEOPLE SAY, I'D LIKE TO HAVE MY BLOOD DRAWN AND HAVE IT READ?
ELIZABETH A. HOLMES: EXACTLY.
MR. DOWNEY: WERE THERE OTHER INSTANCES WHEN PEOPLE WEREN'T INTERESTED IN DOING THAT?
ELIZABETH A. HOLMES: YES, THERE WERE OTHER INSTANCES WHERE PEOPLE ACTUALLY DID NOT WANT TO GIVE BLOOD OR DO A FINGERSTICK, BUT THEY WANTED TO UNDERSTAND, FOR EXAMPLE, HOW THE DEVICES WORKED AND WHAT IT WOULD BE LIKE FOR SOMEONE TO USE THE DEVICE.
MR. DOWNEY: OKAY. AND CAN YOU EXPLAIN IF THE -- IF THERE WAS NOT AN ACTUAL BLOOD SAMPLE DRAWN, WHAT WOULD THAT PROCESS LOOK LIKE TO SOMEONE RECEIVING A DEMONSTRATION?
ELIZABETH A. HOLMES: IF NO SAMPLE WAS DRAWN, THE DEVICE WOULD BE CONFIGURED TO BE ABLE TO RECEIVE A CARTRIDGE, EVEN THOUGH THERE WASN'T A SAMPLE IN THE CARTRIDGE, SO THAT WE COULD SHOW THE TOUCHSCREEN WITH ALL OF THE INPUTS THAT A PERSON COULD PUT IN ABOUT THEIR HEALTH OR OTHER INFORMATION THAT COULD BE THEN INTEGRATED IN THE APP.
MR. DOWNEY: AND WHAT WOULD HAPPEN IF YOU, IN THE ORDINARY COURSE IF YOU PUT A CARTRIDGE IN WITH NO BLOOD SAMPLE IN IT?
ELIZABETH A. HOLMES: THE MACHINE WOULD REJECT IT.
MR. DOWNEY: AND WOULD YOU BE ABLE TO RUN THE PROCESS OF THE MACHINE WORKING ITS WAY THROUGH TO THE END OF THE TEST?
MR. DOWNEY: AND I THINK YOU MENTIONED A PROTOCOL WOULD ALLOW FOR THAT?
MR. DOWNEY: DO YOU NOW UNDERSTAND THAT THAT'S WHAT HAS BEEN REFERRED TO AS THE NULL PROTOCOL?
ELIZABETH A. HOLMES: I UNDERSTAND THAT NOW.
MR. DOWNEY: DID YOU UNDERSTAND THAT -- DID YOU HEAR THAT TERM AT THE TIME?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: DID YOU HAVE ANY CONCERN AT THE TIME THAT THIS METHOD OF DEMONSTRATION WAS MISLEADING?
ELIZABETH A. HOLMES: NOT AT ALL.
MR. DOWNEY: DID ANYONE AT THERANOS EVER EXPRESS A CONCERN TO YOU THAT THEY THOUGHT YOU WERE MISLEADING PEOPLE BY CONDUCTING DEMONSTRATIONS IN THIS WAY?
ELIZABETH A. HOLMES: NOT AT ALL.
MR. DOWNEY: NOW, WE'VE TALKED ABOUT THE FACT THAT IN YOUR RELATIONSHIP WITH WALGREENS, THERE WAS A PHASE I AND A PHASE II. DO YOU RECALL THAT DISCUSSION?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IN PHASE I, THE SAMPLES THAT WERE DRAWN FROM PATIENTS WOULD BE TESTED IN THE CENTRAL LABORATORY AT THERANOS; IS THAT RIGHT?
MR. DOWNEY: AND COULD YOU -- IF CONDUCTING A DEMONSTRATION IN THERANOS'S HEADQUARTERS, COULD YOU REPLICATE THE PHASE I PROCESS FOR SOMEONE RECEIVING THE DEMONSTRATION?
ELIZABETH A. HOLMES: WE DID, YES.
MR. DOWNEY: AND TELL US HOW YOU WENT ABOUT DOING THAT.
ELIZABETH A. HOLMES: WE PHYSICALLY CONSTRUCTED WELLNESS CENTERS INSIDE OF THERANOS WHERE PEOPLE COULD COME INTO A ROOM THAT WAS DESIGNED TO LOOK LIKE A WALGREENS SERVICE CENTER, HAVE A PHLEBOTOMIST CHECK THEM IN, DO A COLLECTION OF THE FINGERSTICK JUST LIKE YOU WOULD DO IN THE STORE, AND HAVE THOSE SAMPLES TRANSPORTED TO OUR LAB.
MR. DOWNEY: OKAY. AND PHASE II OF THE RELATIONSHIP WAS TO BE A SITUATION WHERE THE TESTING WOULD ACTUALLY BE PERFORMED IN THE STORE; IS THAT RIGHT?
MR. DOWNEY: AND WERE YOU ALSO ABLE TO DEMONSTRATE TO PEOPLE RECEIVING DEMONSTRATIONS HOW THAT PROCESS WOULD WORK?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: AND COULD YOU EXPLAIN HOW THAT WOULD WORK?
ELIZABETH A. HOLMES: YES. IN THAT CASE YOU HAVE THE DEVICE RIGHT WHERE THE PATIENT IS, AND YOU CAN DO A FINGERSTICK AND PUT THE SAMPLE DIRECTLY INTO A CARTRIDGE AND RUN THAT CARTRIDGE ON THE DEVICE RIGHT THERE ON THE SPOT.
MR. DOWNEY: AND WOULD THAT REPORT RESULTS?
ELIZABETH A. HOLMES: IT DID.
MR. DOWNEY: AND IN SOME INSTANCES, WOULD THOSE RESULTS BE REPORTED ON A THERANOS APPLICATION IF THE PERSON RECEIVING THE DEMONSTRATION HAD DOWNLOADED THAT APPLICATION?
ELIZABETH A. HOLMES: THEY COULD BE, OR ON THE TOUCHSCREEN OF THE DEVICE THEMSELVES.
MR. DOWNEY: OKAY. NOW, YOU MENTIONED THAT DR. YOUNG WAS THE PERSON RESPONSIBLE FOR REVIEWING THE RESULTS; IS THAT RIGHT?
ELIZABETH A. HOLMES: HE WAS.
MR. DOWNEY: AND WAS DR. YOUNG THE HEAD OF RESEARCH AND DEVELOPMENT AT THE COMPANY AT THAT TIME?
MR. DOWNEY: WHY WAS THE CLIA LAB NOT TYPICALLY INVOLVED IN DEMONSTRATIONS?
ELIZABETH A. HOLMES: MUCH OF THE DEMONSTRATIONS WERE BEFORE THE CLIA LAB WAS OPERATIONAL AT RETAIL. BUT THEN OTHERWISE THE DEMONSTRATIONS WERE GENERALLY TO SHOW TECHNOLOGY OR OTHERWISE NEW THINGS THAT THE COMPANY WAS WORKING ON. SO WE HAD A SEPARATE PROCESS FOR TECHNOLOGY DEMONSTRATIONS AS OPPOSED TO A PHYSICIAN ORDERING A LAB TEST FOR A PATIENT.
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK AT EXHIBIT 966, WHICH IS ALREADY IN EVIDENCE.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: AND THAT WOULD BE IN VOLUME 3 OF YOUR -- AND I WANT TO DIRECT YOUR ATTENTION TO PAGE 3 OF THIS EXHIBIT.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: AND DO YOU SEE AT THE TOP THAT THIS IS LABELLED "THERANOS TEST REPORT TECHNOLOGY DEMONSTRATION"?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU SEE THAT UNDER ORDERING M.D., THERE'S AN INDICATION TECHNOLOGY DEMONSTRATION?
MR. DOWNEY: IN YOUR EXPERIENCE, WERE THE REPORTS RELATED TO THESE RESULTS GENERALLY LABELLED ALONG THOSE LINES?
ELIZABETH A. HOLMES: THEY WERE.
MR. DOWNEY: WERE THERE INSTANCES WHERE THE CLIA LAB GOT INVOLVED WITH THE DEMONSTRATIONS THAT WERE BEING PERFORMED?
MR. DOWNEY: AND WHAT CIRCUMSTANCES WOULD LEAD TO THAT?
ELIZABETH A. HOLMES: GENERALLY CIRCUMSTANCES WHERE A PATIENT MIGHT SHOW UP AT A WALGREENS WITH THE PHYSICIAN ORDER OR OTHERWISE DOING TESTING THROUGH THE WALGREENS LOCATIONS.
MR. DOWNEY: WE SAW OR HEARD SOME TESTIMONY DURING THE GOVERNMENT'S CASE RELATED TO, TO CHANGING RESULTS OR MAKING EDITS TO RESULTS. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND SOMETIMES THERE WERE INSTANCES WHERE YOU WERE PART OF THOSE EMAIL DISCUSSIONS. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: WHY WERE RESULTS CHANGED OR MODIFIED FROM THE TESTS RUN DURING DEMONSTRATIONS?
ELIZABETH A. HOLMES: MY UNDERSTANDING IS THAT THERE'S A PROCESS FOR THE PEOPLE WHO ARE OVERSEEING THE RESULTS TO MAKE SURE THAT THE RESULTS ARE CORRECT. SOMETIMES ADJUSTMENTS NEED TO BE MADE TO A REFERENCE RANGE, OR IF THERE'S CONCERN ABOUT A RESULT, MY UNDERSTANDING IS THAT THAT RESULT SHOULD NOT BE RELEASED. AND DR. YOUNG IN THE R&D CONTEXT, OR THE CLINICAL LABORATORY, HAD RULES OF HOW TO DO THAT PROPERLY.
MR. DOWNEY: AND DID YOU UNDERSTAND THAT DR. YOUNG, OR SOMEONE ACTING IN HIS PLACE, APPROVED THE RESULTS OF EVERY DEMONSTRATION?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: IS IT YOUR UNDERSTANDING THAT ON SOME OCCASIONS, ANOTHER SCIENTIST WOULD FILL IN IN OVERSEEING THE DEMONSTRATION IF DR. YOUNG WAS NOT AVAILABLE?
MR. DOWNEY: DID YOU EVER OVERRULE ANY MEMBER OF THE R&D TEAM OR ANY SCIENTIST AS TO WHAT THE RESULTS OF A DEMONSTRATION SHOULD BE?
MR. DOWNEY: WAS THERE EVER ANY INSTANCE WHERE YOU DIRECTED THE SCIENTIFIC TEAM TO ENTER RESULTS THAT YOU THOUGHT WERE CONTRARY TO WHAT THEY THOUGHT THE APPROPRIATE RESULT WAS?
MR. DOWNEY: NOW, AFTER 2016, DID THE COMPANY CONTINUE TO CONDUCT DEMONSTRATIONS?
MR. DOWNEY: AND DID THAT --
MR. LEACH: OBJECTION. RELEVANCE. RELEVANCE.
JUDGE DAVILA: MR. DOWNEY?
MR. DOWNEY: I JUST HAVE TWO QUESTIONS, YOUR HONOR. THEY RELATE TO A CHANGE IN THE PROCESS AND THAT'S IT.
JUDGE DAVILA: I'LL ALLOW IT.
BY MR. DOWNEY:
MR. DOWNEY: AND DID THE PROCESS OF CONDUCTING DEMONSTRATIONS CHANGE AT ALL DURING THAT PERIOD?
MR. DOWNEY: AND IN WHAT WAY DID THE PROCESS CHANGE?
ELIZABETH A. HOLMES: IT CHANGED IN THAT WE OPENED UP THE DEVICE TO ACTUALLY SEE THE INSIDE OF THE DEVICE WORKING.
MR. DOWNEY: NOW, WHEN WE SPOKE A WEEK AGO, WE TALKED ABOUT CONVERSATIONS THAT YOU HAD WITH VARIOUS INVESTORS. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU RECALL THAT SOME OF YOUR TESTIMONY RELATED TO THE INTELLECTUAL PROPERTY THAT THERANOS HAD DEVELOPED?
MR. DOWNEY: AND DO YOU RECALL THAT YOU TESTIFIED THAT SOME INVESTORS HAD LOOKED VERY CAREFULLY AT THE PATENTS THAT THERANOS HAD FOR ITS TECHNOLOGY?
MR. DOWNEY: DID THAT OCCUR THROUGHOUT THE TIME THAT YOU WERE AT THERANOS?
ELIZABETH A. HOLMES: IT DID.
MR. DOWNEY: AND DID THERANOS ITSELF AT ANY TIME EVER TRY TO VALUE ITS INTELLECTUAL PROPERTY AND MAKE A DETERMINATION OF HOW MUCH THAT INTELLECTUAL PROPERTY WAS WORTH?
MR. DOWNEY: WHEN DO YOU RECALL THAT OCCURRING?
ELIZABETH A. HOLMES: SOME ANALYSIS WAS DONE BY OUR BOARD AROUND 2010 AND AGAIN LATER IN 2017.
MR. DOWNEY: OKAY. AND TELL US WHAT PROCESS YOU UNDERSTAND WAS UNDERTAKEN IN 2010.
ELIZABETH A. HOLMES: OUR CHAIRMAN HAD EXPERIENCE WORKING WITH MEDICAL DEVICE COMPANIES THAT WERE VERY PATENT HEAVY, AND HE HAD PREVIOUSLY HAD WILSON SONSINI DO AN ANALYSIS OF OUR PATENT PORTFOLIO AND ITS STRENGTHS AND CAME UP WITH A NUMBER THAT HE THOUGHT WAS REPRESENTATIVE OF THE VALUE OF THAT IP.
MR. DOWNEY: AND THIS WAS A VALUATION AS OF 2010?
MR. DOWNEY: AND WAS THAT AROUND THE TIME THAT YOU WERE HAVING CONVERSATIONS WITH WALGREENS AND SAFEWAY?
ELIZABETH A. HOLMES: IT WAS.
MR. DOWNEY: AND WHAT VALUE WAS ATTRIBUTED TO THERANOS'S PATENT PORTFOLIO AT THAT TIME AS OF 2010?
ELIZABETH A. HOLMES: OVER A BILLION DOLLARS.
MR. DOWNEY: AND DID YOU -- DID THERANOS CONTINUE TO TRY TO ASSESS THE VALUE OF ITS PATENT PORTFOLIO AS IT WENT THROUGH THE PERIOD FOLLOWING 2010?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: AND YOU MENTIONED THERE WAS A SUBSEQUENT VALUATION OF THERANOS'S PATENT IN 2017.
MR. DOWNEY: WHY WAS THAT UNDERTAKEN?
MR. LEACH: YOUR HONOR, OBJECTION. RELEVANCE. 403.
JUDGE DAVILA: I'M NOT CERTAIN OF THE RELEVANCE OF THE 2017 VALUATION.
MR. DOWNEY: WELL, YOUR HONOR, I THINK THERE ARE OPPORTUNITIES FOR -- I'M RELUCTANT TO DISCUSS IT NOW, BUT MAYBE WE CAN --
JUDGE DAVILA: SURE. OF COURSE. MAYBE YOU CAN MOVE TO ANOTHER TOPIC.
MR. DOWNEY: MAYBE I CAN MOVE TO ANOTHER TOPIC AND WE CAN RETURN TO IT. I THINK IT WOULD REQUIRE A LITTLE MORE DISCUSSION THAN WOULD BE APPROPRIATE AT THIS TIME.
JUDGE DAVILA: THAT WOULD BE HELPFUL. PARDON ME FOR INTERRUPTING YOUR EXAMINATION, BUT LET'S PASS THIS TOPIC AND MOVE ON TO SOMETHING ELSE.
MR. DOWNEY: OKAY. FAIR ENOUGH, YOUR HONOR.
MR. DOWNEY: LET'S TALK ABOUT THE CLINICAL LABORATORY AT THERANOS.
MR. DOWNEY: DURING WHAT PERIOD DID THERANOS OPERATE A CLINICAL BLOOD TESTING LABORATORY?
ELIZABETH A. HOLMES: FROM 2011 TO 2016.
MR. DOWNEY: AND AS PART OF THE PROCESS OF OFFERING CLINICAL BLOOD TESTING SERVICES, ARE LABS SOMETIMES REQUIRED TO BE CERTIFIED BY THE CENTER FOR MEDICARE AND MEDICAID SERVICES?
MR. DOWNEY: AND DID THERANOS MAKE EFFORTS TO BECOME CERTIFIED BY THE CENTER FOR MEDICAID AND MEDICARE SERVICES?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: AND CENTER FOR MEDICAID AND MEDICARE SERVICES IS ABBREVIATED AS CMS?
MR. DOWNEY: AND THAT'S WHAT WE'VE BEEN HEARING ABOUT DURING THE COURSE OF THE CASE?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND WHY DID THERANOS -- WHEN DID THERANOS SEEK THAT CERTIFICATION?
ELIZABETH A. HOLMES: WE SOUGHT THE CERTIFICATION IN 2011.
MR. DOWNEY: NOW, I THINK YOU PREVIOUSLY TESTIFIED THAT THE AGREEMENT TO PERFORM TESTING OF BLOOD SAMPLES WITH WALGREENS DIDN'T TAKE PLACE UNTIL 2012. IS THAT RIGHT?
MR. DOWNEY: AND WHY WAS THERANOS OPENING A CLINICAL LABORATORY IN 2011 IF THE BLOOD TESTS WERE GOING TO BE RUN IN WALGREENS STORES AT THAT TIME?
ELIZABETH A. HOLMES: WE UNDERSTOOD WE NEEDED TO DO THAT AS PART OF THE REGULATORY PROCESS, AND WE ALSO UNDERSTOOD THAT THERE WERE GOING TO BE SOME TESTS THAT WERE NOT ORDERED THAT FREQUENTLY THAT WE WOULD NEED A TRADITIONAL LAB TO BE ABLE TO RUN.
MR. DOWNEY: OKAY. NOW, DID THE, DID THE DECISION TO CONDUCT THE BLOOD TESTING AT THERANOS CHANGE THE SCOPE OF WHAT WAS REQUIRED TO BUILD A CLINICAL LABORATORY AND DEVELOP A CLINICAL LABORATORY AT THERANOS?
ELIZABETH A. HOLMES: VERY MUCH.
MR. DOWNEY: AND HOW DID IT CHANGE THAT?
ELIZABETH A. HOLMES: IT MEANT THAT NOW WE NEEDED A CENTRAL LAB FACILITY THAT WAS GOING TO HANDLE ALL OF THE SAMPLES THAT WERE COMING FROM THE STORES, AND THAT ALL OF THESE SAMPLES WOULD BE COMING IN AT THE SAME TIME, AS OPPOSED TO IN A RETAIL STORE WITH A DEVICE WHERE ONE PATIENT AT A TIME WAS PLACING A SAMPLE INTO THE DEVICE, RUNNING IT, AND THEN YOU WOULD GET THE NEXT PATIENT.
MR. DOWNEY: OKAY. AND WAS A PROCESS UNDERTAKEN TO EXPAND THE SCOPE OF THE CLINICAL LABORATORY BETWEEN 2011 AND THE TIME THAT THE CLINICAL LAB BEGAN ANALYZING SAMPLES FROM WALGREENS?
ELIZABETH A. HOLMES: IT WAS, YES.
MR. DOWNEY: WERE YOU INVOLVED IN OVERSEEING THE CLINICAL LABORATORY ON A DAY-TO-DAY BASIS?
MR. DOWNEY: WHO WAS RESPONSIBLE FOR THE OPERATIONAL MANAGEMENT OF THE LAB?
ELIZABETH A. HOLMES: SUNNY BALWANI.
MR. DOWNEY: AND WHEN I SAY "OPERATIONAL MANAGEMENT," DO YOU UNDERSTAND THAT I MEAN NOT SCIENTIFIC, BUT THINGS LIKE PERSONNEL AND EXPENDITURE AND MANAGEMENT OF DAY-TO-DAY ACTIVITIES?
ELIZABETH A. HOLMES: I DO. WE CALL IT SORT OF THE BUSINESS PARTS OF IT.
MR. DOWNEY: OKAY. AND WHO WAS RESPONSIBLE FOR THE CLINICAL SCIENTIFIC DECISION MAKING IN THE CLINICAL LAB?
ELIZABETH A. HOLMES: THE LABORATORY DIRECTOR AND LABORATORY LEADERSHIP.
MR. DOWNEY: OKAY. NOW, WHEN THE CLINICAL LAB WAS FIRST SET UP, DID YOU HAVE SOME INVOLVEMENT WITH THAT?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WHAT INVOLVEMENT DID YOU HAVE?
ELIZABETH A. HOLMES: I WORKED WITH OUR REGULATORY LAWYERS TO TRY TO FIND THE BEST LAB EXPERT IN THE SPACE TO HELP US SET UP THE LAB THE RIGHT WAY AND PUT THE SYSTEMS IN PLACE, THE QUALITY SYSTEM AND ALL OF THE PROCEDURES TO BE ABLE TO RUN THE LAB IN THE BEST WAY POSSIBLE.
MR. DOWNEY: WERE YOU ABLE TO FIND SOMEONE TO HELP YOU?
MR. DOWNEY: AND WHO DID HE -- WHO WAS THAT?
ELIZABETH A. HOLMES: THAT WAS I THINK DR. JERRY HURST.
MR. DOWNEY: AND DID MR. HURST THEN WORK TO SET UP A LAB TO YOUR UNDERSTANDING THAT FIT THE DESCRIPTION OF WHAT YOU WERE SEEKING?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: AS PART OF THAT PROCESS, DO YOU UNDERSTAND THAT THERANOS DEVELOPED POLICIES AND PROCEDURES FOR THE RUNNING OF THE LABORATORY?
MR. DOWNEY: AND AS PART OF THAT PROCESS, DID THERANOS HIRE LAB PERSONNEL WHO HAD EXPERTISE IN OPERATING A CLINICAL LAB?
MR. DOWNEY: AND AS PART OF THAT PROCESS, DID THERANOS UNDERTAKE STEPS TO PREPARE TO BE ABLE TO DEAL WITH INSPECTIONS AND EVALUATIONS BY REGULATORY AUTHORITIES?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: AND WERE ALL OF THOSE THINGS ACTIONS THAT DR. HURST WAS INVOLVED IN?
MR. DOWNEY: NOW, AM I RIGHT THAT THERANOS WAS ULTIMATELY ABLE TO OBTAIN A CERTIFICATION IN CONNECTION WITH ITS CLINICAL LAB?
MR. DOWNEY: AND THAT'S REFERRED TO AS A CLIA CERTIFICATION?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND ARE THERE DIFFERENT LEVELS OF CLIA CERTIFICATION?
MR. DOWNEY: AND CAN YOU EXPLAIN YOUR UNDERSTANDING OF WHAT THOSE DIFFERENT LEVELS ARE?
ELIZABETH A. HOLMES: I'M FAMILIAR WITH TWO. ONE IS A MODERATE COMPLEXITY LABORATORY, AND ONE IS A HIGH COMPLEXITY LABORATORY. OUR LABORATORY IN CALIFORNIA WAS A HIGH COMPLEXITY LABORATORY.
MR. DOWNEY: AND WHAT DID YOU UNDERSTANDING BEING A HIGH COMPLEXITY LABORATORY MEANT?
ELIZABETH A. HOLMES: IT MEANT THAT THERE WERE HIGHER STANDARDS THAT WE HAD TO ACHIEVE IN THE OPERATION OF OUR LABORATORY, AND IT MEANT THAT THE LABORATORY WAS ABLE TO DEVELOP ITS OWN TESTS, WHICH WE CALLED LDT'S, OR LABORATORY DEVELOPED TESTS.
MR. DOWNEY: NOW AFTER -- AND DID YOU SAY THAT THE LABORATORY ACTUALLY OFFICIALLY OPENED IN 2011?
ELIZABETH A. HOLMES: YES, WE WERE CERTIFIED IN 2011.
MR. DOWNEY: OKAY. WELL, LET'S TALK ABOUT THAT PROCESS OF CERTIFICATION. AROUND THE TIME THAT THE LAB WAS CERTIFIED, DID -- WAS THERE AN INSPECTION DONE BY CMS OF THE LAB?
MR. DOWNEY: AND DID YOU RECEIVE REPORTS OF THE RESULTS OF THAT INSPECTION?
MR. DOWNEY: AND WHAT DO YOU RECALL ABOUT THE RESULTS OF THAT INSPECTION?
ELIZABETH A. HOLMES: I RECALL THAT THERE WERE NO DEFICIENCIES IDENTIFIED.
MR. DOWNEY: ALL RIGHT. LET ME ASK YOU TO LOOK AT EXHIBIT 7728. THAT'S IN VOLUME 3.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: I'M SORRY, DID I SAY 7728?
ELIZABETH A. HOLMES: YEAH.
MR. DOWNEY: IT'S 7728.
ELIZABETH A. HOLMES: 7728. I'VE GOT 7282.
MR. DOWNEY: IN VOLUME 3, DO YOU HAVE --
ELIZABETH A. HOLMES: OH, I FOUND IT. OKAY.
MR. DOWNEY: ALL RIGHT. WHO WAS ARNOLD GELB?
ELIZABETH A. HOLMES: DR. GELB WAS OUR FIRST LABORATORY DIRECTOR.
MR. DOWNEY: AND IS 7228 AN EMAIL FROM DR. GELB TO YOU ABOUT THE CLIA LAB AT THERANOS?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 7228.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7228 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: ALL RIGHT. DO YOU SEE THIS IS AN EMAIL WHERE DR. GELB IS FORWARDING YOU A REPORT IN JANUARY OF 2012?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND IN THE FIRST BULLET POINT OF THE EMAIL, IT SAYS, "THE REPORT SHOW'S NO DEFICIENCIES BY VIRTUE OF THE FACT IT SAYS WE ARE IN COMPLIANCE AND NO DEFICIENCIES ARE LISTED." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DID THIS FOLLOW AN INSPECTION THAT WAS CONDUCTED BY CMS IN LATE 2011?
MR. DOWNEY: LET ME ASK YOU TO LOOK AT PAGE 2 OF THIS DOCUMENT. IF YOU COULD JUST BLOW UP THE TOP HALF OF THE DOCUMENT. AND DO YOU SEE THAT THIS IS A FORM THAT IS -- THAT IT HAS ON THE HEADER THAT IT'S FROM THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, CENTERS FOR MEDICARE AND MEDICAID SERVICES?
MR. DOWNEY: AND THEN DO YOU SEE THAT THERE'S AN INDICATION IN THE LEFT-HAND COLUMN THAT DEFICIENCIES -- THERE'S A PLACE FOR DEFICIENCIES TO BE NOTED?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU SEE THE INITIAL COMMENTS THAT ARE CONTAINED UNDER THAT COLUMN?
MR. DOWNEY: AND DO YOU SEE THAT NO DEFICIENCIES WERE IDENTIFIED IN THE LAB BY CMS AS OF THAT DATE?
MR. DOWNEY: AND WHAT DID YOU UNDERSTAND WITH RESPECT TO THERANOS'S CLIA LAB AT THE BEGINNING OF 2012 AFTER RECEIVING THIS DOCUMENT?
ELIZABETH A. HOLMES: I UNDERSTOOD THAT THE POLICIES AND PROCEDURES IN THE SYSTEM, THE QUALITY SYSTEM THAT WE PUT IN PLACE FOR THE LABORATORY WAS GOOD.
MR. DOWNEY: YOU MENTIONED THAT MR. HURST HAD ASSISTED YOU -- OR DR. HURST HAD ASSISTED YOU IN ESTABLISHING SOME OF THOSE PROCEDURES; IS THAT RIGHT?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: AND WAS DR. GELB ALSO INVOLVED IN PROMULGATING SOME OF THE PROCEDURES?
MR. DOWNEY: DO YOU KNOW HOW MANY STANDARD OPERATING PROCEDURES WERE PUT IN PLACE IN THE CLIA LABORATORY DURING THIS PERIOD?
ELIZABETH A. HOLMES: I DON'T KNOW EXACTLY, BUT MY IMPRESSION WAS HUNDREDS.
MR. DOWNEY: WERE YOU AWARE OF ALL OF THE TOPICS THAT THOSE VARIOUS PROCEDURES COVERED?
MR. DOWNEY: DID YOU HAVE ANY ROLE IN REVIEWING OR APPROVING STANDARD OPERATING PROCEDURES FOR HOW THE LAB WAS TO WORK?
ELIZABETH A. HOLMES: I DID NOT.
MR. DOWNEY: WHO DID?
ELIZABETH A. HOLMES: DR. HURST, DR. GELB, THE LABORATORY EXPERTS THAT DR. GELB WAS HIRING FOR THE CLIA LAB; AND AS TO TESTS THAT MIGHT BE DEVELOPED BY THERANOS ITSELF, DR. YOUNG AND OTHER SCIENTISTS FROM R&D.
MR. DOWNEY: AND WHAT UNDERSTANDING DID YOU HAVE ABOUT THE STANDARD OPERATING PROCEDURES?
ELIZABETH A. HOLMES: THAT I HAD SOMEONE IN DR. HURST WHO UNDERSTOOD WHAT A BEST IN CLASS PROCEDURE WAS AND THAT HE WAS WORKING WITH DR. GELB TO MAKE SURE THAT WE HAD THOSE PROCEDURES IN PLACE.
MR. DOWNEY: OKAY. LET'S TALK ABOUT THE PERSONNEL THAT WERE HIRED INTO THE CLIA LABORATORY IN 2012 AND 2013. FIRST OF ALL, JUST AS TO PERSONNEL IN THE LAB, DID YOU HAVE AN UNDERSTANDING AS TO WHO WAS RESPONSIBLE WITHIN THE LAB FOR ASSURING THAT THE RESULTS THAT THE LAB GENERATED WERE ACCURATE AND RELIABLE?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: WHO DID YOU UNDERSTAND THAT WAS?
ELIZABETH A. HOLMES: ULTIMATELY THE LAB DIRECTOR.
MR. DOWNEY: BUT DID YOU HAVE AN UNDERSTANDING THAT THERE WERE OTHER PERSONNEL WHO WORKED IN THE LAB AS WELL?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND DID YOU UNDERSTAND THE ROLE THAT SOME OF THEM PLAYED?
ELIZABETH A. HOLMES: YES. I UNDERSTOOD THE LAB DIRECTOR COULD DELEGATE RESPONSIBILITY, AND I UNDERSTOOD THAT YOU COULD PUT A HIGHLY QUALIFIED TEAM IN PLACE AROUND THE LAB DIRECTOR OF GENERAL SUPERVISORS, TECHNICAL SUPERVISORS, AND CLINICAL LAB SCIENTISTS WHO COULD DO THE SAME.
MR. DOWNEY: AND DR. ROSENDORFF WAS THE LAB DIRECTOR AT THE TIME THAT THERANOS SERVICES IN WALGREENS STORES WERE LAUNCHED?
ELIZABETH A. HOLMES: HE WAS.
MR. DOWNEY: WE'LL TALK ABOUT HIM IN A MOMENT. DID YOU HAVE AN UNDERSTANDING OF WHAT KIND OF PEOPLE WERE HIRED TO WORK IN THE CLINICAL LAB AT THE TIME OF THE WALGREENS LAUNCH ALONGSIDE DR. ROSENDORFF?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND DID YOU HAVE AN UNDERSTANDING AS TO THEIR QUALIFICATIONS?
ELIZABETH A. HOLMES: GENERALLY.
MR. DOWNEY: AND WHAT DID YOU UNDERSTAND?
ELIZABETH A. HOLMES: I UNDERSTOOD THAT THESE ROLES OF TECHNICAL SUPERVISOR, GENERAL SUPERVISOR, AND CLINICAL LAB SCIENTIST WERE ROLES THAT YOU HAD TO BE LICENSED BY THE STATE FOR, THAT YOU HAD TO HAVE A LOT OF EXPERIENCE IN THE CLINICAL LABORATORY TO GET THOSE CERTIFICATIONS, AND THAT DR. ROSENDORFF WAS HIRING TO FILL THOSE ROLES AND HAVING MULTIPLE PEOPLE IN THE ORGANIZATION WHO COULD FILL EACH OF THOSE ROLES, AND THAT ALSO HE WAS BRINGING IN A QUALIFIED QUALITY CONTROL MANAGER WHO HIMSELF HAD BEEN A CAP INSPECTOR BEFORE.
MR. DOWNEY: DO YOU ACTUALLY RECALL THE PROCESS OF HIRING DR. ROSENDORFF TO SERVE AS THE LAB DIRECTOR?
ELIZABETH A. HOLMES: I REMEMBER MEETING HIM.
MR. DOWNEY: AND WHAT WERE YOUR PERCEPTIONS OF HIM WHEN YOU FIRST MET HIM?
ELIZABETH A. HOLMES: I WAS REALLY EXCITED TO MEET HIM. I THOUGHT IT WAS WONDERFUL THAT HE HAD WORKED IN A CHILDREN'S HOSPITAL WITH SMALL SAMPLES BEFORE. HE SEEMED TO BE A REALLY QUALIFIED DOCTOR, AND HAD THIS ADDITIONAL LABORATORY EXPERIENCE IN A CHILDREN'S HOSPITAL IN PENNSYLVANIA AND SEEMED TO HAVE PERFECT EXPERTISE FOR WHAT WE WANTED TO DO.
MR. DOWNEY: WHEN HE WAS HIRED, WAS HE HIRED TO SERVE FULL TIME OR PART TIME AS THE LAB DIRECTOR?
ELIZABETH A. HOLMES: FULL TIME.
MR. DOWNEY: YOU MENTIONED THAT, ALONG WITH DR. ROSENDORFF, A QUALITY CONTROL PERSON WAS HIRED IN CONNECTION WITH THE CLIA LAB.
MR. DOWNEY: AND WHO WAS THAT?
ELIZABETH A. HOLMES: LANGLY GEE.
MR. DOWNEY: AND WHAT WAS MR. GEE'S BACKGROUND BEFORE HE JOINED THERANOS?
ELIZABETH A. HOLMES: HE HAD WORKED AT OTHER CLINICAL LABORATORIES AND HELPED BUILD AND OVERSEE THEIR QUALITY SYSTEMS, AND HE HAD ALSO SERVED AS A CAP INSPECTOR, WHICH IS ONE OF THE BODIES THAT INSPECTS CLIA LABORATORIES.
MR. DOWNEY: WHAT DOES CAP STAND FOR?
ELIZABETH A. HOLMES: COLLEGE OF AMERICAN PATHOLOGISTS.
MR. DOWNEY: AND WHEN HE WAS HIRED AT THERANOS, WHO AT THERANOS DID HE REPORT TO?
ELIZABETH A. HOLMES: HE REPORTED TO DR. ROSENDORFF.
MR. DOWNEY: AND DID YOU INTERACT REGULARLY WITH MR. GEE RELATING TO HIS WORK?
ELIZABETH A. HOLMES: I DID NOT.
MR. DOWNEY: WHAT UNDERSTANDING DID YOU HAVE ABOUT THE QUALITY CONTROL PROGRAM AT THERANOS BEGINNING IN 2013 AND 2015?
ELIZABETH A. HOLMES: I UNDERSTOOD THAT MR. GEE WAS MAINTAINING OR OVERSEEING THAT PROGRAM ACCORDING TO THE PROCEDURES THAT WE'D SET UP, THAT HE WOULD REVIEW DATA AND TRY TO CREATE AN ENVIRONMENT IN WHICH WE COULD IDENTIFY AND TRIAGE ISSUES, FIX THEM SO THAT THEY WOULDN'T RECUR, AND THAT LABORATORY LEADERSHIP WAS ACTIVELY INVOLVED IN THAT.
MR. DOWNEY: WE'VE HEARD THE TERM DURING THE COURSE OF THIS TRIAL "PROFICIENCY TESTING." DO YOU RECALL HEARING TESTIMONY ABOUT THAT SUBJECT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WHILE YOU WERE AT THERANOS, DID YOU HAVE AN UNDERSTANDING OF WHAT PROFICIENCY TESTING WAS?
ELIZABETH A. HOLMES: GENERALLY, YES.
MR. DOWNEY: AND WHAT DID YOU UNDERSTAND?
ELIZABETH A. HOLMES: I UNDERSTOOD THAT IT WAS A SET OF TESTS THAT NEEDED TO BE RUN BY CLIA LABORATORIES TO COMPARE COMMERCIALLY AVAILABLE MACHINES TO HOW THEY WERE PERFORMING AGAINST OTHER MACHINES OF THE EXACT SAME TYPE.
MR. DOWNEY: AND DID -- TO YOUR KNOWLEDGE, DID THERANOS HAVE IN PLACE STANDARD OPERATING PROCEDURES RELATED TO PROFICIENCY TESTING?
MR. DOWNEY: DID YOU BECOME AWARE THAT THERANOS HAD SOME UNIQUE PROCESSES WITH REGARD TO ITS PROFICIENCY TESTING PROGRAM?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND IN WHAT WAY WERE -- WAS THERANOS'S PROGRAM UNIQUE?
ELIZABETH A. HOLMES: I LEARNED THAT PROFICIENCY TESTING WAS SPECIFIC TO COMMERCIALLY AVAILABLE MACHINES WHERE YOU COULD TEST THE MACHINE AGAINST THE EXACT SAME MACHINE RUN SOMEWHERE ELSE, AND THAT IF YOU WERE TO DEVELOP A TEST OR A SYSTEM FOR WHICH THERE WAS NO EXACT SAME COMMERCIALLY AVAILABLE MACHINE TO COMPARE IT TO, YOU NEEDED TO FOLLOW A PROCESS CALLED AAP, WHICH WAS FOR LABORATORY DEVELOPED TESTS.
MR. DOWNEY: AND WERE -- WAS DR. ROSENDORFF INVOLVED IN THE, TO YOUR KNOWLEDGE, IN THE PROCESS OF COMING UP WITH STANDARD OPERATING PROCEDURES FOR AAP?
MR. DOWNEY: AND WAS DR. YOUNG INVOLVED IN THAT PROCESS?
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 12478, WHICH IS ALREADY IN EVIDENCE. IF YOU LOOK AT THIS EMAIL IN THE -- TOWARDS THE BOTTOM OF THE PAGE. IT'S AN EMAIL FROM DR. YOUNG TO DR. ROSENDORFF, AND YOU AND MR. BALWANI ARE COPIED. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THERE UNDERNEATH THAT, DO YOU SEE IN THE SECOND PARAGRAPH THAT DR. YOUNG SAYS, "FOR OUR LDT'S, ALL OF WHICH ARE CLIA REGULATED AT THE MOMENT, WE NEED SOP'S FOR PT." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: SO WAS DR. YOUNG INDICATING THAT HE NEEDED TO DEVELOP STANDARD OPERATING PROCEDURES FOR ITS PROFICIENCY TESTING ON ITS OWN DEVICES?
MR. DOWNEY: AND DR. YOUNG IN THE NEXT SENTENCE GOES ON TO SAY, "HOWEVER, THERE ARE SEVERAL FACTORS THAT PREVENT US FROM ENROLLING IN THE TRADITIONAL PT PROGRAMS." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND HE GOES ON TO IDENTIFY SOME OF THOSE FACTORS. DO YOU SEE THAT?
MR. DOWNEY: AND DID YOU FORM AN UNDERSTANDING OF WHY THERANOS COULD NOT HAVE TRADITIONAL PT PROGRAMS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND IS IT WHAT YOU DESCRIBED BEFORE RELATED TO THE, TO THE SMALL SAMPLE SIZE AND THE FACT THAT THERE WEREN'T TESTS TO WHICH THERANOS COULD COMPARE?
ELIZABETH A. HOLMES: YES, THAT OUR ANALYZERS AND ANALYST METHODS WERE PROPRIETARY AND THERE WAS NOT, AS DR. YOUNG DESCRIBES HERE, A PEER GROUP.
MR. DOWNEY: BUT EVEN THOUGHT THAT FORM OF PROFICIENCY TESTING WAS NOT SEEN AS POSSIBLE, DID DR. YOUNG PROPOSE HOW TO DO PROFICIENCY TESTING?
MR. DOWNEY: AND IF YOU'LL LOOK AT THE NEXT PARAGRAPH, WHICH IS LABELLED PROPOSAL. AND DO YOU SEE IN THE FIRST SENTENCE HE SAYS THAT, "WE MUST INITIATE AN ALTERNATIVE ASSESSMENT PROCEDURE, AAP"?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THEN HE GOES ON TO DESCRIBE HOW THAT AAP WOULD WORK IN THE BALANCE OF THE PARAGRAPH?
MR. DOWNEY: AND IF YOU GO UP TO THE TOP EMAIL FROM -- DO YOU SEE ON THE TOP THERE'S AN EMAIL RESPONDING TO THIS FROM DR. ROSENDORFF?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DR. ROSENDORFF WRITES, "DANIEL: THANKS. "I'LL WRITE UP THE SOP AND INCORPORATE WHAT WE HAVE DISCUSSED."
MR. DOWNEY: AND DID YOU UNDERSTAND THAT DR. ROSENDORFF HAD DEVELOPED STANDARD OPERATING PROCEDURES FOR PROFICIENCY TESTING BASED ON DR. YOUNG'S RECOMMENDATION?
MR. DOWNEY: AND DID YOU EXPECT THAT DR. ROSENDORFF WAS IMPLEMENTING THAT PROGRAM THROUGHOUT 2013 AND 2014?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: DID YOU HAVE AN UNDERSTANDING OF HOW THERANOS WAS PERFORMING IN ITS PROFICIENCY TESTING?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WHAT UNDERSTANDING DID YOU HAVE?
ELIZABETH A. HOLMES: THAT WE WERE PERFORMING EXTREMELY WELL.
MR. DOWNEY: OKAY. NOW, AT SOME POINT IN -- EARLY IN THE LIFE OF THE CLIA LAB, DID CMS CONDUCT ANOTHER INSPECTION OF THERANOS'S CLINICAL LAB?
ELIZABETH A. HOLMES: THEY DID.
MR. DOWNEY: SO I THINK WE LOOKED A MOMENT AGO THAT THERANOS HAD OPENED THE LAB IN 2011; CORRECT?
MR. DOWNEY: AND AN INSPECTION WAS DONE THEN?
MR. DOWNEY: AND THEN IN 2013 THERANOS LAUNCHED ITS TESTING SERVICES AT WALGREENS; CORRECT?
MR. DOWNEY: AND A CLINICAL, A CMS INSPECTION WAS CONDUCTED SHORTLY AFTER THAT?
MR. DOWNEY: IN ADDITION TO CMS, DID SOME STATE REGULATORS ALSO INSPECT THERANOS'S CLIA LAB IN 2013?
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 7282 IN VOLUME 3.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: IS 7282 AN EMAIL FROM MR. BALWANI TO CLINICAL LAB STAFF AT THERANOS IN APRIL OF 2013?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 7282.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7282 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: IF WE JUST LOOK AT THE FIRST PARAGRAPH, DO YOU SEE THAT MR. BALWANI REPORTS, "CONGRATULATIONS TO ALL OF YOU FOR THE NEW YORK INSPECTION TODAY. JOB WELL DONE. I HOPE YOU ALL FEEL GOOD ABOUT THIS AND FOUND THIS TO BE AN EDUCATIONAL EXPERIENCE. OUR COMMITMENT AS A COMPANY IS TO RAISE OUR OWN STANDARDS EVEN MORE AND HAVE THE BEST LAB IN THE WORLD WITH HIGHEST QUALITY AND SAFETY," AND HE GOES ON FROM THERE. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WHAT WAS MR. BALWANI -- WHAT WAS YOUR UNDERSTANDING OF WHAT MR. BALWANI WAS REPORTING ON HERE?
ELIZABETH A. HOLMES: HE'S CONGRATULATING THE TEAM ON THE NEW YORK INSPECTION BECAUSE THE NEW YORK INSPECTION STANDARDS WERE SOME OF THE MOST DIFFICULT, AND HE'S SAYING THAT OUR COMMITMENT AS A COMPANY IS TO RAISE OUR OWN STANDARDS TO TRY TO BUILD THE BEST LAB IN THE WORLD.
MR. DOWNEY: NOW, THERANOS'S LAB WAS LOCATED IN CALIFORNIA?
ELIZABETH A. HOLMES: WE WERE.
MR. DOWNEY: AND WHY WOULD A STATE INSPECTOR FROM NEW YORK INSPECT THERANOS'S LAB?
ELIZABETH A. HOLMES: WE WERE FILING FOR CERTIFICATION IN ALL 50 STATES IN ANTICIPATION OF A NATIONAL ROLLOUT, AND NEW YORK WAS A SPECIAL STATE BECAUSE IT HAS THE HIGHEST STANDARDS, OR THE MOST DIFFICULT STANDARDS TO MEET, AND WE WANTED TO GET THAT CERTIFICATION.
MR. DOWNEY: DID YOU EXPECT THAT THE STATES IN WHICH THERANOS SOUGHT A LICENSE WOULD ALSO INSPECT THERANOS'S CLINICAL LAB?
MR. DOWNEY: NOW, SHORTLY -- WELL, LATER IN 2013 DID CMS AGAIN INSPECT THERANOS'S CLINICAL LAB?
ELIZABETH A. HOLMES: THEY DID.
MR. DOWNEY: AND WAS THAT THE SECOND INSPECTION THAT THEY HAD DONE?
MR. DOWNEY: DID YOU HAVE AN UNDERSTANDING OF HOW OFTEN CMS TYPICALLY PERFORMS INSPECTIONS OF HIGH COMPLEXITY LABS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WHAT -- HOW OFTEN?
ELIZABETH A. HOLMES: EVERY TWO YEARS.
MR. DOWNEY: IN CONNECTION WITH THE INSPECTION IN 2013, WERE YOU INVOLVED IN PREPARATION FOR THAT?
ELIZABETH A. HOLMES: I WAS.
MR. DOWNEY: WHAT WAS YOUR INVOLVEMENT IN PREPARATION FOR THAT INSPECTION?
ELIZABETH A. HOLMES: TRYING TO HELP MAKE SURE ALL OF THE RIGHT RESOURCES WERE DEDICATED TO THE INSPECTION, MAKE SURE THAT DR. HURST AND OTHER EXPERTS WERE AVAILABLE FOR THE TEAM, AND THAT WE WERE SET UP AS BEST AS POSSIBLE FOR THE INSPECTION.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT 7363.
MR. DOWNEY: IS EXHIBIT 7363 AN EMAIL SENT TO YOU BY SURAJ SAKSENA IN PREPARATION FOR THE 2013 CLIA AUDIT?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 7363.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7363 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: WHO WAS SURAJ SAKSENA?
ELIZABETH A. HOLMES: DR. SAKSENA WAS A SCIENTIST WHO HAD WORKED IN R&D AND THEN MOVED TO THE CLIA LAB AND WAS THE INDIVIDUAL THAT SUNNY SUGGESTED SHOULD ULTIMATELY BECOME ONE OF THE LEADERS IN THE LABORATORY.
MR. DOWNEY: AND IN CONNECTION WITH THIS EMAIL, HE GIVES YOU A LIST OF DIFFERENT TASKS. DO YOU SEE THAT?
MR. DOWNEY: AND WHAT IS THE PURPOSE OF HIM GIVING YOU THIS LIST OF COMPLETED TESTS?
ELIZABETH A. HOLMES: HE WAS CONVEYING TO US READINESS FOR THE INSPECTION.
MR. DOWNEY: NOW, I WANT TO LOOK AT THE FIRST BULLET POINT WHERE IT SAYS "SOP'S FOR THE 4 LDT ASSAYS HAVE BEEN REVIEWED AND SIGNED." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WHAT ARE -- WHAT -- SOP'S REFERS TO THE STANDARD OPERATING PROCEDURES?
MR. DOWNEY: AND WHEN HE REFERS TO 4 LDT ASSAYS, WHAT DID YOU UNDERSTAND THAT TO REFER TO?
ELIZABETH A. HOLMES: FOUR OF THE PROPRIETARY TESTS THAT THERANOS HAD DEVELOPED AND VALIDATED IN ITS CLIA LAB.
MR. DOWNEY: AND WHY WAS IT NECESSARY FOR THE STANDARD OPERATING PROCEDURES FOR THOSE ASSAYS TO BE READY IN CONNECTION WITH THE 2013 CMS AUDIT?
ELIZABETH A. HOLMES: SO THAT WE COULD REVIEW WITH THE INSPECTORS, THE TEAMS COULD REVIEW WITH THE INSPECTORS THE OPERATING PROCEDURES FOR THOSE LABORATORY DEVELOPED TESTS.
MR. DOWNEY: NOW, IN CONNECTION WITH THAT 2013 CMS AUDIT, DID YOU INSTRUCT ANY THERANOS PERSONNEL TO HIDE ANY ASPECT OF THE OPERATIONS IN THE THERANOS CLINICAL LABS?
ELIZABETH A. HOLMES: ABSOLUTELY NOT.
MR. DOWNEY: DID YOU UNDERSTAND THAT THE INSPECTORS WOULD BE MADE AWARE OF ALL OF THE INFORMATION THAT THEY NEEDED TO APPROPRIATELY CONCLUDE THEIR DUTIES?
ELIZABETH A. HOLMES: OF COURSE.
MR. DOWNEY: AND DID YOU, AT THE CONCLUSION OF THE INSPECTION, RECEIVE A REPORT FROM DR. YOUNG AS TO HIS NOTES ON WHAT HAD HAPPENED DURING THE COURSE OF THAT INSPECTION?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT 7368, WHICH IS IN THE LARGER VOLUME 3.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: AND IF YOU WOULD JUST TAKE A MOMENT TO LOOK THROUGH THAT.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: IS THIS AN EMAIL THAT DR. YOUNG SENT TO YOU ABOUT THE CMS INSPECTION IN DECEMBER OF 2013?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 7368.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7368 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: SO IF YOU GO TO THE FIRST PAGE, DO YOU SEE THIS IS AN EMAIL TO YOU FROM DR. YOUNG?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THEN HE SAYS IN THE FIRST PARAGRAPH, "HERE ARE MY NOTES FROM THE AUDIT YESTERDAY"?
MR. DOWNEY: AND THEN IF YOU CONTINUE THROUGH THE DOCUMENT TO PAGE 2 OF THE ATTACHMENT.
MR. DOWNEY: I'M SORRY, REALLY PAGE 1 OF THE ATTACHMENT, PAGE 2 OF THE DOCUMENT.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: COULD WE HIGHLIGHT THE SUBJECT -- THE SENTENCE THAT IS LABELLED "TESTS." AND DO YOU SEE THAT DR. YOUNG REPORTS THERE "THE AUDITOR ASKED IF WE HAVE ANY NEW TESTS OFFERED SINCE THE LAST AUDIT"?
MR. DOWNEY: AND YOU UNDERSTOOD WHEN YOU WERE RECEIVING THIS THAT THIS WAS THE PERSONNEL FROM CMS THAT WAS ASKING THE QUESTION?
MR. DOWNEY: AND THEN HE SAYS IN THE NEXT SUBPARAGRAPH, "ADAM SAID YES." DO YOU SEE THAT?
MR. DOWNEY: AND WAS THAT A REFERENCE TO DR. ROSENDORFF?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND THEN HE GOES ON TO SAY, "ADAM SAID YES AND SPOKE ABOUT ALL LDT'S (GC, CYTO, ELISA)." IN THAT INSTANCE, WHAT ARE LDT'S WITH THOSE ABBREVIATIONS THEREAFTER REFERRING TO?
ELIZABETH A. HOLMES: THESE ARE PROPRIETARY TESTS THAT THERANOS DEVELOPED AND VALIDATED IN ITS LABORATORY FOR THREE GROUPS OF TESTS OR METHODS, GENERAL CHEMISTRY, CYTOMETRY, AND ELISA.
MR. DOWNEY: OKAY. SO WERE THOSE, THOSE ASSAYS OR DEVICES THAT ARE -- THERE'S A REFERENCE TO THERE?
ELIZABETH A. HOLMES: THESE ARE ASSAY METHODS.
MR. DOWNEY: OKAY. AND UNDER THAT THERE'S ANOTHER ENTRY AND IT SAYS, "MENTIONED EDISON 3.5." AND THAT'S THE DEVICE THAT YOU HAD BEGUN TO USE IN THE CLINICAL LAB IN CONNECTION WITH WALGREENS; IS THAT RIGHT?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND THEN HE GOES ON TO SAY, "FLOW CYTOMETER, ADVIA, AND NORMANDY LAB." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WHAT DOES THAT REFER TO?
ELIZABETH A. HOLMES: THAT REFERS TO THE MODIFICATIONS WE HAD MADE TO TRADITIONAL COMMERCIALLY AVAILABLE MACHINES TO BE ABLE TO RUN OUR PROPRIETARY SMALL SAMPLE CHEMISTRIES ON THOSE MACHINES.
MR. DOWNEY: AND ARE THESE THE MACHINES THAT YOU HAD DESCRIBED LAST WEEK AS INVOLVING A TRADE SECRET THAT THERANOS HAD -- RELATED TO TECHNOLOGY THERANOS DEVELOPED IN CONNECTION WITH THE LAUNCH?
ELIZABETH A. HOLMES: THEY ARE.
MR. DOWNEY: AND IN THIS INSTANCE THEY APPEAR TO BE BEING DISCLOSED TO THE CMS AUDITOR. WAS THAT YOUR UNDERSTANDING OF WHAT HAPPENED?
MR. DOWNEY: AND WHY WAS THERANOS COMFORTABLE COMMUNICATING TO THE AUDITOR THAT THESE METHODS HAD EXISTED?
ELIZABETH A. HOLMES: BECAUSE, AGAIN, THIS IS A GOVERNMENT REGULATOR. THEY HAD METHODS IN PLACE TO BE ABLE TO PROTECT TRADE SECRETS, AND WE COULD MAKE THESE DISCLOSURES AND STILL MAINTAIN THE PROTECTION OF OUR TRADE SECRETS.
MR. DOWNEY: OKAY. DID YOU UNDERSTAND AS A RESULT OF THIS REPORT THAT ALL OF THE TECHNOLOGIES THAT THERANOS WAS USING IN ITS CLIA LAB HAD BEEN DISCLOSED TO CMS IN 2013?
MR. DOWNEY: LET ME ASK YOU TO LOOK AT THE NEXT PAGE OF THE EXHIBIT UNDER NUMBER 11, WHICH IS LDT VALIDATION.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: AND DO YOU SEE IT ASKS, UNDER LDT VALIDATION, "AUDITOR ASKED TO SEE A REPRESENTATIVE LDT VALIDATION REPORT"? DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WHAT IS THAT A REFERENCE TO?
ELIZABETH A. HOLMES: IT'S A REFERENCE TO SHOWING THE AUDITOR ONE OF THE VALIDATION REPORTS FOR A PROPRIETARY TEST IN THE CLIA LAB.
MR. DOWNEY: AND THEN DR. YOUNG GOES ON TO REPORT THAT "SHE PICKED CREATININE AS AN EXAMPLE." DO YOU SEE THAT?
MR. DOWNEY: AND DO YOU KNOW WHAT DEVICE THAT WAS RUN ON AT THIS TIME IN THE CLINICAL LAB?
MR. DOWNEY: WHAT DEVICE?
ELIZABETH A. HOLMES: THE MODIFIED ADVIA MACHINE.
MR. DOWNEY: OKAY. AND THEN DR. YOUNG GOES ON FROM THERE TO SAY, "THIS REPORT DID NOT APPEAR TO BE THE LATEST WITH THE LINEARITY DATA." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND HE'S SUGGESTING AN ACTION THAT IT BE UPDATED TO MAKE SURE THE LATEST DATA GETS INTO THESE REPORTS; IS THAT RIGHT?
MR. DOWNEY: OKAY. SEPARATE FROM THIS DOCUMENT, DID YOU ALSO UNDERSTAND FROM THE CONVERSATIONS THAT YOU HAD WITH DR. YOUNG THAT THESE TESTS AND DEVICES WERE DISCLOSED TO CMS AS PART OF THEIR INSPECTION IN 2013?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: OVER THE COURSE OF THE TIME THAT THERANOS OPERATED SERVICE CENTERS IN WALGREENS STORES, DID YOU COME TO UNDERSTAND HOW MANY TESTS HAD BEEN OFFERED TO PATIENTS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: WHAT WAS YOUR UNDERSTANDING IN THAT REGARD?
ELIZABETH A. HOLMES: NUMBERS BETWEEN 8 AND 12 MILLION TESTS.
MR. DOWNEY: AND DID YOU UNDERSTAND --
MR. LEACH: YOUR HONOR, OBJECTION. VAGUE AS TO TIME.
JUDGE DAVILA: WHY DON'T YOU LAY A BETTER FOUNDATION AS TO THE TIME.
BY MR. DOWNEY:
MR. DOWNEY: DID YOU LEARN IN 2016, AS A RESULT OF THE CMS INSPECTION AND OTHER DEVELOPMENTS AT THERANOS, HOW MANY TESTS HAD BEEN PERFORMED AT THERANOS SERVICE CENTERS IN WALGREENS STORES?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WHAT DID YOU UNDERSTAND IN THAT REGARD?
ELIZABETH A. HOLMES: I UNDERSTOOD BETWEEN 8 TO 12 MILLION TESTS HAD BEEN PERFORMED THROUGH THERANOS STORES.
MR. DOWNEY: AND OVER THE COURSE OF TIME BETWEEN 2013 AND 2015, DID YOU HAVE AN UNDERSTANDING OF HOW MANY TESTS WERE BEING PERFORMED WITHIN THE LAB?
MR. LEACH: OBJECTION, YOUR HONOR. VAGUE AS TO "THE LAB." THERE ARE MULTIPLE LABS HERE.
MR. DOWNEY: THE CLINICAL LAB.
MR. LEACH: YOUR HONOR, OBJECTION. IT'S STILL VAGUE.
JUDGE DAVILA: WHY DON'T YOU NARROW DOWN THE SITE OF THE LAB IF YOU CAN.
MR. DOWNEY: YEAH.
MR. DOWNEY: HOW MANY -- DID YOU HAVE AN UNDERSTANDING -- IF YOU DIDN'T, THAT'S FINE, TOO. DID YOU HAVE AN UNDERSTANDING HOW MANY TESTS WERE BEING OFFERED IN THE PERIOD WHEN THE LAB WAS OPERATING BETWEEN 2013 AND 2015?
MR. LEACH: OBJECTION, YOUR HONOR.
JUDGE DAVILA: WHAT LAB ARE YOU REFERRING TO?
MR. DOWNEY: THE CLINICAL LAB.
JUDGE DAVILA: AT?
MR. DOWNEY: AT THERANOS, YES.
JUDGE DAVILA: OKAY. THANK YOU.
BY MR. DOWNEY:
MR. DOWNEY: AND WHAT WAS THAT UNDERSTANDING?
ELIZABETH A. HOLMES: BETWEEN 8 TO 12 MILLION TESTS.
MR. DOWNEY: OKAY. WERE THERE TIMES WHEN YOU LEARNED THAT DR. ROSENDORFF HAD DECIDED TO STOP OFFERING PARTICULAR TESTS?
MR. DOWNEY: DID YOU INTERFERE WITH DECISIONS THAT HE MADE IN THAT REGARD?
MR. DOWNEY: WHY NOT?
ELIZABETH A. HOLMES: BECAUSE HE HAD THE EXPERTISE TO MAKE THOSE DECISIONS.
MR. DOWNEY: TO YOUR KNOWLEDGE, WERE ANY TESTS OFFERED IN THE CLIA LABORATORY WITHOUT THE APPROVAL OF THE PERSON SERVING AS LABORATORY DIRECTOR AT THE TIME?
MR. DOWNEY: TO YOUR KNOWLEDGE, DID MR. BALWANI EVER LEARN ABOUT CIRCUMSTANCES WHERE A TEST WAS BEING OFFERED WITHOUT THE APPROVAL OF THE LABORATORY DIRECTOR?
MR. DOWNEY: DID YOU EVER OVERRULE DR. ROSENDORFF, OR ANY OTHER LAB DIRECTOR FOR THAT MATTER, AS TO WHETHER PATIENTS SHOULD GET THE RESULTS OF A PARTICULAR TEST?
MR. DOWNEY: TO YOUR KNOWLEDGE, DID MR. BALWANI?
MR. DOWNEY: NOW, YOU RECALL THAT AT THE -- EARLIER IN THE TRIAL ERIKA CHEUNG TESTIFIED. DO YOU REMEMBER THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: DO YOU RECALL EVER HAVING ANY COMMUNICATIONS WITH MS. CHEUNG WHILE SHE WAS WORKING AT THERANOS?
MR. DOWNEY: DO YOU RECALL EVER HEARING ABOUT ANY CONCERNS THAT SHE HAD PRIOR TO THE TIME THAT SHE LEFT THERANOS?
MR. DOWNEY: DO YOU RECALL THAT MS. CHEUNG SO TESTIFIED ABOUT CONCERNS THAT WERE COMMUNICATED TO HER BY ANOTHER THERANOS EMPLOYEE NAMED TYLER SHULTZ?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DID MR. SHULTZ WORK AT THERANOS?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: DID YOU KNOW TYLER SHULTZ DURING THE TIME PERIOD WHILE HE WAS WORKING AT THERANOS?
MR. DOWNEY: AND HOW DID YOU COME TO KNOW TYLER SHULTZ?
ELIZABETH A. HOLMES: HE WAS MR. SHULTZ'S GRANDSON AND GEORGE WAS ON OUR BOARD.
MR. DOWNEY: DID YOU LEARN AT SOME POINT THAT TYLER SHULTZ WAS RAISING QUESTIONS TO DR. YOUNG AND OTHERS ABOUT THERANOS'S TESTS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: WHAT DID YOU DO IN RESPONSE?
ELIZABETH A. HOLMES: I ASKED DR. YOUNG AND OUR SCIENTISTS TO LOOK INTO HIS CONCERNS SERIOUSLY AND EVALUATE EACH OF THE CONCERNS THAT HE HAD RAISED.
MR. DOWNEY: AND DO YOU RECALL LEARNING THAT DR. YOUNG MET WITH MR. SHULTZ?
MR. DOWNEY: AND LET ME ASK YOU TO LOOK AT EXHIBIT 7421.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: JUST TAKE A MOMENT TO REVIEW THAT EMAIL.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: IS THIS AN EMAIL EXCHANGE ON WHICH YOU APPEAR ON THE TOP EMAIL RELATED TO CONCERNS THAT MR. SHULTZ HAD RAISED?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 7421.
MR. LEACH: 801, 802, YOUR HONOR.
JUDGE DAVILA: THE ENTIRETY OF THIS DOCUMENT, THIS CHAIN?
MR. DOWNEY: YES, YOUR HONOR.
JUDGE DAVILA: IS THIS AN 803(6) EMAIL?
MR. DOWNEY: IT IS AN 803(6) EMAIL, AMONGST OTHER REASONS WHY IT WOULD COME IN.
JUDGE DAVILA: I'LL OVERRULE THE OBJECTION. IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7421 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: LET'S LOOK AT THE TOP OF 7421. DO YOU SEE THAT THIS IS AN EMAIL EXCHANGE WITH SEVERAL EMAILS BENEATH IT, BUT IT'S BETWEEN YOURSELF AND MR. BALWANI AND DR. YOUNG?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: OKAY. LET ME ASK YOU TO GO TO THE BOTTOM OF PAGE 2 OF THE -- YES, THAT EMAIL. AND THEN THAT CARRIES OVER ON THE NEXT PAGE. BUT LET'S LOOK AT, LET'S LOOK AT THE TOP FIRST. IS THIS EMAIL A REPORT BY DR. YOUNG TO YOU AND MR. BALWANI ABOUT A MEETING THAT HE HAD WITH MR. TYLER -- MR. TYLER SHULTZ?
MR. DOWNEY: AND WAS THAT THE MEETING THAT YOU HAD REQUESTED DR. YOUNG TO HAVE TO UNDERSTAND WHAT MR. SHULTZ'S CONCERNS WERE?
MR. DOWNEY: IF YOU GO TO THE BODY OF THE EMAIL, DR. YOUNG REPORTS AT THE TOP THAT HE'S UPDATING YOU ABOUT THE MEETING. DO YOU SEE THAT?
MR. DOWNEY: AND THEN IN THE SECOND PARAGRAPH HE GOES ON TO SAY THAT, "I EXPLAINED OUR CALCULATION METHODS AND HE WAS SLOW TO UNDERSTAND. I'M GOING TO FOLLOW-UP AGAIN WITH HIM, AS HE DOES NOT UNDERSTAND THE REASONING BEHIND RUNNING REPLICATES." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU SEE THAT HE GOES ON IN THE NEXT PARAGRAPH TO DESCRIBE A DIFFERENT QUESTION THAT MR. SHULTZ HAD RAISED IN HIS RESPONSE TO THAT QUESTION?
MR. DOWNEY: AND THEN IF YOU LOOK AT THE LAST SENTENCE OF DR. YOUNG'S EMAIL ON PAGE 3, HE SAYS, "I AM REVIEWING HOW WE COMPARE TO THIS PREDICATE AND THEN MEET WITH HIM AGAIN."
MR. DOWNEY: OKAY. AND THEN IF WE GO BACK TO THE HEADER OF THIS PARTICULAR EMAIL, DO YOU SEE THAT THAT WAS SENT ON AROUND FEBRUARY 21ST IN THE MORNING? I'M SORRY, FEBRUARY 20TH, AT LEAST WITH AN A.M. STAMP?
ELIZABETH A. HOLMES: YES. THE ONE WE HAVE ON THE SCREEN OR THE --
MR. DOWNEY: I'M SORRY. IT'S A P.M.
ELIZABETH A. HOLMES: YES, YES.
MR. DOWNEY: YES. ALL RIGHT. LET ME GO TO THE MIDDLE OF PAGE 1 NOW. AND IF WE CAN BLOW UP FROM THE MIDDLE OF THAT TO THE BOTTOM OF THAT PAGE OF THE EMAIL FROM DR. YOUNG. ALL RIGHT. AND DO YOU SEE THAT DR. YOUNG REPORTS ON A FOLLOW-UP DISCUSSION THAT HE HAD WITH MR. SHULTZ?
MR. DOWNEY: DO YOU SEE THAT? DO YOU SEE THAT HE REPORTS, "HE ACKNOWLEDGED NOW UNDERSTANDING THE CALCULATIONS, SO THE ISSUE IS CLOSED"?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU SEE IN THE SECOND PARAGRAPH HE GOES ON AND REPORTS THAT HE REVIEWED THE APPROACH OF MEETING REQUIREMENTS AND THAT MR. SHULTZ WAS IMPRESSED, ACCORDING TO DR. YOUNG?
MR. DOWNEY: AND THEN IF YOU GO TO THE FOURTH BULLET POINT, ABOUT HALFWAY DOWN THROUGH THAT BULLET POINT, DO YOU SEE THAT DR. YOUNG REPORTED THAT, "OUR OBJECTIVE IS TO OUTPERFORM OTHER LAB SERVICES PROVIDING THESE TESTS IN NATIONAL WAY BY MAINTAINING CONTROL AND MONITORING THE ENTIRE PROCESS. "HE," REFERRING TO MR. SHULTZ, "EXPRESSED UNDERSTANDING THE POWER OF THIS APPROACH, SUCH AS THE ABILITY TO TREND RESULTS OVER TIME."
MR. DOWNEY: AND THEN DO YOU SEE HE GOES ON TO REPORT ABOUT HIS CONVERSATION AND MR. SHULTZ'S RESPONSE DURING THIS SECOND MEETING?
MR. DOWNEY: AND DO YOU SEE THAT IN THE SIXTH BULLET POINT, HE REPORTS THAT MR. SHULTZ HAD RAISED PROFICIENCY TESTING. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND HE HAD RAISED SOME QUESTIONS ABOUT HOW PROFICIENCY TESTING SHOULD BE DONE. DO YOU SEE THAT?
MR. DOWNEY: AND THEN DR. YOUNG REPORTS THAT, "BY THE WAY, THIS GOES AGAINST OUR CLIA STANDARD OPERATING PROCEDURES AS I NOTED IN THE OTHER EMAIL." AND HE GOES ON IN THE LAST SENTENCE BEFORE THE BULLET POINT TO SAY THAT HE HAD EXPLAINED THE PROFICIENCY TESTING POLICY TO MR. SHULTZ. DO YOU SEE THAT?
MR. DOWNEY: OKAY. AND THEN IF YOU GO -- WHAT DID YOU UNDERSTAND AS TO MR. SHULTZ'S CONCERNS AS A RESULT OF THESE TWO EMAILS FROM DR. YOUNG?
ELIZABETH A. HOLMES: I UNDERSTOOD THAT MR. SHULTZ HAD BEEN CONFUSED ABOUT CERTAIN ISSUES AND THAT DR. YOUNG WAS ABLE TO ADEQUATELY GET INTO THOSE CONCERNS WITH HIM AND ALLAY HIS CONCERNS.
MR. DOWNEY: AND IF YOU LOOK AT PAGE 1 OF THE EMAIL, YOU SEE THAT THERE'S AN EMAIL FROM YOU -- I'M SORRY, THE ONE RIGHT BELOW THAT. RIGHT, RIGHT THERE. AND YOU ASK, "DID HE UNDERSTAND THE PT POINT?" AND THAT'S THE COMMENT ON PROFICIENCY TESTING?
MR. DOWNEY: AND RIGHT ABOVE THAT, DO YOU SEE THERE'S A RESPONSE FROM DR. YOUNG?
MR. DOWNEY: AND HE SAYS, "YES, HE WAS AGAIN HAPPY TO UNDERSTAND THAT THERE WAS A SOLID PLAN AND PROCESS IN PLACE (OTHER THAN WHAT HE UNDERSTOOD BEFOREHAND)."
ELIZABETH A. HOLMES: I SEE THAT.
MR. DOWNEY: OKAY. NOW, AFTER DR. YOUNG REPORTED TO YOU IN THIS VEIN, DID MR. SHULTZ SUBSEQUENTLY RAISE CONCERNS WITH YOU AGAIN ABOUT TESTING AT THERANOS?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: AND LET ME ASK YOU TO LOOK AT 7434.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: AND DO YOU SEE THAT THAT'S AN EMAIL FROM MR. SHULTZ TO YOU DISCUSSING THE EARLIER MEETINGS HE HAD HAD WITH DR. YOUNG AND RAISING SOME CONCERNS?
MR. DOWNEY: AND YOU THEN RESPONDED TO THAT EMAIL?
MR. DOWNEY: YOUR HONOR, I'D LIKE TO MOVE THE ADMISSION OF 7434.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7434 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: SO IF WE LOOK AT THE BOTTOM OF PAGE 1, WITHOUT GOING THROUGH THE EMAIL, DO YOU SEE MR. SHULTZ SENT YOU AN EMAIL AND HE TALKS ABOUT HIS MEETINGS WITH DR. YOUNG, AND HE THEN GOES ON TO ADDRESS WHETHER HE THOUGHT THAT MR. YOUNG'S EXPLANATION WAS SUFFICIENT. DO YOU SEE THAT?
MR. DOWNEY: AND THAT WAS ON APRIL 11TH AROUND 3:38. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THEN YOU RESPOND AT ABOUT TWO HOURS LATER. DO YOU SEE THAT?
MR. DOWNEY: AND YOU WROTE THAT, "TYLER: "THESE ARE VERY, VERY SERIOUS COMMENTS AND ALLEGATIONS YOU'RE MAKING. I'M GOING TO HAVE THE TEAMS GO THROUGH THIS LINE BY LINE SO IT WILL TAKE SOME TIME BEFORE I GET BACK TO YOU ON THIS." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DID YOU THEN ASK THE TEAMS TO GO THROUGH MR. SHULTZ'S CONCERNS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: OKAY. AND WHO DID YOU ASK TO DO THAT?
ELIZABETH A. HOLMES: I ASKED DR. YOUNG TO LEAD THAT WORK.
MR. DOWNEY: OKAY. AND DID YOU, DID YOU SEND THE COMMENTS THAT MR. SHULTZ HAD MADE TO DR. YOUNG?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT 1667. IS THIS AN EMAIL BETWEEN YOU AND DR. YOUNG DISCUSSING THE CONCERNS THAT MR. SHULTZ RAISED?
ELIZABETH A. HOLMES: I'M SORRY. WHICH BINDER IS IT IN?
MR. DOWNEY: 1667 SHOULD BE IN THE THIRD VOLUME.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: DO YOU HAVE THAT?
ELIZABETH A. HOLMES: I'VE GOT IT, YEP.
MR. DOWNEY: OKAY.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: MY QUESTION TO YOU WAS, AFTER YOU HAVE A MOMENT TO LOOK AT IT, IS WHETHER THIS IS AN EMAIL EXCHANGE BETWEEN YOU AND DR. YOUNG DISCUSSING THE CONCERNS THAT MR. SHULTZ RAISED IN APRIL OF 2014?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 1667.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 1667 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND IF YOU LOOK AT THE VERY TOP HERE, YOU CAN SEE THAT THIS IS ANOTHER SERIES OF EXCHANGES ABOUT MR. YOUNG'S CONCERNS -- OR MR. SHULTZ'S CONCERNS BETWEEN YOURSELF, DR. YOUNG, AND MR. BALWANI?
MR. DOWNEY: AND THEN IF YOU LOOK AT THE BOTTOM OF THE PAGE, DO YOU SEE THAT THERE'S AN EMAIL FROM YOU TO DR. YOUNG AND YOU ARE SAYING TO HIM, "TAKE A LOOK AT THIS. LET ME KNOW WHERE ALL THIS DATA IS FROM/WHAT THE DATA IS, WHETHER YOU HAD EXCHANGES WITH HIM IN WHICH HE FORWARDED MARKETING ARTICLES, AND ALSO COMMENTS LINE BY LINE ON THE BELOW." AND IF YOU LOOK BELOW, YOU SEEM TO HAVE FORWARDED MR. SHULTZ'S EMAIL TO DR. YOUNG; IS THAT RIGHT?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND DID DR. YOUNG THEN RESPOND AND ADDRESS THE CONCERNS THAT MR. SHULTZ WAS RAISING?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: LET'S LOOK AT THE NEXT EMAIL UP. DO YOU SEE THAT DR. YOUNG SAYS "MY COMMENTS ARE IN RED. PLEASE LET ME KNOW IF YOU HAVE ANY FURTHER THOUGHTS OR WANT TO DISCUSS ANY OF THIS." DO YOU SEE THAT?
MR. DOWNEY: AND THEN IF YOU GO UP TO THE TOP OF THE PAGE, DO YOU SEE THAT DR. YOUNG AGAIN EMAILS AND HE SAYS, "I WANTED TO MENTION AGAIN THAT TYLER'S CONCERN ABOUT PT WAS RAISED RIGHT AFTER WE LEARNED THAT CLIA HAD SPLIT THE ACTUAL PT SAMPLE THEY HAD RECEIVED." AND THEN HE GOES ON TO SAY, "AS I HAD EXPLAINED TO TYLER, THIS WAS THE WRONG THING TO DO." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DID YOU UNDERSTAND THAT DR. YOUNG WAS SATISFIED THAT HE HAD ADDRESSED THE CONCERNS THAT MR. SHULTZ HAD RAISED AS TO PROFICIENCY TESTING?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WERE YOU SATISFIED TO ACCEPT DR. YOUNG'S EXPLANATION?
ELIZABETH A. HOLMES: I WAS.
MR. DOWNEY: AND WHY WERE YOU WILLING TO ACCEPT DR. YOUNG'S EXPLANATION?
ELIZABETH A. HOLMES: BECAUSE I UNDERSTOOD THAT HE HAD STUDIED THE REGULATIONS, WORKED WITH OUR REGULATORY PERSONS TO MAKE SURE THIS WAS UNDERSTOOD PROPERLY, WORKED WITH DR. ROSENDORFF AND LABORATORY LEADERSHIP, AND THAT THEY WERE ALL ALIGNED ON DR. YOUNG'S EXPLANATION.
MR. DOWNEY: OKAY. LET'S TURN BACK FOR A MOMENT TO DISCUSSING DR. ROSENDORFF. DO YOU RECALL THE TESTIMONY EARLIER IN THE CASE THAT DR. ROSENDORFF DEPARTED IN NOVEMBER OF 2014?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DURING THE PERIOD THAT HE WAS SERVING AS THE LAB DIRECTOR, HOW OFTEN DID YOU INTERACT ONE ON ONE WITH DR. ROSENDORFF?
ELIZABETH A. HOLMES: ON OCCASION. WHENEVER HE WANTED OR NEEDED TO MEET WITH ME.
MR. DOWNEY: TO WHOM DID DR. ROSENDORFF DIRECTLY REPORT?
ELIZABETH A. HOLMES: TO SUNNY BALWANI.
MR. DOWNEY: DID YOU HAVE A CHANCE ON SOME OCCASIONS TO OBSERVE THE WORKING RELATIONSHIP BETWEEN MR. BALWANI AND DR. ROSENDORFF?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: WHAT DID YOU OBSERVE?
ELIZABETH A. HOLMES: THAT THERE WAS FRUSTRATION IN THAT RELATIONSHIP.
MR. DOWNEY: DID YOU ALSO HAVE OCCASION TO INTERACT IN THE RELATIONSHIP BETWEEN -- OR TO OBSERVE INTERACTIONS BETWEEN DR. ROSENDORFF AND DR. YOUNG?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WHAT WERE YOUR OBSERVATIONS AS TO THE NATURE OF THAT RELATIONSHIP?
ELIZABETH A. HOLMES: THAT THEY WOULD OFTEN DISAGREE BEFORE COMING TO A DECISION TOGETHER.
MR. DOWNEY: OKAY. DID THERE COME A TIME WHEN DR. ROSENDORFF TOLD YOU THAT HE WAS GOING TO LEAVE THERANOS?
MR. DOWNEY: AND WHEN WAS THAT?
ELIZABETH A. HOLMES: AT THE END OF 2014.
MR. DOWNEY: WHAT DO YOU RECALL ABOUT HIM TELLING YOU HE WAS GOING TO LEAVE THERANOS?
ELIZABETH A. HOLMES: THAT HE HAD ANOTHER JOB THAT HE WANTED TO TAKE AND THAT HE WANTED TO TRANSITION OUT AS FAST AS HE COULD TO BE ABLE TO START AT THAT NEW COMPANY.
MR. DOWNEY: AND DID HE TELL THAT TO BOTH YOU AND MR. BALWANI?
MR. DOWNEY: HOW DID MR. BALWANI REACT TO DR. ROSENDORFF'S STATEMENT THAT HE INTENDED TO RESIGN?
ELIZABETH A. HOLMES: HE ASKED US TO GIVE HIM THE THREE MONTHS THAT HAD BEEN AGREED UPON IN HIS EMPLOYMENT CONTRACT BEFORE LEAVING.
MR. DOWNEY: AND DID DR. ROSENDORFF CONTINUE TO SERVE AS THE CLINICAL LABORATORY DIRECTOR AFTER HE GAVE THAT NOTICE THAT HE INTENDED TO LEAVE?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: AND WHAT, IF ANY, OBSERVATIONS DID YOU HAVE OF HIS BEHAVIOR AFTER HE HAD GIVEN NOTICE THAT HE HAD INTENDED TO DEPART?
ELIZABETH A. HOLMES: IT WAS VERY DIFFERENT THAN HOW HE HAD BEHAVED BEFOREHAND, AND HE WAS INCREASINGLY AGITATED IN ASKING TO BE ABLE TO LEAVE.
MR. DOWNEY: AND DO YOU RECALL THAT DURING THE COURSE OF THE TRIAL DR. ROSENDORFF TESTIFIED THAT HE HAD SENT YOU AN EMAIL THAT HE WAS UNCOMFORTABLE IN HIS ROLE AS LABORATORY DIRECTOR?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: WHAT WAS YOUR REACTION TO RECEIVING THAT EMAIL?
ELIZABETH A. HOLMES: I WAS REALLY TAKEN ABACK BECAUSE HE HAD NOT RAISED WITH ME THE CONCERNS THAT HE WAS IDENTIFYING IN THAT EMAIL, AND I HAD TRIED TO MAKE IT REALLY CLEAR TO HIM THAT ANYTHING THAT HE NEEDED TO DO OR NEEDED IN TERMS OF RESOURCES OR OTHERWISE TO BE ABLE TO RUN THE LAB IN THE BEST WAY POSSIBLE I WANTED TO MAKE AVAILABLE FOR HIM.
MR. DOWNEY: DID DR. ROSENDORFF EVER TELL YOU THAT HIS RESIGNATION WAS RELATED TO THERANOS REFUSING TO IMPLEMENT PROFICIENCY TESTING FOR ITS PROPRIETARY TESTS?
MR. DOWNEY: DID DR. ROSENDORFF EVER TELL YOU THAT HIS RESIGNATION WAS RELATED TO HIM BEING DENIED RESOURCES THAT HE NEEDED TO RUN THE CLINICAL LABORATORY?
MR. DOWNEY: WERE YOU, AS THE CEO OF THE COMPANY, WERE YOU PREPARED FOR DR. ROSENDORFF'S DEPARTURE AT THE TIME THAT HE DEPARTED?
MR. DOWNEY: HOW DID THE COMPANY REACT TO THE DEPARTURE OF DR. ROSENDORFF?
ELIZABETH A. HOLMES: WE WENT BACK TO DR. HURST AND ASKED HIM TO GET INVOLVED WITH THE COMPANY AGAIN. SUNNY BALWANI SAID THAT HE WAS GOING TO START SPENDING A VERY SIGNIFICANT AMOUNT OF HIS TIME AT NEWARK TO DIG INTO WHAT ISSUES EXISTED AND TO FIX THEM GOING FORWARD.
MR. DOWNEY: AND DID MR. BALWANI SUBSEQUENTLY REPORT TO YOU THAT HE WAS SPENDING TIME IN THE CLIA LAB AND DIGGING INTO ISSUES?
ELIZABETH A. HOLMES: HE WAS, YES.
MR. DOWNEY: YOUR HONOR, IN CONNECTION WITH EXHIBIT 5387, THIS IS THE TEXT MESSAGES THAT WE'VE ADMITTED BIT BY BIT. THIS WOULD BE 5387E.
MR. DOWNEY: I'LL JUST ASK YOU TO LOOK AT THAT IN THE THIRD VOLUME OF THE BINDER THAT YOU HAVE, MS. HOLMES.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: OKAY. IS THIS A SERIES OF TEXT MESSAGES BETWEEN YOU AND MR. BALWANI IN NOVEMBER OF 2014?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 5387E.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5387E WAS RECEIVED IN EVIDENCE.)
MR. DOWNEY: AND IF YOU WOULD JUST DISPLAY THIS.
MR. DOWNEY: NOW, DR. ROSENDORFF LEFT AROUND NOVEMBER 20TH OR SO. DO YOU RECALL THAT?
MR. DOWNEY: AND DO YOU SEE THAT THIS IS A TEXT FROM MR. BALWANI TO YOU ON NOVEMBER 25TH?
MR. DOWNEY: AND DO YOU SEE THAT HE'S "HEADING OUT TO NEWARK. LOVE"?
MR. DOWNEY: AND IN THE NEXT EMAIL, NEXT TEXT HE REPORTS, "I'M ON MY WAY TO NEWARK. OFFICE IS YOURS"?
MR. DOWNEY: AND THE NEWARK FACILITY, WAS THAT THE FACILITY THAT HAD THE CLINICAL LAB?
ELIZABETH A. HOLMES: IT WAS.
MR. DOWNEY: AND THAT WAS SEPARATE FROM THERANOS'S HEADQUARTERS?
MR. DOWNEY: AND TO THIS POINT, MR. BALWANI HAD LARGELY WORKED IN THERANOS'S HEADQUARTERS OR HAD HE WORKED IN BOTH LOCATIONS?
ELIZABETH A. HOLMES: HE WORKED IN BOTH LOCATIONS, BUT HE WAS MOSTLY IN THERANOS'S HEADQUARTERS.
MR. DOWNEY: OKAY. AND AFTER MR. BALWANI SPENT TIME AT THE LAB IN NEWARK, DO YOU RECALL RECEIVING REPORTS FROM HIM AS TO HIS PERCEPTION OF WHAT THE CONDITION OF THE LAB WAS?
MR. DOWNEY: LET ME ASK YOU TO LOOK AT 5387B, WHICH IS ALREADY IN EVIDENCE. ALL RIGHT. IF WE CAN JUST BLOW THIS UP SO IT'S A LITTLE MORE VISIBLE. ALL RIGHT. DO YOU SEE THAT HE REPORTS, "NORMANDY LAB IS A F'ING DISASTER ZONE. GLAD I CAME HERE. WILL WORK ON FIXING THIS." DO YOU SEE THAT?
MR. DOWNEY: AND THEN A FEW LINES DOWN HE SAYS, "IN NORMANDY. WILL CALL WHEN I LEAVE." DO YOU SEE THAT?
MR. DOWNEY: AND THEN HE GOES DOWN TOWARDS THE BOTTOM AND SAYS, "WE BUILT SOFTWARE TO REMOVE HUMAN ERROR AND HUMAN JUDGEMENT. ALL DAY I SAW THESE PEOPLE USE THEIR JUDGMENTS TO WORK AROUND OUR PROCESSES." DO YOU SEE THAT?
MR. DOWNEY: AND DID, IN ADDITION TO THESE TEXTS, DID MR. BALWANI ALSO REPORT TO YOU ORALLY ON HIS OBSERVATIONS OF THE LAB AT THAT TIME?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: AND WHAT WAS HIS REPORT?
ELIZABETH A. HOLMES: HIS REPORT WAS THAT HE FELT THE LABORATORY WAS POORLY MANAGED AND THAT HE WAS MAKING SURE THAT IT WOULD BE PROPERLY MANAGED AND PEOPLE WOULD FOLLOW THE PROCEDURES THAT WE HAD IN PLACE.
MR. DOWNEY: DID THERANOS SUBSEQUENTLY HIRE A LABORATORY DIRECTOR TO REPLACE DR. ROSENDORFF?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: AND WHO WAS THAT?
ELIZABETH A. HOLMES: WE HIRED DR. SAWYER AND DR. DHAWAN.
MR. DOWNEY: AND DID YOU HAVE CONVERSATIONS ABOUT DR. DHAWAN AND DR. SAWYER WITH MR. BALWANI?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WHAT DID HE TELL YOU ABOUT DR. DHAWAN AND DR. SAWYER?
ELIZABETH A. HOLMES: HE SAID THAT THEY WOULD BE SERVING TEMPORARILY BECAUSE WE HAD A CANDIDATE INTERNALLY WHO WOULD TAKE OVER THE LAB DIRECTOR POSITION FORMALLY AS SOON AS HIS CERTIFICATIONS WERE ISSUED.
MR. DOWNEY: AND WHO WAS THAT?
ELIZABETH A. HOLMES: DR. SAKSENA.
MR. DOWNEY: AND DID HE OFFER REFLECTIONS ON DR. SAKSENA'S QUALIFICATIONS TO SERVE AS LAB DIRECTOR?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: WHAT DID HE SAY?
ELIZABETH A. HOLMES: HE SAID THAT DR. SAKSENA WAS QUALIFIED, AND THAT HE HAD NOW SEVERAL YEARS OF WORKING IN THE CLIA LAB AND NEEDED PAPERWORK TO BE ABLE TO OFFICIALLY ASSUME THE ROLE, BUT THAT HE WAS ALREADY ACTING EFFECTIVELY IN THAT CAPACITY.
MR. DOWNEY: AND DID YOU UNDERSTAND THAT DR. SAWYER WORKED WITH JERRY HURST, WHO WAS YOUR CONSULTANT?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND HOW -- WHAT WERE YOUR EXPECTATIONS AS TO HOW LONG DR. DHAWAN AND DR. SAWYER WOULD SERVE IN THEIR ROLES WHEN THEY WERE HIRED AS LABORATORY DIRECTOR?
ELIZABETH A. HOLMES: A VERY SHORT PERIOD OF TIME.
MR. DOWNEY: DID YOU PLAY ANY ROLE IN THEIR SELECTION AS LABORATORY DIRECTOR?
ELIZABETH A. HOLMES: I DID NOT.
MR. DOWNEY: LET ME ASK YOU LAST ABOUT THE DECISION TO -- MADE WITHIN THE CLIA LABORATORY TO REMOVE CERTAIN TESTS FROM BEING TESTED ON THE THERANOS 3.5 DEVICES. DO YOU RECALL THAT TESTIMONY?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: SO WAS THERE A PERIOD DURING THE OPERATION OF THE CLINICAL LAB WHERE TESTS WOULD BE EVALUATED ON THE 3.5 DEVICES?
MR. DOWNEY: AND OVER TIME WERE SOME OF THOSE TESTS REMOVED FROM BEING ANALYZED ON THE 3.5 DEVICES AND ANALYZED USING A DIFFERENT ANALYZER?
MR. DOWNEY: DID YOU OCCASIONALLY RECEIVE INPUT OR GUIDANCE FROM SCIENTISTS AS TO THE PERFORMANCE OF THOSE TESTS IN THE CLINICAL LAB?
ELIZABETH A. HOLMES: I RECEIVED COMMENTARY ABOUT IT, YES.
MR. DOWNEY: OKAY. AND DID THAT INCLUDE FROM DR. YOUNG?
MR. DOWNEY: AND DR. PANGARKAR?
ELIZABETH A. HOLMES: IT DID.
MR. DOWNEY: AND DR. SIVARAMAN?
MR. DOWNEY: AND DR. PATEL?
MR. DOWNEY: AND DR. SAKSENA?
MR. DOWNEY: AND DID YOU VIEW IT AS APPROPRIATE FOR THEM TO ADVISE ON WHAT SHOULD BE DONE WITH RESPECT TO THE 3.5 DEVICE, THE TESTS BEING OPERATED ON IT?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: DID ANY OF THESE SCIENTISTS EXPRESS ANY CONCERNS TO YOU THAT THERANOS'S TESTS WEREN'T SUFFICIENTLY RELIABLE TO OFFER IT TO PATIENTS?
MR. DOWNEY: DID THEY EXPRESS ANY CONCERN THAT THERANOS'S TESTS WERE NOT SUFFICIENTLY ACCURATE TO BE OFFERED TO PATIENTS?
MR. DOWNEY: WERE YOU INVOLVED IN THE DECISION TO REMOVE TESTS FROM THE 3.5 SERIES DEVICE?
ELIZABETH A. HOLMES: I DID NOT MAKE THAT DECISION.
MR. DOWNEY: AND DO YOU KNOW WHY THAT DECISION WAS MADE?
ELIZABETH A. HOLMES: I DON'T IN ALL CASES. I KNEW GENERALLY THAT THE LABORATORY LEADERSHIP WAS EVALUATING THE TESTS AND MAKING DECISIONS ABOUT WHAT TESTS WERE LIVE AND WHAT PLATFORM AT ANY GIVEN POINT IN TIME.
MR. DOWNEY: YOUR HONOR, THIS MIGHT BE A GOOD TIME FOR OUR BREAK IF IT SUITS THE COURT.
JUDGE DAVILA: ALL RIGHT. WE'LL TAKE A BREAK NOW. WILL 30 MINUTES DO, MR. DOWNEY?
MR. DOWNEY: THAT WILL BE FINE. THANK YOU, YOUR HONOR.
JUDGE DAVILA: LET'S TAKE 30 MINUTES NOW, LADIES AND GENTLEMEN, 30 MINUTES.
(RECESS FROM 1:16 P.M. UNTIL 1:56 P.M.)
JUDGE DAVILA: THANK YOU. WE'RE BACK ON THE RECORD. ALL PARTIES PREVIOUSLY PRESENT ARE PRESENT ONCE AGAIN. MR. DOWNEY, YOU'D LIKE TO CONTINUE?
MR. DOWNEY: YES, SIR.
MR. DOWNEY: MS. HOLMES, EARLIER TODAY, DO YOU RECALL TALKING ABOUT THE 2011 AND 2013 CMS AUDITS AT THERANOS?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: DID CMS PERFORM ANOTHER INSPECTION OF THERANOS IN THE FALL OF 2015?
MR. DOWNEY: DID THERANOS EXPECT THAT THERE WOULD BE AN INSPECTION THEN?
ELIZABETH A. HOLMES: WE KNEW GENERALLY THAT THERE WAS A TWO YEAR INSPECTION COMING UP.
MR. DOWNEY: DID THERANOS TAKE STEPS TO PREPARE FOR THAT INSPECTION IN 2015?
MR. DOWNEY: WHAT, TO YOUR KNOWLEDGE, DID THERANOS DO?
ELIZABETH A. HOLMES: WE ASKED DR. HURST TO COME IN AND MAKE SURE THAT WE WERE READY FOR THE INSPECTION AND WORK WITH OUR TEAMS ON CONDUCTING MOCK AUDITS.
MR. DOWNEY: PRIOR TO THE TIME OF THE INSPECTION, DID MR. BALWANI COMMUNICATE TO YOU WHAT HE EXPECTED THE RESULTS OF THE INSPECTION WOULD BE?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: WHAT DID HE SAY?
ELIZABETH A. HOLMES: THAT THE LAB WAS IN GREAT SHAPE AND THAT THERE WAS -- THE AUDIT SHOULD GO VERY WELL.
MR. DOWNEY: NOW, DID AN INSPECTION OF THERANOS COMMENCE AFTER ALL OF THOSE PREPARATIONS?
MR. DOWNEY: AND WERE YOU INVOLVED IN INTERACTING WITH PERSONNEL FROM CMS DURING THAT INSPECTION?
ELIZABETH A. HOLMES: I WAS.
MR. DOWNEY: AND WHAT DO YOU RECALL ABOUT THAT INSPECTION?
ELIZABETH A. HOLMES: THAT INSPECTORS HAD COME TO VISIT THERANOS SOMETIME I THINK IN SEPTEMBER OF 2015 AND THAT OUR TEAM HAD EXPRESSED THAT THERE WERE CONCERNS, SO I SAT IN THE BACK OF THE ROOM DURING THE SECOND PART OF THAT INSPECTION, WHICH WAS LATER IN NOVEMBER OF 2015, TO TRY TO OBSERVE IT.
MR. DOWNEY: OKAY. LET'S TAKE IT IN STAGES. DID YOU PARTICIPATE WHEN -- AT ALL IN INTERACTIONS WITH CMS WHEN THE INSPECTION WAS CONDUCTED IN SEPTEMBER?
ELIZABETH A. HOLMES: I DID NOT.
MR. DOWNEY: DID YOU RECEIVE REPORTS ABOUT HOW THAT INSPECTION HAD GONE?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: WHAT DID YOU LEARN AS A RESULT OF THE REPORTS?
ELIZABETH A. HOLMES: THAT IT WAS NOT AS WE HAD EXPECTED AND THAT THE INVESTIGATORS SEEMED TO BE IDENTIFYING A NUMBER OF ISSUES THAT WERE UNEXPECTED.
MR. DOWNEY: AND YOU SAY THAT WAS IN SEPTEMBER OF 2015?
MR. DOWNEY: WAS IT ABOUT A MONTH AFTER THAT INSPECTION THAT THERANOS BEGAN TO RECEIVE CONSIDERABLE NEGATIVE MEDIA COVERAGE?
MR. DOWNEY: AND WHAT DO YOU RECALL HAPPENING IN THAT REGARD?
ELIZABETH A. HOLMES: AN ARTICLE WAS PUBLISHED THAT WAS VERY NEGATIVE ABOUT THERANOS, AND CONTINUED ARTICLES WERE PUBLISHED IMMEDIATELY FOLLOWING IT THAT WERE ATTRACTING A LOT OF ATTENTION.
MR. DOWNEY: PRIOR TO THE TIME THERANOS -- PRIOR TO THE TIME THE ARTICLE ABOUT THERANOS WAS PUBLISHED, DID THERANOS KNOW THERE WAS GOING TO BE AN ARTICLE THAT WOULD RUN?
MR. DOWNEY: AND HOW DID THERANOS RESPOND TO THE KNOWLEDGE THAT THE ARTICLE WAS GOING TO RUN?
ELIZABETH A. HOLMES: WE BEGAN INTERACTING WITH THE PUBLISHER OVER THE COURSE OF SEVERAL MONTHS.
MR. DOWNEY: AND DID YOU DEVELOP CONCERNS ABOUT WHAT YOU UNDERSTOOD WOULD BE REPORTED?
MR. DOWNEY: AND HOW DID YOU REACT -- WHAT CONCERNS SPECIFICALLY DID YOU DEVELOP?
ELIZABETH A. HOLMES: PRIMARILY THAT WE UNDERSTOOD THAT TRADE SECRETS THAT WE HAD BEEN TRYING TO PROTECT HAD BEEN DISCLOSED AND COULD BE DISCLOSED THROUGH THIS PIECE.
MR. DOWNEY: AND DID YOU TAKE STEPS TO REACT IN RESPONSE TO THAT?
MR. DOWNEY: AND WOULD YOU CHARACTERIZE THE STEPS THAT YOU TOOK IN RESPONSE AS AGGRESSIVE?
MR. DOWNEY: SITTING HERE TODAY, WOULD YOU HAVE HANDLED THE RESPONSE TO THAT DIFFERENTLY?
ELIZABETH A. HOLMES: VERY MUCH SO.
MR. DOWNEY: AND HOW SO?
ELIZABETH A. HOLMES: I THINK WE WERE TOO AGGRESSIVE. I THINK WE WERE SO FOCUSSED ON TRYING TO PROTECT THESE INVENTIONS AND TRADE SECRETS THAT WE LOST SIGHT OF THE BIG PICTURE, AND IN TRYING TO PROTECT THE TRADE SECRETS CREATED ALL SORTS OF IMPRESSIONS ABOUT THERANOS THAT WERE INCORRECT.
MR. DOWNEY: DID YOU -- YOU MENTIONED THAT THERE HAD BEEN A CMS INSPECTION IN SEPTEMBER?
MR. DOWNEY: AND THEN DID THE ARTICLE RUN IN OCTOBER?
MR. DOWNEY: AND THEN WAS THE FOLLOWUP TO THE CMS INSPECTION IN NOVEMBER?
MR. DOWNEY: AND I THINK YOU TESTIFIED THAT YOU DID PARTICIPATE DURING SOME OF THE MEETINGS THAT TOOK PLACE WITH CMS PERSONNEL DURING THAT NOVEMBER PORTION OF THE INSPECTION?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WAS YOUR ROLE PRINCIPALLY TO OBSERVE OR WERE YOU INTERACTING WITH THE INSPECTORS?
ELIZABETH A. HOLMES: I WAS OBSERVING.
MR. DOWNEY: AND WHAT DO YOU RECALL OBSERVING DURING THE COURSE OF THAT INSPECTION?
ELIZABETH A. HOLMES: I REMEMBER OUR TEAM BEING UNABLE TO PRODUCE DOCUMENTS THAT THE INSPECTORS WERE ASKING FOR AND BEING SURPRISED AND FRUSTRATED THAT WE WERE NOT ABLE TO SHOW THE DOCUMENTATION THAT WAS BEING DISCUSSED.
MR. DOWNEY: AND DID YOU -- DID THERANOS GET FEEDBACK FROM THE INSPECTORS DURING THE COURSE OF THAT NOVEMBER INSPECTION OR SHORTLY AFTER?
MR. DOWNEY: AND DID YOU COME TO LEARN WHAT THAT FEEDBACK WAS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WHAT DID YOU LEARN THE FEEDBACK WAS?
ELIZABETH A. HOLMES: THAT THE INSPECTORS HAD CONCERNS, AND THEY HAD CONCERNS ABOUT OUR DOCUMENTATION, OR LACK OF DOCUMENTATION; THEY HAD CONCERNS ABOUT SOME OF THE PEOPLE IN OUR LABORATORY.
MR. DOWNEY: AND HOW DID WHAT YOU UNDERSTOOD ABOUT THEIR FEEDBACK COMPARE TO WHAT MR. BALWANI HAD TOLD YOU IN SEPTEMBER AS TO HIS EXPECTATIONS?
ELIZABETH A. HOLMES: IT WAS COMPLETELY DIFFERENT.
MR. DOWNEY: LET'S TALK FOR A LITTLE BIT ABOUT MR. BALWANI'S ROLE AT THERANOS. WHEN DID MR. BALWANI START WORKING AT THERANOS?
ELIZABETH A. HOLMES: IN 2009.
MR. DOWNEY: AND WHEN DID MR. BALWANI LEAVE THERANOS?
ELIZABETH A. HOLMES: IN 2016.
MR. DOWNEY: NOW, YOU RECALL DURING THE COURSE OF THE GOVERNMENT'S CASE THAT THEY ASKED SOME WITNESSES, INCLUDING MR. EDLIN, IF YOU WERE IN A ROMANTIC RELATIONSHIP WITH MR. BALWANI. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU RECALL THAT SEPARATE WITNESSES WERE ASKED WHETHER MR. BALWANI DEFERRED TO YOU IN CERTAIN CONTEXTS? DO YOU RECALL THAT?
MR. DOWNEY: WAS IT YOUR EXPERIENCE THAT MR. BALWANI DEFERRED TO YOU IN ALL CONTEXTS?
MR. DOWNEY: WHEN DID YOU FIRST MEET MR. BALWANI?
ELIZABETH A. HOLMES: RIGHT AFTER I GRADUATED HIGH SCHOOL.
MR. DOWNEY: AND WHERE DID YOU MEET HIM?
ELIZABETH A. HOLMES: IN CHINA.
MR. DOWNEY: HOW OLD WERE YOU AT THE TIME?
ELIZABETH A. HOLMES: I WAS 18.
MR. DOWNEY: AND HOW OLD WAS HE?
ELIZABETH A. HOLMES: HE WAS 38.
MR. DOWNEY: WHAT DID YOU UNDERSTAND ABOUT MR. BALWANI'S BACKGROUND WHEN YOU MET HIM?
ELIZABETH A. HOLMES: I UNDERSTOOD THAT HE HAD BEEN A REALLY SUCCESSFUL BUSINESS PERSON, THAT HE HAD WORKED WITH BILL GATES IN THE EARLY DAYS OF MICROSOFT, BUILT A SUCCESSFUL COMPANY WHICH HE SOLD TO BIG COMPANIES.
MR. DOWNEY: AND DID YOU INTERACT WITH HIM SOME DURING THE COURSE OF THAT SUMMER AFTER YOUR SENIOR YEAR IN HIGH SCHOOL?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: TELL US WHAT THOSE INTERACTIONS WERE LIKE.
ELIZABETH A. HOLMES: I TALKED TO HIM ABOUT WANTING TO START A COMPANY, A COMPANY THAT I TRIED TO BUILD IN HIGH SCHOOL, AND ASKED FOR HIS ADVICE.
MR. DOWNEY: AND AFTER THAT SUMMER, DID YOU START YOUR FRESHMAN YEAR AT STANFORD?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND DURING THE COURSE OF THE -- YOUR FRESHMAN YEAR AT STANFORD, DID YOU HAVE ANY OCCASION TO BE IN CONTACT WITH MR. BALWANI?
MR. DOWNEY: WAS -- WAS THAT BY EMAIL OR BY SOME OTHER MEANS?
ELIZABETH A. HOLMES: YES, HE WOULD EMAIL ME OVER THE COURSE OF THE YEAR.
MR. DOWNEY: OKAY. NOW, WE SPOKE AT THE OUTSET OF YOUR TESTIMONY ABOUT YOUR TIME AT STANFORD AND YOUR WORK WITH DR. ROBERTSON. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND I ASKED YOU, WHEN YOU TESTIFIED THAT YOU LEFT STANFORD DURING YOUR SOPHOMORE YEAR, WHETHER PURSUIT OF YOUR BUSINESS WAS THE REASON THAT YOU LEFT STANFORD. DO YOU RECALL?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU RECALL THAT YOU SAID THAT THAT WAS ONE OF THE REASONS?
MR. DOWNEY: AND WHAT WERE THE OTHER REASONS THAT YOU HAD DEPARTED STANFORD?
ELIZABETH A. HOLMES: I WAS RAPED WHEN I WAS AT STANFORD, AND I DECIDED TO LEAVE TO POUR MYSELF INTO BUILDING THERANOS.
MR. DOWNEY: AND CAN YOU TELL US WHAT EXPERIENCE -- WHAT EFFECT THAT EXPERIENCE THAT YOU SUFFERED THERE HAD ON YOUR ATTITUDE TOWARDS BEING A CONTINUED STUDENT AT STANFORD?
ELIZABETH A. HOLMES: YES. I, I WASN'T GOING TO CLASS, AND I WAS QUESTIONING WHAT -- HOW I WAS GOING TO BE ABLE TO PROCESS THAT EXPERIENCE AND WHAT I WANTED TO DO WITH MY LIFE, AND I DECIDED THAT I WAS GOING TO BUILD A LIFE BY BUILDING THIS COMPANY.
MR. DOWNEY: OKAY. AROUND THE TIME THAT YOU WERE DEPARTING FROM STANFORD, DID YOU COME INTO CLOSER CONTACT WITH MR. BALWANI?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND DURING THAT PERIOD, DID YOU SPEAK WITH MR. BALWANI ABOUT YOUR ASPIRATIONS TO BUILD A BUSINESS OUT OF THE PATENT APPLICATION THAT YOU FILED?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND DID HE OFFER ASSISTANCE TO YOU IN CONNECTION WITH THAT?
MR. DOWNEY: AND AT SOME POINT DURING THE COURSE OF THOSE CONVERSATIONS WITH HIM, DID YOU FORM AN INTIMATE RELATIONSHIP WITH MR. BALWANI?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND DID YOU DISCUSS THE TRAUMA THAT YOU'D EXPERIENCED AT STANFORD AS PART OF YOUR INTERACTIONS WITH MR. BALWANI?
MR. DOWNEY: AND DO YOU RECALL WHAT MR. BALWANI SAID IN REACTION TO THAT?
MR. DOWNEY: AND WHAT DID HE SAY?
ELIZABETH A. HOLMES: HE SAID THAT I WAS SAFE NOW THAT I HAD MET HIM.
MR. DOWNEY: AT SOME POINT AFTER YOU AND MR. BALWANI BECAME INVOLVED WITH EACH OTHER, DID YOU LIVE WITH MR. BALWANI?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WHEN WAS THAT?
ELIZABETH A. HOLMES: STARTING IN 2005 THROUGH 2016.
MR. DOWNEY: NOW, YOU TESTIFIED THAT MR. BALWANI BEGAN WORKING AT THERANOS IN 2009.
MR. DOWNEY: SO THAT WAS SOME PERIOD OF YEARS AFTER YOU AND HE HAD BECOME INVOLVED?
MR. DOWNEY: BUT DURING THE PERIOD PRIOR TO HIS WORK AT THERANOS, DID YOU HAVE CONVERSATIONS ABOUT THE DEVELOPMENT OF THE BUSINESS AT THERANOS?
MR. DOWNEY: AND DID HE GIVE YOU HIS REFLECTIONS ON WHETHER HE THOUGHT YOU HAD THE TALENTS TO SUCCEED AS THE EXECUTIVE IN A COMPANY LIKE THERANOS THAT YOU WERE TRYING TO BUILD AND DEVELOP?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: WHAT DID HE TELL YOU?
ELIZABETH A. HOLMES: HE TOLD ME THAT I DIDN'T KNOW WHAT I WAS DOING IN BUSINESS, THAT MY CONVICTIONS WERE WRONG, THAT HE WAS ASTONISHED AT MY MEDIOCRITY, AND THAT IF I FOLLOWED MY INSTINCTS I WAS GOING TO FAIL, AND THAT I NEEDED TO KILL THE PERSON THAT I WAS TO BECOME WHAT HE WOULD CALL A NEW ELIZABETH WHO COULD BE A SUCCESSFUL ENTREPRENEUR.
MR. DOWNEY: AND DID HE OFFER THOSE REFLECTIONS TO YOU ORALLY?
MR. DOWNEY: AND SOMETIMES IN WRITING?
MR. DOWNEY: AND AMONG WHAT HE SAID TO YOU, DID HE TELL YOU HOW YOU SHOULD SPEND YOUR TIME TO BECOME A SUCCESSFUL EXECUTIVE?
ELIZABETH A. HOLMES: HE DID. HE WAS VERY DESCRIPTIVE.
MR. DOWNEY: AND WHAT DID HE SAY HOW YOU SHOULD SPEND YOUR TIME?
ELIZABETH A. HOLMES: HE SAID IF I WANTED TO BE A GOOD ENTREPRENEUR, I NEEDED TO SPEND ALL OF MY TIME ON THE BUSINESS, AND THAT I SHOULD ONLY BE SPENDING TIME WITH PEOPLE WHO COULD HELP THE BUSINESS TO BE SUCCESSFUL; THAT I NEEDED TO BE WORKING SEVEN DAYS A WEEK, I NEEDED TO BE IN THE OFFICE SEVEN DAYS A WEEK; AND I NEEDED TO BE ONLY DOING THINGS THAT COULD CONTRIBUTE TO MAKING THE COMPANY SUCCESSFUL, WHICH MEANT NOT SLEEPING VERY MUCH, EATING ONLY FOODS THAT WOULD MAKE ME PURE OR ABLE TO HAVE THE MOST ENERGY POSSIBLE FOR THE COMPANY; HAVING A VERY DISCIPLINED AND INTENSE LIFESTYLE.
MR. DOWNEY: AND ON SOME OCCASIONS DID HE PROVIDE YOU WITH WRITTEN MATERIALS SO THAT YOU WOULD BE ABLE TO UNDERSTAND WHAT HE WAS TELLING YOU WOULD MAKE YOU SUCCESSFUL?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 7734. THAT SHOULD BE IN THE SMALLER THINNER NOTEBOOK.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: DO YOU RECOGNIZE THE -- DO YOU SEE THAT IT'S A HANDWRITTEN DOCUMENT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: DO YOU RECOGNIZE THE HANDWRITING THAT IS REFLECTED IN EXHIBIT 7734?
MR. DOWNEY: WHOSE HANDWRITING IS IT?
ELIZABETH A. HOLMES: IT'S SUNNY'S.
MR. DOWNEY: IS THIS A SET OF NOTES THAT MR. BALWANI GAVE YOU AT SOME POINT IN THE PERIOD BETWEEN 2005 AND 2009?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 7734.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7734 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: I WANT TO DIRECT YOUR ATTENTION FIRST TO THE TOP OF PAGE 1. DO YOU SEE THAT THE -- IN THESE NOTES IT'S LABELLED "NON-NEGOTIABLES (PEOPLE)". DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND HE BEGINS BY SAYING, EVERY MORNING. I WILL FORCE MYSELF OUT OF BED AND SPEND 30 MINUTES TO WRITE WHAT I WANT FROM MY DAY. DO YOU SEE THAT?
MR. DOWNEY: AND THEN IN THE BOTTOM RIGHT THERE'S A LITTLE BIT OF A QUADRANT. DO YOU SEE THAT?
MR. DOWNEY: AND CAN YOU EXPLAIN WHAT THAT -- WHAT YOU UNDERSTOOD THAT MEANT?
ELIZABETH A. HOLMES: THIS WAS SUNNY DESCRIBING WHERE A GOOD LEADER SHOULD SPEND THEIR TIME, AND HE'S SAYING THAT THE BEST LEADERS ALWAYS SPEND THEIR TIME IN WHAT HE LABELLED QUADRANT 2, WHICH IS ON IMPORTANT BUT NOT URGENT THINGS, MEANING FOCUSSING ON THE VISION AND THE BIG PICTURE.
MR. DOWNEY: AND IF YOU GO TO THE NEXT PARAGRAPH, IT BEGINS, "I WILL NEVER MEET WITH ANYONE FOR MORE THAN 5 MINUTES UNLESS I HAVE WRITTEN DOWN WHY." DO YOU SEE THAT?
MR. DOWNEY: AND THEN IN THE LAST SENTENCE HE SAYS, "MY FOCUS IS ON HOW THEY WILL SERVE THE COMPANY MORE." DO YOU SEE THAT?
MR. DOWNEY: AND WHAT DID YOU UNDERSTAND MR. BALWANI TO BE COMMUNICATING HERE?
ELIZABETH A. HOLMES: HE WAS REACTING TO WHAT I WAS DESCRIBING ABOUT MEETINGS I WAS HAVING WITH PEOPLE IN THE COMPANY, AND HE WAS SAYING THAT I WAS SPENDING TOO MUCH TIME ON IT, AND THAT I WASN'T FOCUSSED ENOUGH, AND THAT I SHOULD NOT BE ENGAGING WITH PEOPLE IN DETAIL LIKE THAT, BUT RATHER DOING VERY RAPID MEETINGS AND ONLY FOCUSSING ON SPECIFIC ACTION ITEMS OR GOALS IN THOSE INTERACTIONS.
MR. DOWNEY: OKAY. IF YOU GO TO THE THIRD PARAGRAPH, HE BEGINS BY SAYING, "I WILL ALWAYS GIVE CRISP, CLEAN GOALS AND FEEDBACK TO MY SUBORDINATES."
MR. DOWNEY: AND WHAT DID YOU UNDERSTAND HIM TO BE COMMUNICATING HERE?
ELIZABETH A. HOLMES: AGAIN, THAT I NEEDED TO BE MORE FOCUSSED IN MY COMMUNICATION; THAT I NEEDED TO BE CRISP AND CLEAR ABOUT WHAT PEOPLE'S GOALS WERE; AND BE VERY POINTED IN FEEDBACK TO PEOPLE.
MR. DOWNEY: NOW, YOU TESTIFIED A FEW MINUTES AGO THAT MR. BALWANI THOUGHT THAT YOU HAD SOME CHARACTERISTICS THAT MIGHT PRESENT A PROBLEM FOR YOU IN SUCCEEDING AS AN EXECUTIVE. DID HE GIVE YOU ADVICE AS TO HOW TO OVERCOME, OR DID HE TELL YOU HOW TO OVERCOME THOSE CHARACTERISTICS AND BE SUCCESSFUL?
ELIZABETH A. HOLMES: HE DID. HE TOLD ME THAT HE COULD TEACH ME HOW TO OVERCOME MY LIMITATIONS.
MR. DOWNEY: LET'S LOOK AT PAGE 2 OF THE DOCUMENT. DO YOU SEE THAT THIS PAGE IS LABELLED "PURSUIT OF SUCCESS IN BUSINESS"?
MR. DOWNEY: AND IF YOU GO DOWN TO THE MIDDLE OF THE -- ALMOST HALFWAY DOWN, DO YOU SEE THAT THERE'S A SENTENCE THAT BEGINS, "EVEN PEOPLE"?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: DO YOU SEE, "EVEN PEOPLE WHO SUCCEED DON'T REFLECT ON THEIR SUCCESS IN BUSINESS AND FINANCE AND ATTRIBUTE THIS TO THEIR GUT OR HUNCH." DO YOU SEE THAT?
MR. DOWNEY: AND THEN A LITTLE DOWN FROM THERE, HE ASKS A QUESTION ALMOST AT THE BOTTOM OF THE PAGE. DO YOU SEE AT THE BOTTOM OF PAGE 2 OF THE EXHIBIT, DIRECTING YOUR ATTENTION TO WHERE IT BEGINS, "SO, WHAT ABOUT PEOPLE WHO DON'T HAVE THE NATURAL INSTINCT FOR BUSINESS"? DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WHAT WAS THIS PARAGRAPH ADDRESSING?
ELIZABETH A. HOLMES: HE WAS TALKING ABOUT ME AND THE IDEA THAT EVEN IF I DIDN'T HAVE A NATURAL INSTINCT FOR BUSINESS, THAT I COULD BE TAUGHT TO OVERCOME THAT THROUGH A FORMULA FOR SUCCESS IN BUSINESS THAT HE TOLD ME ABOUT AND SAID THAT HE WOULD TEACH ME.
MR. DOWNEY: OKAY. LET'S GO TO THE NEXT PAGE. AND THEN DO YOU SEE THE NEXT PAGE BEGINS, "THE SINGLE MOST IMPORTANT INGREDIENT TO THIS SECRET SAUCE IS DISCIPLINE." DO YOU SEE THAT?
MR. DOWNEY: AND THEN HE GOES ON TO TALK ABOUT SELF DISCOVERY. DO YOU SEE THAT?
MR. DOWNEY: AND WHAT DID YOU UNDERSTAND HIM TO BE COMMUNICATING IN THIS PAGE OF THE NOTES?
ELIZABETH A. HOLMES: HE'S TALKING ABOUT LIVING A DISCIPLINED LIFE, SOME OF THE TENETS THAT I WAS TALKING ABOUT AROUND THE WAY YOU BEHAVE, THE WAY YOU SLEEP, THE WAY YOU WORK, AND THIS IDEA THAT WRITING AND WRITING OUT THESE TENETS ON A REGULAR BASIS WAS A KEY TO SUCCESS.
MR. DOWNEY: AND DID MR. BALWANI PRESCRIBE FOR YOU A PARTICULAR SCHEDULE THAT YOU SHOULD KEEP TO IN ORDER TO SUCCEED IN BUSINESS?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: AND LET ME ASK YOU TO LOOK AT EXHIBIT 7731. ARE THESE NOTES MADE IN YOUR HANDWRITING?
MR. DOWNEY: AND ARE THEY MADE AT SOME POINT BETWEEN 2005 AND 2009?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 7731.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7731 WAS RECEIVED IN EVIDENCE.)
MR. DOWNEY: IF YOU COULD JUST BLOW THAT UP ON THE SCREEN.
MR. DOWNEY: I'M JUST SHOWING YOU THE TOP HALF OF THIS DOCUMENT WITH TIMES. WHAT IS THIS DOCUMENT?
ELIZABETH A. HOLMES: THIS IS MY SCHEDULE FOR HOW I WOULD WORK EVERY DAY AND GET READY TO GO INTO THE OFFICE WITH SOME OF THE KEY TENETS ABOUT HOW I WOULD BE OR WHAT I WOULD FOCUS ON.
MR. DOWNEY: AND IF YOU GO TO THE, TO THE VERY BOTTOM OF THE FIRST HALF OF THIS, DO YOU SEE THAT -- YOU CAN BLOW THAT UP AGAIN, MR. BENNETT. DO YOU SEE THAT THERE'S A REFERENCE TO LUNCH AND DINNER?
MR. DOWNEY: AND WHY IS THAT THERE?
ELIZABETH A. HOLMES: THIS WAS PART OF FOCUSSING ONLY ON FOODS THAT COULD GIVE ME THE MOST ENERGY TO BE THE BEST ENTREPRENEUR AND THE MOST SUCCESSFUL THAT I COULD BE WORKING ALL OF THE TIME.
MR. DOWNEY: AND THEN IF YOU GO TO THE SECOND HALF OF THE PAGE. CAN YOU EXPLAIN WHAT THIS IS?
ELIZABETH A. HOLMES: THIS IS ME WRITING OUT THOSE TENETS THAT I WOULD PROVIDE CRISP AND CONCISE FEEDBACK, THAT I WOULD BE SUPER DISCIPLINED ABOUT BEING ON TIME AT MEETINGS, AND BEING IN THE OFFICE, THAT I WOULD BE FOCUSSED ONLY ON BUSINESS AND NOT GET DISTRACTED BY OTHER AREAS, THAT I WOULD WRITE OUT IN THE MORNINGS TO KEEP ME FOCUSSED ON THESE THINGS.
MR. DOWNEY: OKAY. IF YOU SEE THE VERY TOP OF THE PORTION THAT IS HIGHLIGHTED -- I DON'T THINK WE CAN SEE THAT ON THE SCREEN, MR. BENNETT. IF WE CAN JUST HIGHLIGHT THAT PORTION JUST BELOW THERE, JUST A LINE BELOW THERE. DO YOU SEE AFTER THE DIET THERE'S A "I DO EVERYTHING I SAY WORD FOR WORD"?
MR. DOWNEY: AND DO YOU SEE THAT THE NEXT ENTRY, OR TWO ENTRIES DOWN, SAYS "I SHOW NO EXCITEMENT"?
MR. DOWNEY: "CALM, DIRECT, POINTED, NONEMOTIONAL." IS THAT SOMETHING THAT MR. BALWANI TOLD YOU WOULD BE HELPFUL TO YOU IN YOUR WORK?
MR. DOWNEY: AND HAD HE MENTIONED TO YOU THAT HE OBSERVED YOU SHOWING EXCITEMENT ON SOME CIRCUMSTANCES?
ELIZABETH A. HOLMES: HE DID. HE FELT LIKE I CAME ACROSS AS A LITTLE GIRL AND THAT I NEEDED TO BE MORE SERIOUS AND POINTED AND NOT BE GIDDY IN MY INTERACTIONS.
MR. DOWNEY: NOW, ARE THE TENETS THAT ARE SET FORTH IN EXHIBIT 7731 AND THE PRIOR SET OF NOTES, 7734, ARE THEY TENETS THAT YOU OBSERVED MR. BALWANI AS LIVING BY?
MR. DOWNEY: DID YOU BELIEVE THAT IF YOU LIVED BY THESE TENETS, THEY WOULD HELP YOU BE SUCCESSFUL AS AN EXECUTIVE?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: DID YOU IMPLEMENT WHAT MR. BALWANI TOLD YOU WOULD LEAD TO SUCCESS IN YOUR EFFORTS TO MAKE THERANOS A SUCCESSFUL COMPANY?
ELIZABETH A. HOLMES: I TRIED TO.
MR. DOWNEY: WERE THERE SITUATIONS WHERE YOU WERE UNSUCCESSFUL IN COMPLYING WITH THE SCHEDULE AND THE OTHER TENETS THAT ARE SET FORTH IN THESE TWO DOCUMENTS?
MR. DOWNEY: AND HOW WOULD MR. BALWANI RESPOND TO THAT?
ELIZABETH A. HOLMES: HE WOULD GET VERY ANGRY WITH ME AND WOULD YELL AT ME ABOUT THE FACT THAT HE WAS SO DISAPPOINTED IN MY MEDIOCRITY AND THE FACT THAT HE WAS TRYING AND TRYING TO TEACH ME HOW TO BE BETTER AND I WASN'T LISTENING TO HIM AND THAT I WAS NEVER GOING TO BE SUCCESSFUL.
MR. DOWNEY: AND IF -- WERE THERE TIMES AFTER THOSE YELLING INCIDENTS WHERE HE WOULD TAKE FURTHER STEPS TO TRY TO HELP YOU COMPLY WITH WHAT HE HAD TOLD YOU TO DO?
ELIZABETH A. HOLMES: YES. HE WOULD GET VERY ANGRY WITH ME, AND THEN HE WOULD SOMETIMES COME UPSTAIRS TO OUR BEDROOM AND HE WOULD FORCE ME TO HAVE SEX WITH HIM WHEN I DIDN'T WANT TO BECAUSE HE WOULD SAY THAT HE WANTED ME TO KNOW THAT HE STILL LOVED ME.
MR. DOWNEY: AND, MS. HOLMES, WAS THAT BEHAVIOR BEHAVIOR THAT PERSISTED THROUGHOUT THE COURSE OF YOUR RELATIONSHIP?
MR. DOWNEY: SO WAS THAT BETWEEN 2005 AND 2016?
MR. DOWNEY: AT THE OUTSET OF YOUR TESTIMONY A WEEK AGO FRIDAY, I HAD ASKED YOU ABOUT YOUR FAMILY GROWING UP. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND YOU SAID THAT YOU HAD A CLOSE FAMILY?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: HOW DID YOUR RELATIONSHIP WITH YOUR FAMILY DEVELOP AFTER YOU BECAME INVOLVED WITH MR. BALWANI?
ELIZABETH A. HOLMES: I SAW THEM LESS THAN I HAD EVER SEEN THEM BEFORE, AND I SPOKE TO THEM LESS THAN I HAD EVER TALKED TO THEM BEFORE.
MR. DOWNEY: AND WHY WAS THAT?
ELIZABETH A. HOLMES: BECAUSE I WAS TRYING TO FOCUS ALL OF MY TIME ON THE COMPANY AND ONLY DOING THINGS THAT WERE DIRECTLY RELEVANT TO THE STRATEGY OF THE COMPANY, AND SUNNY WOULD GET VERY UPSET IF I WAS WITH MY FAMILY BECAUSE HE SAID IT WAS A DISTRACTION TO THE BUSINESS.
MR. DOWNEY: AND WOULD HE SOMETIMES COMPLAIN THAT YOU WERE NEGLECTING FOCUS ON HIM AND WHAT HE WAS ADVISING YOU IN RESPONSE TO YOUR SPENDING TIME WITH YOUR FAMILY?
MR. DOWNEY: LET ME ASK YOU TO LOOK AT A SERIES OF TEXT EXCHANGES. I SHOULD ASK YOU, DID THAT PATTERN WITH RESPECT TO YOUR SPENDING TIME WITH YOUR FAMILY, DID THAT CONTINUE THROUGHOUT THE COURSE OF THE RELATIONSHIP?
ELIZABETH A. HOLMES: IT DID.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 5387F. YOUR HONOR, THIS IS JUST ANOTHER PORTION OF 5387.
ELIZABETH A. HOLMES: SORRY. IT'S IN THE THIRD BINDER?
MR. DOWNEY: IT SHOULD BE IN THE FOURTH BINDER, MS. HOLMES.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: IT SHOULD BE ABOUT THE FOURTH DOCUMENT.
ELIZABETH A. HOLMES: OKAY. I SEE IT.
MR. DOWNEY: IS THIS A SERIES OF TEXT EXCHANGES BETWEEN YOU AND MR. BALWANI IN NOVEMBER OF 2013?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 5387 F.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(GOVERNMENT'S EXHIBIT 5387F WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: ALL RIGHT. AND DO YOU SEE THAT AT THE TOP HERE, THE CONVERSATION BEGINS ABOUT YOUR FAMILY AND YOUR FAMILY WAS BEING, QUOTE-UNQUOTE, HERE? DO YOU SEE THAT?
MR. DOWNEY: AND THEN IF WE GO TO THE NEXT PAGE, THERE'S A SERIES OF ADDITIONAL TEXTS FROM MR. BALWANI ON THAT SUBJECT. DO YOU SEE THAT THE DATE OF THIS IS NOVEMBER 30TH, 2013?
MR. DOWNEY: AND DO YOU SEE THAT THAT WAS JUST -- DO YOU RECALL THAT THAT WAS JUST A VERY SHORT TIME AFTER THE LAUNCH OF SERVICES TO THE PUBLIC IN THERANOS SERVICE CENTERS IN WALGREENS STORES?
ELIZABETH A. HOLMES: IT WAS.
MR. DOWNEY: AND CAN YOU EXPLAIN WHAT IS HAPPENING DURING THE COURSE OF THESE TEXT EXCHANGES WITH MR. BALWANI IN 2013?
ELIZABETH A. HOLMES: HE'S ANGRY WITH ME BECAUSE HE FEELS LIKE WHEN MY FAMILY CAME FOR THANKSGIVING THAT I WAS NOT PAYING ATTENTION TO HIM AND THAT I WAS DISTANT FROM HIM AND THAT HE DOESN'T WANT TO ENGAGE WITH ME ANYMORE BECAUSE HE FEELS LIKE I HAVEN'T CHANGED AND NOW HE'S EXHAUSTED AND HE'S NOT OKAY WITH IT.
MR. DOWNEY: AND DO YOU RECALL AFTER THIS EXCHANGE IN 2013 ANYTHING THAT HAPPENED WITH RESPECT TO MR. BALWANI?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WHAT IS THAT?
ELIZABETH A. HOLMES: THIS IS ONE OF THE NIGHTS WHERE HE CAME UPSTAIRS AND DID THINGS TO ME THAT I DIDN'T WANT AND HE HURT ME.
MR. DOWNEY: NOW, WE'VE HEARD TESTIMONY FROM SEVERAL WITNESSES WHO HAVE TESTIFIED TO OBSERVING THE TWO OF YOU WHILE YOU WERE IN THE OFFICE TOGETHER. DO YOU RECALL HEARING SOME OF THAT TESTIMONY?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND YOU'VE TESTIFIED TODAY THAT MR. BALWANI WOULD FREQUENTLY CRITICIZE YOU AND MAKE COMMENTS ON VARIOUS FAILINGS IN YOUR WORK AS AN EXECUTIVE?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: WHERE WOULD THOSE EXCHANGES TYPICALLY TAKE PLACE?
ELIZABETH A. HOLMES: AT HOME AFTER WE WOULD COME HOME FROM WORK.
MR. DOWNEY: AND YOU TESTIFIED THAT YOU WOULD -- MR. BALWANI HAD SAID TO YOU THAT ONE OF THE PROCESSES YOU SHOULD ENGAGE IN IS TO KILL THE OLD ELIZABETH. DID I UNDERSTAND THAT CORRECTLY?
MR. DOWNEY: AND WHAT DID YOU UNDERSTAND THAT TO MEAN?
ELIZABETH A. HOLMES: THAT MEANT THAT WHO I WAS WAS NEVER GOING TO BE A PERSON THAT COULD SUCCEED IN LIFE OR IN BUSINESS, AND I NEEDED TO KILL THAT PERSON AND BECOME A NEW ELIZABETH WHO WOULD EMBODY THESE TENETS AND HAVE A CHANCE AT ACHIEVING MY VISION.
MR. DOWNEY: DID MR. BALWANI MAKE COMMENTS ALONG THOSE LINES EVEN WHEN YOU WERE SERVING AS THE CEO OF THERANOS?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT, WITHIN 5387, AT THE PAGE NUMBERED 63 ON THE BATES LABELS --
MR. DOWNEY: -- ON THE RIGHT-HAND COLUMN. WE'LL DRAW IT UP. DO YOU SEE THE TEXT FROM YOU THERE THAT SAYS, "MY NEW LIFE AS OF THIS NIGHT AND FOREVER MORE"?
MR. DOWNEY: AND THEN YOU LIST A VARIETY OF CHARACTERISTICS THAT YOU'LL TRY TO EMBODY AFTER THAT?
MR. DOWNEY: AND IS THAT SOMETHING THAT YOU SENT TO MR. BALWANI IN REACTION TO CONVERSATIONS THAT YOU AND HE WERE HAVING?
MR. DOWNEY: AND DO YOU SEE UNDERNEATH THAT YOU WRITE, ABOUT TEN MINUTES AFTER YOU SENT THE TEXT, "NO RESPONSE?"
MR. DOWNEY: AND THEN MR. BALWANI RESPONDS AT 2:46, "AWESOME. U R LISTENING AND PAYING ATTENTION." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WERE EXCHANGES OF THIS KIND, ORALLY OR AT HOME, COMMON WHEN MR. BALWANI WAS DISAPPOINTED WITH SOMETHING RELATED TO WHAT WAS GOING ON AT WORK?
MR. DOWNEY: NOW, WE ALSO HEARD TESTIMONY THAT PEOPLE DID NOT SEE YOU DISAGREE DURING THE COURSE OF MEETINGS WHILE YOU WERE AT WORK. DO YOU RECALL SOME INSTANCES WHERE YOU DISAGREED AT MEETINGS AND WORK AND MR. BALWANI REACTED?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT THE PAGES THAT ARE BATES LABELLED 63 AND 64.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: AND IS THIS A TEXT FROM YOU TO MR. BALWANI ON NOVEMBER THE 8TH, 2014?
MR. DOWNEY: AND THEN IF YOU LOOK AT THE ENTIRE BODY OF TEXTS THEREAFTER, IF YOU GO DOWN, AND JUST CONCLUDING WITH THE TEXT THAT SAYS, "ARE YOU LEAVING BECAUSE OF US FIGHTING?" CAN YOU EXPLAIN TO US WHAT IS GOING ON IN THIS EXCHANGE?
ELIZABETH A. HOLMES: SUNNY IS MAD AT ME BECAUSE HE FELT LIKE I INTERRUPTED HIM IN FRONT OF OTHER PEOPLE IN A MEETING, AND I WAS SAYING TO HIM THAT HE WAS MAKING FACES AT ME THAT WERE REALLY VISIBLE TO PEOPLE, WHICH WAS CREATING A VERY STRANGE DYNAMIC IN THE MEETING AND THAT THE ONLY TIME -- THE ONLY REASON I DID THAT WAS BECAUSE I WAS TRYING TO SMOOTH OVER THE SITUATION WITH THE FACES THAT HE WAS MAKING AT ME, AND HE'S WALKING OUT OF THE OFFICE.
MR. DOWNEY: AND WOULD MR. BALWANI ALSO ON OCCASION CRITICIZE YOU FOR YOUR PERFORMANCE IN MEETINGS WHILE THE MEETING WAS ONGOING?
MR. DOWNEY: WOULD HE SOMETIMES DO THAT BY TEXT?
MR. DOWNEY: LET'S LOOK AT BATES LABEL 148 IN THE SAME EXHIBIT. DO YOU SEE THAT HE SAYS "YOU ARE SPEAKING WITH EVERYONE IN YOUR GIDDY VOICE - EXCESSIVE USE OF 'AWESOME'"?
MR. DOWNEY: AND YOU RESPOND "THANK YOU THANK YOU"?
MR. DOWNEY: AND THEN "FOREVER." DO YOU SEE THAT?
MR. DOWNEY: AND LET'S LOOK NEXT AT 246. AND DO YOU SEE THIS IS A TEXT FROM HIM TO YOU IN JUNE OF 2015?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU SEE HE SAYS, "U R RAMBLING NOW. LET'S STAY FOCUSSED"?
MR. DOWNEY: NOW, AT THE TIME IN 2014, 2015, THERANOS WAS CERTAINLY ENJOYING A LOT OF SUCCESS AS A COMPANY. IS THAT FAIR TO SAY?
ELIZABETH A. HOLMES: WE WERE.
MR. DOWNEY: AND THERE WERE POSITIVE FEEDBACK ABOUT THE COMPANY COMING FROM A NUMBER OF SOURCES?
MR. DOWNEY: WAS MR. BALWANI'S REACTION TO THAT THAT YOU WERE RESPONSIBLE FOR THERANOS'S SUCCESS OR SOMETHING ELSE?
ELIZABETH A. HOLMES: IT WAS THAT HE WAS, THAT HE HAD BUILT ME INTO WHO I WAS.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT THE BATES LABEL 207?
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: DO YOU RECALL BEING INVITED TO HARVARD UNIVERSITY TO GIVE A TALK ABOUT WOMEN IN ENGINEERING?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND ARE THESE TEXTS THAT YOU SENT AROUND THE TIME OF THAT PRESENTATION?
MR. DOWNEY: AND WERE YOU GIVING -- TELLING HIM HOW PLEASED YOU WERE THAT YOU WERE GETTING -- THERE WAS INTEREST IN WOMEN IN ENGINEERING IN CONNECTION WITH THE PRESENTATION THAT YOU WERE GIVING?
ELIZABETH A. HOLMES: YES, I WAS TALKING ABOUT ALL OF THESE GIRLS COMING UP TO ME AND SAYING THAT THEY WERE INSPIRED.
MR. DOWNEY: AND DO YOU SEE HIS COMMENT AT 11:06 AND HE'S SAYING "I HAVE MOLDED YOU"?
MR. DOWNEY: AND WHAT DID YOU UNDERSTAND THAT WOULD MEAN?
ELIZABETH A. HOLMES: THAT HE MOLDED ME, THAT HE BUILT ME INTO WHO I WAS, AND THAT IF PEOPLE WERE INSPIRED BY ME, IT WAS BECAUSE OF THAT.
MR. DOWNEY: AND IF YOU SEE BELOW IN THE BOTTOM FOUR TEXTS, YOU RESPOND WITH SOME TEXTS THAT SEEM FAIRLY LOVING. DO YOU SEE THAT?
MR. DOWNEY: AND CAN YOU EXPLAIN THOSE RESPONSES?
ELIZABETH A. HOLMES: THAT HE WAS HAPPY WITH ME. HE SAID, "U R MY MADIBA NOW," AND THAT MEANT THAT I COULD BE HIS, THAT I HAD SATISFIED HIS GOALS FOR ME.
MR. DOWNEY: LET ME ASK YOU TO LOOK BACK AT 87 TO 88, THOSE BATES LABELS.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: ALL RIGHT. AND DO YOU SEE THIS IS A TEXT FROM MR. BALWANI TO YOU IN DECEMBER OF 2014?
MR. DOWNEY: AND DO YOU SEE THAT HE SENDS YOU A LOVING MESSAGE ABOUT ADMIRING YOU AND YOUR WISDOM AND STRENGTH?
MR. DOWNEY: LET'S LOOK AT YOUR RESPONSE. AND YOU SAY, "YOU KNOW WHAT THESE THINGS COMING FROM YOU MEAN TO ME. WHAT YOU SAY TO ME EQUALS MY CONFIDENCE." DO YOU SEE THAT?
MR. DOWNEY: AND THEN HE OFFERS SOME RESPONSES. AND DO YOU SEE AT THE BOTTOM, "I MEAN WHAT I TEXTED YOU LITERALLY." DO YOU SEE THAT?
MR. DOWNEY: AND WHAT WERE YOU REFERRING TO THERE?
ELIZABETH A. HOLMES: THAT HOW HE FELT ABOUT ME WAS MY CONFIDENCE.
MR. DOWNEY: NOW, YOU TESTIFIED A FEW MOMENTS AGO THAT THERE WOULD BE INSTANCES WHERE MR. BALWANI WOULD ACTUALLY VERBALLY BERATE YOU?
MR. DOWNEY: AND WERE THERE OCCASIONS ON WHICH YOU WOULD SOMETIMES WRITE DOWN YOUR THOUGHTS AFTER SOME OF THOSE INCIDENTS?
MR. DOWNEY: AND WHERE WOULD YOU TYPICALLY DO THAT?
ELIZABETH A. HOLMES: ON MY IPHONE IN MY NOTES.
MR. DOWNEY: AND I'LL ASK YOU TO LOOK AT EXHIBIT 7534.
ELIZABETH A. HOLMES: IN THE FOURTH BINDER?
MR. DOWNEY: YES.
ELIZABETH A. HOLMES: OKAY. OKAY. YES.
MR. DOWNEY: ARE THESE NOTES FROM YOUR IPHONE FROM AROUND APRIL OF 2015?
MR. DOWNEY: AND DO THEY RELATE TO AN INTERACTION THAT YOU HAD HAD WITH MR. BALWANI?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 7534.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7534 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: I'LL ASK YOU TO TAKE A MOMENT TO LOOK AT THAT AND ASK YOU IF YOU CAN RECALL THE INCIDENT THAT LED YOU TO TAKE THESE NOTES.
ELIZABETH A. HOLMES: YES, I CAN.
MR. DOWNEY: TELL US WHAT HAPPENED.
ELIZABETH A. HOLMES: THAT SUNNY FELT THAT THE WAY I WAS RUNNING R&D WAS A DISASTER AND HE WAS GIVING ME FEEDBACK ON WHAT HE EXPECTED FROM ME.
MR. DOWNEY: LET'S JUST LOOK AT THE FIRST SERIES OF STATEMENTS IN THERE BEGINNING WITH, "I EXPECT," DOWN TO "CONVINCED NEVER." ALL RIGHT. AND DO YOU SEE THAT HE HAS A SERIES OF COMMENTS HERE ABOUT EXPECTING THINGS AND EXPECTING EXCELLENCE, ET CETERA. WHEN YOU WERE WRITING THESE NOTES, WHAT WERE YOU RECORDING?
ELIZABETH A. HOLMES: I WAS RECORDING WHAT HE WAS SAYING SO THAT HE WOULD SEE THAT I WAS LISTENING TO HIM.
MR. DOWNEY: AND IF YOU GO ABOUT HALFWAY DOWN, BEGINNING WITH THE PARAGRAPH THAT BEGINS "FOCUS." DO YOU SEE THAT IT READS, "NOT PRIDE IN MULTI TASK. NO MIND. PRESENT. WOMEN BATTLE DRESS LIKE MEN. SAME TRAINING. TOUGHEN UP. BECOME MASCULINE IN BATTLE. MASCULINE GAME. BUSINESS MASCULINE GAME." DO YOU SEE THAT?
MR. DOWNEY: AND WHAT WAS THAT RECORDING?
ELIZABETH A. HOLMES: AGAIN, THAT SUNNY FELT THAT I WAS TOO FEMININE, THAT I WAS LIKE A LITTLE GIRL, AND THAT I NEEDED TO BE MORE LIKE A MAN IF I WANTED TO BE IN BUSINESS.
MR. DOWNEY: AND IF YOU GO UNDER "COMMAND," WHERE IT BEGINS, "I'M SO SICK."
MR. DOWNEY: AND DO YOU SEE WHERE IT SAYS, "I'M SO SICK AND TIRED"?
MR. DOWNEY: AND THE FIRST SENTENCE READS, "I'M SO SICK AND TIRED OF THIS MEDIOCRITY YOU CREATE. IT'S ASTONISHING. YOU'LL NEVER HOLD ANYBODY RESPONSIBLE FOR ANY ACTIONS. YOU'LL NEVER DO THAT. I DON'T WANT TO WORK WITH YOU ANYMORE." DO YOU SEE THAT?
MR. DOWNEY: AND WHAT WERE YOU RECORDING THERE?
ELIZABETH A. HOLMES: WHAT SUNNY WAS SAYING TO ME, THAT HE WAS ASTONISHED BY MY MEDIOCRITY AND THAT HE WAS EXHAUSTED WORKING WITH ME BECAUSE I COULDN'T BE SUCCESSFUL. I WAS A MONKEY THAT WAS TRYING TO FLY A SPACESHIP.
MR. DOWNEY: OKAY. AND IF YOU GO DOWN TO THE BOTTOM FOUR SENTENCES BEGINNING WITH "I DON'T ENJOY." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND HE SAYS, "I DON'T ENJOY BEING IN A COMPANY THAT'S NOT GOING TO WIN. I DON'T HAVE THE FAITH." DO YOU SEE IT GOES ON FROM THERE?
MR. DOWNEY: AND ARE THESE ALSO COMMENTS THAT MR. BALWANI MADE TO YOU?
MR. DOWNEY: DO YOU SEE IN THE SECOND PARAGRAPH HE SAYS, "BIGGEST FAILURE OF MY LIFE. REGRET COMING. STAYED BECAUSE I LOVE YOU." DO YOU SEE THAT?
MR. DOWNEY: CAN YOU EXPLAIN WHAT MR. BALWANI WAS COMMUNICATING THERE?
ELIZABETH A. HOLMES: THAT HE HAD BEEN TELLING ME WHAT TO DO AND HOW TO BECOME THE SUCCESSFUL PERSON BECAUSE HE LOVED ME, BUT THAT HE WAS INCREDIBLY ANGRY WITH ME BECAUSE I WASN'T EVER ABLE TO BECOME THAT.
MR. DOWNEY: NOW, I ASKED YOU A MOMENT AGO IN CONNECTION WITH THESE NOTES ABOUT BEING VERBALLY BERATED AND RECORDING IT IN IPHONE NOTES. I WANT TO ASK YOU, IF I MIGHT, JUST FOR A MOMENT ABOUT THE INCIDENTS THAT YOU HAD DESCRIBED WITH MR. BALWANI OF FORCED INTERCOURSE. DID YOU SOMETIMES TAKE IPHONE NOTES IN THE WAKE OF SOME OF THOSE INCIDENTS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 7517.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: IS THIS ANOTHER SET OF NOTES THAT YOU RECORDED AFTER AN INCIDENT WITH MR. BALWANI?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 7517.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7517 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND WE SHOW THE DATE HERE AS BEING FEBRUARY 11TH, 2015. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND I WANT TO JUST FOCUS ON THE FIRST THREE LINES OF THIS IPHONE NOTE AND ASK YOU TO REVIEW THOSE AND ASK YOU IF YOU CAN DESCRIBE WHAT YOU WERE REACTING TO AND WRITING HERE.
ELIZABETH A. HOLMES: I'M REACTING TO ONE OF THOSE INCIDENTS WITH MR. BALWANI AND I'M WRITING ABOUT THE FACT THAT I COULDN'T MOVE AND I COULDN'T SIT UP AND THAT I WAS LYING THERE SWOLLEN AND THAT I COULDN'T UNDERSTAND WHY I WAS HURTING MYSELF, WHY I WASN'T LEAVING.
MR. DOWNEY: NOW, IF YOU LOOK BACK AT 53 -- IF YOU NOTICE ON THESE DOCUMENTS, THESE DOCUMENTS APPEAR TO BE CREATED ON FEBRUARY 11TH OF 2015 UP AND THROUGH FEBRUARY 13TH OF 2015. DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: LET'S LOOK BACK AT EXHIBIT 5387F AT BATES LABEL 121. IF WE CAN JUST BLOW THAT UP SO THERE'S A BETTER VIEW ON THE SCREEN. IS THE TOP TEXT FROM YOU TO MR. BALWANI IN THAT TIMEFRAME?
MR. DOWNEY: AND DO YOU SEE YOU WRITE TO HIM, "I'M SORRY I WASN'T STRONGER FOR YOU THIS MORNING. THAT IS MY RESPONSIBILITY AND MY ROLE. I WILL NEVER LET THAT HAPPEN AGAIN." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THEN HE RESPONDS, "I AM STRONG ENOUGH FOR ME AND U AND THEN SOME. I DON'T NEED U TO BE STRONG FOR ME." DO YOU SEE THAT?
MR. DOWNEY: AND THEN THE NEXT LINE YOU SAY, "I HAVE THE PRIVILEGE OF BEING ABLE TO CALM YOU AS A MOTHER ENERGY." DO YOU SEE THAT?
MR. DOWNEY: AND WHEN YOU REFER THERE TO "AS A MOTHER ENERGY," WHAT IS THAT A REFERENCE TO?
ELIZABETH A. HOLMES: THAT I THOUGHT MY ROLE WAS TO CALM HIM WHEN HE WAS ANGRY AND THAT I HADN'T BEEN ABLE TO DO THAT, THAT I HADN'T BEEN ABLE TO TAKE IT.
MR. DOWNEY: AND THEN IF YOU LOOK AT THE BOTTOM -- SECOND TO THE BOTTOM TEXT, YOU SAY, "MY JOB IS TO LOVE YOU WHEN YOU'RE STRESSED." DO YOU SEE THAT?
MR. DOWNEY: AND MR. BALWANI RESPONDS, "I KNOW." DO YOU SEE THAT?
MR. DOWNEY: AND WAS THIS AN EXCHANGE THAT IS TYPICAL OF WHAT WOULD HAPPEN IN THE WAKE OF THESE INCIDENTS?
MR. DOWNEY: AND THIS IS FROM FEBRUARY OF 2015?
MR. DOWNEY: AND HAD THESE INCIDENTS BEEN OCCURRING THROUGHOUT THE RELATIONSHIP?
MR. DOWNEY: NOW, YOU MENTIONED THAT WHEN YOU MET HIM WHEN YOU WERE AN 18 YEAR OLD, YOU THOUGHT THAT HE WAS AN IMPRESSIVE EXECUTIVE. DURING THE TIME PERIOD THAT WE'RE CONCERNED WITH, THE PERIOD FROM 2010 TO 2016, HOW DID YOU PERCEIVE MR. BALWANI'S CAPABILITIES AS A BUSINESS PERSON AND WHAT EFFECT DID YOUR RELATIONSHIP HAVE ON THAT?
ELIZABETH A. HOLMES: HE HAD TAUGHT ME EVERYTHING THAT I THOUGHT I KNEW ABOUT BUSINESS, AND I THOUGHT HE WAS THE BEST BUSINESS PERSON THAT I KNEW. AND I THINK THAT I DIDN'T QUESTION HIM IN THE WAY THAT I OTHERWISE WOULD HAVE.
MR. DOWNEY: DID THAT REMAIN YOUR VIEW UNTIL 2016?
ELIZABETH A. HOLMES: IT DID.
MR. DOWNEY: DID THAT VIEW CHANGE IN 2016?
ELIZABETH A. HOLMES: IT DID.
MR. DOWNEY: WHAT HAPPENED TO CHANGE THAT VIEW?
ELIZABETH A. HOLMES: THE CMS INSPECTION. I HAD GONE INTO THAT INSPECTION THINKING THAT WE HAD ONE OF THE BEST LABS IN THE WORLD, AND THE FINDINGS FROM THOSE INSPECTIONS WERE SO FUNDAMENTALLY DIFFERENT FROM WHAT I BELIEVED THAT IT COULDN'T BE THE CASE THAT OUR OPERATIONS WERE RUNNING LIKE ONE OF THE BEST COMPANIES IN THE WORLD.
MR. DOWNEY: WELL, HOW DID YOU RESPOND TO LEARNING THAT CMS WAS CRITICAL OF THE COMPANY'S LAB OPERATIONS?
ELIZABETH A. HOLMES: BY BRINGING IN AS MANY EXPERTS AS I COULD, HIRING TWO NEW LAB DIRECTORS AND BRINGING IN A NUMBER OF LABORATORY EXPERTS TO LOOK AT THE FINDINGS AND TRY TO UNDERSTAND THEM AND TRY TO FIX THEM.
MR. DOWNEY: AND HOW DID MR. BALWANI RESPOND TO THOSE CHANGES WITHIN THE COMPANY?
ELIZABETH A. HOLMES: HE DIDN'T LIKE THEM.
MR. DOWNEY: WAS THERE A PERIOD AFTER YOU LEARNED OF THE CMS VIEW OF THE THERANOS LAB WHERE YOU WERE STILL SUPPORTIVE OF MR. BALWANI AND SUPPORTIVE OF THE WORK THAT HAD BEEN DONE IN THE LAB?
ELIZABETH A. HOLMES: I -- FOR SOME TIME, YES.
MR. DOWNEY: AND MR. BALWANI ULTIMATELY LEFT THE COMPANY IN MAY OF 2016; IS THAT RIGHT?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: AND TELL US WHAT HAPPENED IN THE -- WITH YOUR PERCEPTION OF MR. BALWANI BETWEEN THE INITIAL RESPONSE AND THE TIME THAT HE LEFT THE COMPANY AS TO YOUR VIEW OF HIM AS A CAPABLE EXECUTIVE.
ELIZABETH A. HOLMES: HE WASN'T WHO I THOUGHT HE WAS, AND I REALIZED THAT IF I WAS GOING TO FIX THE ISSUES AND ALLOW THE COMPANY TO SEE THROUGH ITS POTENTIAL, I HAD TO DO THAT WITHOUT HIM IN THE COMPANY.
MR. DOWNEY: DID YOU CONTINUE YOUR PERSONAL RELATIONSHIP WITH MR. BALWANI AFTER HE LEFT THE COMPANY?
MR. DOWNEY: WERE YOU LIVING WITH HIM IN 2016?
MR. DOWNEY: DID YOU MOVE OUT OF THAT LIVING ARRANGEMENT?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WHEN DID YOU DO THAT?
ELIZABETH A. HOLMES: IN MAY OF 2016.
MR. DOWNEY: DID ANYONE HELP YOU WITH THAT?
MR. DOWNEY: WHO HELPED YOU?
ELIZABETH A. HOLMES: MY BROTHER.
MR. DOWNEY: DID YOU TELL MR. BALWANI IN ADVANCE THAT YOU WERE MOVING OUT?
MR. DOWNEY: WHERE WAS MR. BALWANI WHEN YOU MOVED OUT OF THE HOME THAT YOU SHARED?
ELIZABETH A. HOLMES: HE WAS IN, I THINK, THAILAND.
MR. DOWNEY: AT SOME POINT DID YOU MAKE HIM AWARE WHILE HE WAS IN THAILAND THAT YOU HAD MOVED OUT?
MR. DOWNEY: HOW DID HE REACT?
ELIZABETH A. HOLMES: HE SAID HE WAS GETTING ON A PLANE TO COME BACK.
MR. DOWNEY: AND AFTER THAT PERIOD OF TIME IN LATE MAY AND EARLY JUNE 2000 -- DID YOU HAVE A RELATIONSHIP OF ANY KIND WITH MR. BALWANI?
MR. DOWNEY: I WANT TO TALK ABOUT THE FINDINGS IN THE LAB AND THE RESPONSE WITH SOME MORE SPECIFICITY IN A MOMENT, BUT WITH RESPECT TO THE TESTIMONY THAT YOU'VE JUST GIVEN, YOU HAD A PROFESSION RELATIONSHIP WITH MR. BALWANI FOR ALMOST SEVEN YEARS; RIGHT?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND YOU HAD A PERSONAL RELATIONSHIP WITH HIM FOR 13 YEARS?
ELIZABETH A. HOLMES: YES, ABOUT THAT.
MR. DOWNEY: ARE YOU SAYING THAT MR. BALWANI FORCED YOU TO MAKE THE STATEMENTS TO INVESTORS THAT YOU MADE DURING THE COURSE OF THIS CASE?
MR. DOWNEY: ARE YOU SAYING THAT HE FORCED YOU TO MAKE CERTAIN STATEMENTS TO JOURNALISTS THAT WE'VE HEARD ABOUT DURING THE COURSE OF THE CASE?
MR. DOWNEY: ARE YOU SAYING THAT HE CONTROLLED YOUR INTERACTIONS WITH, FOR EXAMPLE, WALGREENS AND SAFEWAY EXECUTIVES?
MR. DOWNEY: ARE YOU SAYING THAT HE CONTROLLED YOUR INTERACTIONS WITH MEMBERS OF THE THERANOS BOARD IN THE PERIOD BETWEEN 2010 AND 2016?
MR. DOWNEY: WHAT IMPACT, IF ANY, DID YOUR PERSONAL RELATIONSHIP WITH MR. BALWANI HAVE ON YOUR WORK AT THERANOS IN YOUR VIEW?
ELIZABETH A. HOLMES: I DON'T KNOW. HE IMPACTED EVERYTHING ABOUT WHO I WAS, AND I DON'T FULLY UNDERSTAND THAT.
MR. DOWNEY: DID YOU HAVE CONFIDENCE IN HIM IN THE AREAS FOR WHICH HE WAS RESPONSIBLE DURING THAT PERIOD?
ELIZABETH A. HOLMES: COMPLETELY.
MR. DOWNEY: DID YOU OFTEN OVERRULE HIM IN THE AREAS FOR WHICH HE WAS RESPONSIBLE?
MR. DOWNEY: LET'S TALK ABOUT THE FINDINGS OF CMS AND YOUR RESPONSE TO THEM IN THE FALL OF 2015 THROUGH THE FIRST HALF OF 2016. YOU MENTIONED THAT YOU HIRED TWO LAB DIRECTORS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WHAT WAS THE -- WHAT HAPPENED TO THE REPORTING STRUCTURE FOR LAB DIRECTORS AT THERANOS AT THAT POINT?
ELIZABETH A. HOLMES: I HAD THEM REPORT TO ME DIRECTLY.
MR. DOWNEY: WHY DID YOU DO THAT?
ELIZABETH A. HOLMES: BECAUSE I WANTED TO MAKE SURE THAT WE FIXED WHATEVER ISSUES EXISTED IN THE LABORATORY SO THAT THE COMPANY COULD MOVE FORWARD.
MR. DOWNEY: AT SOME POINT DID YOU HIRE DR. DAS AS ANOTHER LABORATORY DIRECTOR?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WAS THE COMPANY CONTINUING TO INTERACT WITH CMS ABOUT ITS INSPECTION?
MR. DOWNEY: AND DID THE COMPANY EXPECT THAT AT SOME POINT IT WOULD RECEIVE A REPORT FROM CMS OF WHAT CMS'S CONCLUSIONS WERE?
MR. DOWNEY: AND DID YOU DISCUSS ALL OF THOSE ISSUES WITH DR. DAS AND THE OTHER LABORATORY DIRECTORS THAT YOU HIRED?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND AT SOME POINT, DID CMS ISSUE A REPORT ON ITS CONCLUSIONS ABOUT THERANOS?
MR. DOWNEY: DID YOU DISCUSS THAT REPORT WITH DR. DAS AND WITH THE OTHER CLINICIANS AND SCIENTISTS AT THE COMPANY?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND WAS DR. DAS HIMSELF ALSO TRYING TO EVALUATE THE PERFORMANCE OF THE LAB AT THAT TIME?
ELIZABETH A. HOLMES: HE WAS.
MR. DOWNEY: AND DO YOU RECALL THAT DR. DAS TESTIFIED THAT THERE WAS A MEETING IN MARCH OF 2016 RELATED TO CMS'S CONCLUSIONS WITH REGARD TO -- OR TENTATIVE CONCLUSIONS WITH REGARD TO THERANOS'S LAB?
MR. DOWNEY: WHAT -- AND DID YOU ATTEND THAT MEETING?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: OTHER THAN YOURSELF AND DR. DAS, WHO WAS PRESENT AT THAT MEETING?
ELIZABETH A. HOLMES: DR. YOUNG, DR. PANGARKAR, SEVERAL MEMBERS OF OUR REGULATORY AND LEGAL TEAM, AND I THINK A FEW OTHER SCIENTISTS FROM THE COMPANY.
MR. DOWNEY: WHAT DO YOU RECALL HAPPENING AT THAT MEETING?
ELIZABETH A. HOLMES: THAT DR. DAS MADE THE RECOMMENDATION THAT WE VOID CERTAIN TESTS, AND WE DISCUSSED THAT, AS WELL AS SOME OF THE R&D TEAM'S FEEDBACK ON THE PERFORMANCE OF THE TESTS.
MR. DOWNEY: AND WHAT WAS YOUR RESPONSE TO DR. DAS'S RECOMMENDATION THAT THE TESTS BE VOIDED?
ELIZABETH A. HOLMES: THAT IF THAT WAS HIS RECOMMENDATION, WE SHOULD DO IT.
MR. DOWNEY: WERE ANY OF THE OTHER INDIVIDUALS AT THE MEETING, DID ANY OF THE OTHER INDIVIDUALS RAISE QUESTIONS ABOUT WHAT DR. DAS HAD RECOMMENDED?
MR. DOWNEY: WHAT DO YOU RECALL IN THAT REGARD?
ELIZABETH A. HOLMES: THAT MEMBERS OF OUR R&D TEAM BELIEVED THAT THE TESTS THEMSELVES WERE GOOD, BUT THAT THE OPERATIONS OF THE LAB HAD FAILED. QUALITY SYSTEMS HAD FAILED.
MR. DOWNEY: AND WHAT DID THAT SUGGEST THAT THERANOS OUGHT TO DO WITH REGARD TO THE TEST RESULTS THAT HAD BEEN RENDERED IN ITS CLIA LAB?
ELIZABETH A. HOLMES: THAT OUT OF AN ABUNDANCE OF CAUTION TO BE SURE THAT NO ONE GOT A RESULT THAT WAS WRONG, WE VOID ALL OF THE RESULTS.
MR. DOWNEY: NOW, MR. BALWANI, IN ADDITION TO BEING AN EXECUTIVE, HE WAS ALSO ON THE BOARD OF DIRECTORS FOR A TIME AT THERANOS; IS THAT RIGHT?
ELIZABETH A. HOLMES: HE WAS.
MR. DOWNEY: AND WE SPOKE ABOUT HIS DEPARTURE AS AN EXECUTIVE. DID HE LEAVE THE BOARD OF DIRECTORS AT THE SAME TIME?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: WERE THERE OTHER CHANGES TO THE BOARD OF DIRECTORS OF THERANOS IN THAT FIRST PART OF 2016?
MR. DOWNEY: WERE NEW MEMBERS RECRUITED?
MR. DOWNEY: WHAT NEW MEMBERS WERE RECRUITED?
ELIZABETH A. HOLMES: DR. BONANNI AND DAN WARMENHOVEN, AND WE HAD A COUPLE OF OTHER DIRECTORS WHO HAD PREVIOUSLY SERVED ON THE BOARD AS WELL.
MR. DOWNEY: AND WHY DID YOU RECRUIT DR. BONANNI AND MR. WARMENHOVEN?
ELIZABETH A. HOLMES: DR. BONANNI WAS THE HEAD OF OPERATIONS FOR AMGEN, WHICH IS A MAJOR PHARMACEUTICAL COMPANY, AND HE HAD A VERY DEEP BACKGROUND IN NOT ONLY OPERATIONS BUT ALSO QUALITY SYSTEMS, COMPLIANCE, AND REGULATORY PROGRAMS, AND THAT WAS THE AREA OF FOCUS FOR US AT THAT POINT IN TIME. MR. WARMENHOVEN WAS A BOARD MEMBER OF A NUMBER OF TECH COMPANIES AND HE HAD BEEN ON THE BOARD OF BECHTEL, WHICH WAS ONE OF THE PRIVATE COMPANIES THAT WE RESPECTED. RILEY BECHTEL HAD BEEN ON OUR BOARD, AND DAN WOULD BE ABLE TO SUCCEED HIM.
MR. DOWNEY: AND WHAT ABOUT DR. FOEGE'S NEW ROLE?
ELIZABETH A. HOLMES: DR. FOEGE WAS ONE OF THE BEST MEDICAL EXPERTS THAT WE KNEW. HE HAD BEEN AWARDED THE MEDAL OF FREEDOM FOR HIS WORK IN ERADICATING SMALL POX AND HAD RUN THE CDC, AND ONE OF OUR CORE AREAS WAS IN INFECTIOUS DISEASES, SO HAVING HIM THERE AND ACTIVELY ENGAGED WAS REALLY IMPORTANT AS WE TRIED TO SEE THE COMPANY THROUGH AND REFOCUSSED.
MR. DOWNEY: OTHER THAN CHANGES AT THE BOARD OF DIRECTORS, WERE THERE ALSO CHANGES AT THE EXECUTIVE LEVEL?
MR. DOWNEY: AND WHAT WERE THOSE CHANGES?
ELIZABETH A. HOLMES: I HIRED A NEW SENIOR VICE PRESIDENT OF OPERATIONS, A NEW HEAD SENIOR VICE PRESIDENT OF REGULATORY AND QUALITY, A CHIEF COMPLIANCE OFFICER, A NEW HEAD OF PRODUCT, A NEW HEAD OF COMMUNICATIONS, PUT A NEW MANAGEMENT TEAM IN PLACE.
MR. DOWNEY: AND AFTER THESE CHANGES WERE MADE, DID THE COMPANY DISCUSS POTENTIAL CHANGES TO ITS BUSINESS STRATEGY?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: AND DID THE BUSINESS STRATEGY CHANGE?
MR. DOWNEY: FOR A NUMBER OF YEARS THE COMPANY HAD BEEN INVOLVED WITH OPERATING A CLINICAL LAB IN CONNECTION WITH RETAIL STORES; IS THAT RIGHT?
ELIZABETH A. HOLMES: THAT'S RIGHT.
MR. DOWNEY: AND HOW DID THAT STRATEGY CHANGE IN 2016?
ELIZABETH A. HOLMES: WE FOCUSSED THE COMPANY ON WHAT WOULD HAVE BEEN PHASE II OF OUR MODEL AND PLACING DEVICES IN THE FIELD IN DIFFERENT APPLICATIONS.
MR. DOWNEY: NOW, LET ME ASK YOU ABOUT FDA APPROVAL. DID THERANOS GET FDA APPROVAL FOR SOME OF ITS TECHNOLOGY IN 2015?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: AND HAD THERANOS CONTINUED TO WORK ON ITS 4 SERIES DEVICE AFTER THE TIME OF THE CLINICAL LAUNCH IN RETAIL STORES IN 2013?
MR. DOWNEY: AND DID THERE COME A TIME WHEN THERANOS WAS COMFORTABLE SUBMITTING AN APPLICATION FOR APPROVAL OF ITS 4 SERIES SYSTEM IN ONE OF ITS ASSAYS?
MR. DOWNEY: I'M GOING TO SHOW YOU AN EXHIBIT RELATED TO THAT, WHICH IS EXHIBIT 13288. YOUR HONOR, THAT IS NOT IN YOUR NOTEBOOK BECAUSE IT IS AN EXTREMELY LARGE EXHIBIT. I HAVE SHOWN IT TO MR. LEACH IN ADVANCE, AND WE'LL DISPLAY THE PORTIONS OF IT THAT WE NEED TO DISCUSS IF IT'S ADMITTED.
MR. LEACH: SO LONG AS IT'S NOT COMING IN FOR THE TRUTH, YOUR HONOR, I DON'T MIND. IT'S OVER 500 PAGES.
JUDGE DAVILA: WHAT IS THE DOCUMENT?
MR. DOWNEY: THIS IS THE SUBMISSION THAT SHE, MS. HOLMES, JUST TESTIFIED TO.
JUDGE DAVILA: I SEE. ALL RIGHT. AND DO YOU HAVE AN IDEA OF HOW MANY PAGES THAT YOU'RE SEEKING TO ADMIT?
MR. DOWNEY: WELL, I WOULD JUST AS SOON I WOULD ADMIT THE WHOLE DOCUMENT, BUT I'M ONLY GOING TO DISPLAY TODAY, YOU KNOW, FOR PURPOSES OF TODAY'S DISCUSSION, ABOUT SIX OR SEVEN PAGES. SO I'M HAPPY, IF THERE ARE OBJECTIONS TO THE BALANCE OF THE DOCUMENT, BUT I DON'T WANT TO ADMIT ONLY THE PARTS THAT I'M DISPLAYING BECAUSE THERE'S A LARGE AMOUNT OF DATA AND SO FORTH SUBMITTED TO SUPPORT THOSE.
JUDGE DAVILA: SURE. THANK YOU. I'M JUST CURIOUS ABOUT WHAT GETS ADMITTED INTO EVIDENCE THAT THE JURY WOULD THEN FEEL OBLIGATED TO REVIEW FOR PURPOSES OF EVIDENTIARY VALUE IN THEIR DETERMINATION.
MR. DOWNEY: YEAH. WELL, WE CAN, WE CAN ADMIT THE -- I CAN DISPLAY THE PAGES, I CAN PREPARE A SHORTENED VERSION OF THE EXHIBIT --
JUDGE DAVILA: OKAY.
MR. DOWNEY: -- THAT HAS ONLY THE PORTIONS I WANT. I'LL TRY TO DO THAT IN A WAY THAT DOESN'T LEAVE ANY CONFUSION IN THE JURY'S MIND THAT SOMETHING MATERIAL HAS BEEN OMITTED, AND I'LL SHARE THAT WITH MR. LEACH.
JUDGE DAVILA: IS THAT ALL RIGHT WITH YOU, MR. LEACH?
MR. LEACH: THAT'S FINE, YOUR HONOR. BUT I HAVE A HEARSAY OBJECTION. IF IT'S COMING IN FOR THE PURPOSE THAT THEY FILED THIS, FINE. IF IT'S FOR SOME OTHER PURPOSE, WE WOULD OBJECT.
JUDGE DAVILA: SO IS THIS COMING IN FOR THE FACT THAT THIS DOCUMENT WAS FILED AND PROOF OF THAT AND EVIDENCE OF THAT?
MR. DOWNEY: IT'S COMING IN FOR EVIDENCE OF THE FILING AND THE EFFECT THAT THAT HAD ON THIS DEFENDANT'S INTENT.
JUDGE DAVILA: I SEE. ALL RIGHT. SO THIS IS NOT FOR THE TRUTH --
MR. DOWNEY: EVIDENCE OF HER INTENT.
JUDGE DAVILA: IT GOES TO EVIDENCE OF HER INTENT.
MR. DOWNEY: YES.
JUDGE DAVILA: NOT SO MUCH FOR THE TRUTH OF THE MATTER ASSERTED.
MR. DOWNEY: NO. THAT'S RIGHT.
JUDGE DAVILA: ALL RIGHT. LADIES AND GENTLEMEN, YOU'VE HEARD ME SAY THIS BEFORE WITH CERTAIN EVIDENCE, BUT THESE DOCUMENTS OR THESE PAGES ARE GOING TO BE ADMITTED. THEY ARE ADMITTED NOT FOR THE TRUTH OF THE MATTER ASSERTED IN THE DOCUMENTS, BUT RATHER FOR THE EFFECT OF THE STATE OF MIND AS TO THE INTENT OF MS. HOLMES. AND WITH THAT QUALIFICATION, THEY ARE ADMITTED AND THEY MAY BE PUBLISHED.
MR. DOWNEY: YOUR HONOR, IF I MAY JUST RETRIEVE IT AND APPROACH THE WITNESS?
JUDGE DAVILA: SURE. DO YOU HAVE THIS, MR. LEACH?
MR. LEACH: I'VE HAD AN OPPORTUNITY TO REVIEW A COPY OVER THE BREAK. CURRENTLY I DON'T HAVE ONE.
MR. DOWNEY: LET ME JUST ASK BEFORE YOU DISPLAY ANYTHING.
MR. DOWNEY: IS THIS THE HSV, THE SUBMISSION OF THERANOS?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: ALL RIGHT. YOUR HONOR, I FORMALLY, SUBJECT TO OUR PRIOR DISCUSSION, MOVE TO ADMIT 13288.
JUDGE DAVILA: IT'S ADMITTED, AND IT CAN BE PUBLISHED, THOSE PAGES. THANK YOU.
(DEFENDANT'S EXHIBIT 13288 WAS RECEIVED IN EVIDENCE.)
MR. DOWNEY: THANK YOU, YOUR HONOR.
MR. DOWNEY: I'LL ASK YOU TO DESCRIBE A BIT ABOUT THIS DOCUMENT SO THAT MAYBE WE CAN MINIMIZE WHAT IS NECESSARY TO GO TO THE JURY. IS THIS A SUBMISSION THAT THE COMPANY MADE IN NOVEMBER OF 2014 RELATED TO ITS SERIES 4.0 ANALYZER, ITS SOFTWARE ASPECTS OF ITS TECHNOLOGY, AND THE ASSAY FOR HERPES SIMPLEX VIRUS-1?
ELIZABETH A. HOLMES: YES. THIS IS THE FDA SUBMISSION FOR THE NANOTAINER, THE CARTRIDGE, THE ANALYZER, THE SOFTWARE, AND THE HSV-1 ASSAY.
MR. DOWNEY: AND WITHIN THIS DOCUMENT, IF YOU WOULD JUST TAKE A MOMENT TO LOOK AT IT, IS THERE A -- DOES IT HAVE THE FOLLOWING COMPONENTS? IS THERE A DESCRIPTION WITHIN IT OF THE TECHNOLOGY THAT GOES INTO DETAIL ABOUT HOW THE TECHNOLOGY WORKS?
ELIZABETH A. HOLMES: THERE IS.
MR. DOWNEY: AND IS THIS -- WAS THERE DATA PROVIDED TO THE FDA IN CONNECTION WITH THIS SUBMISSION ABOUT THE PERFORMANCE OF THE SYSTEM IN CONNECTION WITH THE HSV-1 ASSAY?
MR. DOWNEY: AND HOW MANY INDIVIDUALS AT THERANOS WORKED ON COMPILING THE MATERIAL THAT WENT INTO FILING EXHIBIT 13288?
ELIZABETH A. HOLMES: IT WAS A HUGE EFFORT. DOZENS OF SCIENTISTS AND ENGINEERS AT LEAST, AS WELL AS PEOPLE THROUGHOUT THE COMPANY FROM ALMOST EVERY GROUP.
MR. DOWNEY: AND WITH REGARD TO THE PRESENTATION OF DATA THAT IS SET FORTH ABOUT THE PERFORMANCE OF THE 4 SERIES DEVICE, WAS THAT CERTIFIED AS TRUTHFUL AND ACCURATE BY SCIENTISTS AT THERANOS?
ELIZABETH A. HOLMES: IT WAS.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT PAGE 34. 1713. AND IS IT DR. YOUNG WHO PROVIDES THAT CERTIFICATION?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: OKAY. I WANT TO DIRECT YOUR ATTENTION TO JUST A FEW PARTS OF THIS TO HELP US UNDERSTAND WHAT WAS BEING PROVIDED TO THE FDA IN CONNECTION WITH THIS SUBMISSION. IF YOU LOOK FIRST AT PAGE 49, THERE'S A SECTION LABELLED 10.02. AND WE'LL PUT IT UP ON THE SCREEN. AND DO YOU SEE THAT THIS SECTION IS LABELLED "THE THERANOS SYSTEM"?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THEN THERE'S A CHART, OR I SHOULD SAY A DRAWING UNDERNEATH THAT IS LABELLED FIGURE 10-1.
MR. DOWNEY: CAN YOU EXPLAIN WHAT THIS SECTION 10.02 AND THE ACCOMPANYING FIGURE CONVEY?
ELIZABETH A. HOLMES: YES. THIS SECTION GOES THROUGH THE DESIGN OR THE ARCHITECTURE OF THE DESIGN AND ALL OF ITS COMPONENTS. THE DIAGRAM IS SHOWING HOW IT WORKS. SO AT THE TOP, COLLECTING A SAMPLE FROM A SUBJECT; THAT SAMPLE IS PUT INTO A LITTLE NANOTAINER; ONCE THAT IS DONE, THE NANOTAINER IS INSERTED INTO THE CARTRIDGE, WHICH IS INSERTED INTO THE TSPU. AND HERE THIS DIAGRAM IS SHOWING THE BREAKDOWN OF STEPS IN THE TSPU, SO WHAT HAPPENS ON THE ACTUAL DEVICE, AND WHAT HAPPENS THEN IN THE SOFTWARE, THE TLAS, OR THE LAB AUTOMATION SYSTEM, AND IT'S SHOWING THAT THE SAMPLE PREPARATION, THE ADDITION OF CHEMICALS IS HAPPENED ON THE TSPU, BUT THEN ALL OF THE ANALYSIS AND THE OVERSIGHT OF THE MACHINE IS BEING DONE ELECTRONICALLY OR WIRELESSLY THROUGH SOFTWARE THAT SITS IN THE CLOUD.
MR. DOWNEY: OKAY. SO THIS IS BASICALLY A DESCRIPTION OF THE HARDWARE AND THE SOFTWARE SYSTEM AND HOW THEY WORK TOGETHER?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: LET ME -- YOU CAN PUT THAT ASIDE AND LOOK INSTEAD AT PAGE 52, WHICH IS LABELLED 10.03. DO YOU SEE THERE'S A PHOTOGRAPH HERE OF FIGURE 10-2?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THEN THERE'S A LIST OF ITEMS FROM 1 TO 10 BELOW THAT. WHAT IS THIS CONVEYING IN CONNECTION WITH APPLICATION TO THE FDA FOR APPROVAL OF THE 4 SERIES SYSTEM ON HSV-1?
ELIZABETH A. HOLMES: THIS IS AN OVERVIEW OF THE TSPU ITSELF, AND THE TECHNOLOGIES THAT ARE CONTAINED IN IT, LISTING FROM 1 THROUGH 10 HERE, SOME OF THOSE TECHNOLOGIES THAT WE HAVE LOOKED AT BEFORE, THE ROBOT OR THE LIQUID HANDLING MODULE; THE LITTLE MINIATURE CENTRIFUGE AND SONICATOR FOR PROCESSING SAMPLES; THE MAGNET TOOL FOR PROCESSING SAMPLES; AND THEN THESE VARIOUS DETECTORS FOR BEING ABLE TO RUN THE DIFFERENT SMALL SAMPLE METHODS ON THE DEVICE, AS WELL AS THE THERMAL CONTROL SYSTEM FOR HEATING AND COOLING TO BE ABLE TO REACH THE TEMPERATURES THAT WOULD BE NEEDED FOR THIS SMALL SAMPLE CHEMISTRY TO RUN.
MR. DOWNEY: AND WERE THOSE COMPONENTS AMONG THE COMPONENTS IDENTIFIED IN THE DRAWINGS AND PHOTOGRAPHS FROM 2010 THAT WE LOOKED AT LAST WEEK?
ELIZABETH A. HOLMES: THEY ARE.
MR. DOWNEY: LET'S LOOK AT PAGE 54. I JUST WANT TO LOOK AT A FEW OF THOSE COMPONENTS. THIS IS WHAT YOU REFERRED TO A MOMENT AGO AS THE LIQUID HANDLING THE MODULE; IS THAT RIGHT?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND WHAT DOES THAT DO IN CONNECTION WITH THE TEST?
ELIZABETH A. HOLMES: THIS IS THE ROBOT THAT IS CAPABLE OF PICKING UP THE LITTLE COMPONENTS FROM THE CARTRIDGE FOR HANDLING SMALL VOLUMES OF FLUID. THERE'S LITTLE TIPS THAT ATTACH TO IT THAT ALLOW YOU TO SUCK UP VERY SMALL AMOUNTS OF LIQUID, DISPENSE THEM, MIX THEM WITH OTHER LITTLE VOLUMES OF FLUID, AND THEN TRANSPORT THEM TO VARIOUS PLACES IN THE DEVICE TO BE HEATED OR PROCESSED OR READ ON ONE OF THE DETECTERS.
MR. DOWNEY: AND WAS THERE ALSO A CAMERA WITHIN THIS DEVICE?
ELIZABETH A. HOLMES: THERE IS. YES, THERE WAS.
MR. DOWNEY: LET ME ASK TO YOU LOOK AT PAGE 63, COMPONENT NUMBER 11. AND THERE'S A DESCRIPTION THERE, THE MACHINE VISION SYSTEM?
MR. DOWNEY: AND THE FIRST SENTENCE READS, "THE TSPU IS CONFIGURED TO INCLUDE SENSORS WITHIN THE ENCLOSURE FOR THE TLAS TO MONITOR DEVICE STATUS AND OPERATION." THE TLAS IS A REFERENCE TO THE SOFTWARE SYSTEM?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: AND IS THIS OTHERWISE A DESCRIPTION OF CAMERAS WITHIN THE DEVICE?
ELIZABETH A. HOLMES: IT IS. IT'S A DESCRIPTION OF THE CAMERAS, THE THINGS THAT THEY CAN MONITOR AND THEN COMMUNICATE TO THE TLAS TO ENSURE THAT THE SAMPLE IS GOOD AND THAT THE DEVICE IS PERFORMING WELL.
MR. DOWNEY: OKAY. NOW, IN CONNECTION WITH RUNNING AN ASSAY ON THIS DEVICE, ARE THERE PROTOCOLS THAT WERE SUBMITTED TO THE FDA AS PART OF THE REQUEST FOR APPROVAL?
ELIZABETH A. HOLMES: THERE WERE.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT PAGE 70. IT'S BATES LABELLED 1749. THIS IS LABELLED AS THE "PROTOCOL FOR HSV-1 ASSAY (CENTRAL CLIA-LABORATORY MODEL)." DO YOU SEE THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND CAN YOU DESCRIBE WHAT THIS SECTION IS DESCRIBING?
ELIZABETH A. HOLMES: YES. THERE WERE MULTIPLE MODELS THAT WE SUBMITTED TO THE FDA REFLECTIVE OF OUR PHASE I AND OUR PHASE II. SO THIS IS THE PHASE I OF OUR MODEL WHERE THE SAMPLE IS PHYSICALLY SHIPPED TO A CLIA LAB AND THEN THESE ARE THE STEPS ASSOCIATED WITH RUNNING THAT SAMPLE ON THIS DEVICE IN A CLIA LABORATORY.
MR. DOWNEY: AND THEN IF YOU LOOK AT PAGE BATES LABELLED 1752, 10.07.3. CAN YOU DESCRIBE WHAT THIS IS?
ELIZABETH A. HOLMES: YES. THIS IS OUR PHASE II OR FIELD MODEL WHERE WE WERE DESCRIBING WHAT THE STEPS ARE ASSOCIATED WITH A SAMPLE BEING INSERTED INTO THE CARTRIDGE AND THEN PUT INTO THE DEVICE WHEN THE DEVICE IS IN THE FIELD.
MR. DOWNEY: WERE BOTH PROTOCOLS APPROVED AS PART OF THIS APPLICATION?
ELIZABETH A. HOLMES: THEY WERE.
MR. DOWNEY: OKAY. LET'S GO BACK TO 2016. WHEN WAS THIS APPROVAL GRANTED?
ELIZABETH A. HOLMES: THIS APPROVAL WAS GRANTED IN 2015.
MR. DOWNEY: OKAY. AND DID YOU VIEW THAT AS RELATING TO POSSIBLE IMPLEMENTATION OF PHASE II?
MR. DOWNEY: HOW LONG AFTER THAT APPROVAL DID THE CMS INSPECTION THAT WE'VE DISCUSSED BEGIN?
ELIZABETH A. HOLMES: I THINK JUST OVER A MONTH.
MR. DOWNEY: OKAY. NOW, IF WE RETURN TO 2016, WE WERE TALKING ABOUT THE COMPANY'S CHANGE IN BUSINESS STRATEGY. DO YOU ALSO RECALL THAT THERE WAS TESTIMONY DURING THE COURSE OF THE CASE FROM VARIOUS INDIVIDUALS SAYING THAT THEY THOUGHT IT WOULD BE A GOOD IDEA FOR THERANOS TO HAVE ITS TECHNOLOGY REVIEWED BY ACADEMIC INSTITUTIONS OR PEER REVIEWED OR LOOKED AT BY SOME OTHER THIRD PARTY? DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND OVER THE COURSE OF TIME, HAD THERANOS'S TECHNOLOGY BEEN LOOKED AT BY THIRD PARTIES?
MR. DOWNEY: HOW MANY THIRD PARTIES HAD LOOKED AT THERANOS'S TECHNOLOGY DURING THE YEARS BETWEEN 2006 AND 2016?
ELIZABETH A. HOLMES: DOZENS.
MR. DOWNEY: BUT DID YOU TRY TO TAKE STEPS TO RESPOND TO ADVICE ABOUT MAKING THERANOS MORE TRANSPARENT WITH RESPECT TO ITS TECHNOLOGY?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND DO YOU RECALL THAT THERE WAS TESTIMONY ABOUT AN APPEARANCE THAT YOU MADE AT A CONFERENCE CALLED THE AACC CONFERENCE? DO YOU REMEMBER THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WHAT IS THE AACC CONFERENCE?
ELIZABETH A. HOLMES: IT'S THE BIG ANNUAL CONFERENCE FOR THE AMERICAN ASSOCIATION OF CLINICAL CHEMISTRY.
MR. DOWNEY: AND WERE YOU INVITED TO GIVE A PRESENTATION ABOUT THERANOS'S TECHNOLOGY AT THAT CONFERENCE?
ELIZABETH A. HOLMES: I WAS.
MR. DOWNEY: AND WHEN DID THAT CONFERENCE TAKE PLACE?
ELIZABETH A. HOLMES: IN 2016.
MR. DOWNEY: AND WHY DID YOU CHOOSE THAT FORUM AS A FORUM WITHIN WHICH TO DISCUSS THERANOS'S TECHNOLOGY IN THE MONTHS AFTER THERE WAS MEDIA AND REGULATORY CRITICISM?
ELIZABETH A. HOLMES: BECAUSE THERE HAD BEEN A LOT OF HOSTILE COMMENTARY ABOUT THERANOS FROM THE LABORATORY INDUSTRY AND THIS WAS THE LABORATORY INDUSTRY'S MAIN CONFERENCE, SO WE WANTED TO GO THERE AND PRESENT OUR DATA DIRECTLY.
MR. DOWNEY: AND DID YOU, IN FACT, DO THAT?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND DID OTHER THERANOS EMPLOYEES PARTICIPATE WITH YOU IN GIVING THAT PRESENTATION?
MR. DOWNEY: DO YOU REMEMBER ALL OF THE THERANOS EMPLOYEES WHO WERE PART OF THAT PRESENTATION?
ELIZABETH A. HOLMES: IT WAS A VERY BIG TEAM WITHIN THERANOS THAT WORKED FOR MONTHS ON THE STUDIES FOR THAT PRESENTATION AND THE ASSOCIATED DATA.
MR. DOWNEY: WELL, LET ME ASK YOU TO LOOK AT EXHIBIT 10677.
ELIZABETH A. HOLMES: OKAY. I SEE IT. OKAY.
MR. DOWNEY: IS 10677 A PHOTOGRAPH OF YOU AND OTHERS FROM THERANOS AT THE AACC CONFERENCE IN 2016?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: MOVE TO ADMIT 10677.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 10677 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND IF YOU WOULD JUST LOOK. SOME OF THESE INDIVIDUALS ARE INDIVIDUALS WHO WORK AT THERANOS?
MR. DOWNEY: OR WHO WORKED AT THERANOS AT THAT TIME. CAN YOU JUST IDENTIFY WHO THAT IS?
ELIZABETH A. HOLMES: I'M SITTING IN THE MIDDLE, AND TO MY LEFT IS DR. YOUNG, AND THEN DR. ANEKAL, AND DR. PANGARKAR.
MR. DOWNEY: AND CAN YOU REMIND US WHAT DR. ANEKAL'S WORK WAS AT THERANOS?
ELIZABETH A. HOLMES: YES. DR. ANEKAL RAN SYSTEMS INTEGRATION AND VALIDATION AND VERIFICATION FOR THERANOS.
MR. DOWNEY: AND AS OF THIS TIME, WHAT WAS DR. PANGARKAR'S ROLE AT THERANOS?
ELIZABETH A. HOLMES: DR. PANGARKAR RAN BOTH OUR IMMUNOASSAY TEAM, AS WELL AS OUR CYTOMETRY TEAM.
MR. DOWNEY: AND DID DR. YOUNG REMAIN THE HEAD OF RESEARCH AND DEVELOPMENT AT THIS TIME?
MR. DOWNEY: AND WAS THERE INTERACTION BETWEEN THE THERANOS EMPLOYEES AND CRITICS OF THERANOS IN THIS FORUM?
MR. DOWNEY: AND DID THERANOS ALSO OPEN UP ITS TECHNOLOGY AND PRESENT, BY MEANS OF A PRESENTATION, WHAT WAS INSIDE SO THAT IT COULD BE SEEN BY THIRD PARTIES?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: YOUR HONOR, I'M GOING TO SHOW MS. HOLMES A SINGLE SLIDE FROM A LARGER POWERPOINT. I ONLY WANT TO ADMIT THE SINGLE SLIDE, WHICH IS 7673A, BUT IT IS PART OF A LARGER PRESENTATION. FOR COMPLETENESS, I'VE INCLUDED IN YOUR BINDER THE FULL PRESENTATION, BUT I'M ONLY INTERESTED IN PAGE 52.
JUDGE DAVILA: IT'S 7673 DID YOU SAY?
MR. DOWNEY: 7673A IT'S DESIGNATED.
ELIZABETH A. HOLMES: WHAT BINDER IS THAT?
MR. DOWNEY: IT SHOULD BE IN THE THINNER BINDER, THE BINDER THAT IS LABELLED AS VOLUME 4.
ELIZABETH A. HOLMES: OKAY. GOT IT.
JUDGE DAVILA: MR. LEACH?
MR. LEACH: I'M SORRY, WHICH PAGE?
MR. DOWNEY: IT'S PAGE 52 OF THE POWERPOINT.
MR. LEACH: NO OBJECTION.
JUDGE DAVILA: PAGE 52 OF 7673A IS ADMITTED.
(DEFENDANT'S EXHIBIT 7673A, PAGE 52 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND CAN YOU TELL US WHAT THIS DIAGRAM DEPICTS?
ELIZABETH A. HOLMES: YES. THIS IS THE 4 SERIES MINILAB AND ALL OF THE COMPONENTS IN IT BLOWN UP SO THAT YOU CAN SEE EACH OF THE INDIVIDUAL COMPONENTS.
MR. DOWNEY: OKAY. AND IN ADDITION TO THE AACC CONFERENCE, WAS THERANOS ALSO WORKING TO HAVE ITS TECHNOLOGY EVALUATED IN OTHER FORUMS IN RESPONSE TO THE CRITICISMS THAT HAD BEEN RAISED?
ELIZABETH A. HOLMES: WE WERE.
MR. DOWNEY: AND DID THERANOS APPOINT A TECHNOLOGY ADVISORY BOARD?
MR. DOWNEY: AND WHAT WAS THE TECHNOLOGY ADVISORY BOARD?
ELIZABETH A. HOLMES: THEY WERE MEMBERS OF THE NATIONAL ACADEMY OF ENGINEERING AND OTHER ENGINEERING LEADERS WHO CAME TOGETHER TO HELP OVERSEE OUR PRODUCT DEVELOPMENT EFFORTS AND THE PUBLICATION OF DATA ON THE TECHNOLOGY.
MR. DOWNEY: DID DR. ROBERTSON PLAY A ROLE WITH REGARD TO THE TECHNOLOGY ADVISORY BOARD?
ELIZABETH A. HOLMES: HE DID.
MR. DOWNEY: AND WHAT ROLE DID HE PLAY?
ELIZABETH A. HOLMES: HE WAS ONE OF THE CO-CHAIRS.
MR. DOWNEY: AND DO YOU KNOW WHAT INFORMATION WAS PRESENTED TO THE MEMBERS OF THAT TECHNOLOGY ADVISORY BOARD?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 7680?
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: IS THIS AN EMAIL FROM DR. ROBERTSON THAT YOU AND OTHERS RECEIVED IN 2016 ABOUT THE TECHNOLOGY ADVISORY BOARD?
ELIZABETH A. HOLMES: IT IS.
MR. DOWNEY: I MOVE THE ADMISSION OF 7680.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7680 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: DO YOU SEE IN THE FIRST SENTENCE THAT MR. ROBERTSON WAS IDENTIFYING PEOPLE THAT HE THOUGHT WOULD BE APPROPRIATE FOR THE TECHNOLOGY ADVISORY BOARD?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND THEN IF YOU GO TO THE PARAGRAPH BELOW THAT, HE DESCRIBES WHAT SHOULD BE PROVIDED TO THOSE INDIVIDUALS. DO YOU SEE THAT?
MR. DOWNEY: AND DO YOU SEE IN THE -- THERE'S A LIST OF FOUR ITEMS THERE?
MR. DOWNEY: AND DO YOU SEE THAT THE SECOND ITEM WAS "DETAILED TECHNICAL PRESENTATIONS"?
MR. DOWNEY: DO YOU SEE THAT? AND THAT'S ALSO -- HE'S SUGGESTING THAT FROM DR. ANEKAL, DR. YOUNG, AND DR. PANGARKAR?
MR. DOWNEY: AND THEN HE SUGGESTS THAT THE RESEARCH AND DEVELOPMENT LABS IN THE CLIA LAB BE TOURED BY THOSE INDIVIDUALS?
MR. DOWNEY: AND WAS A GROUP LIKE THIS FORMED AND CONTINUED TO PROVIDE ADVICE TO THERANOS IN CONNECTION WITH ITS TECHNOLOGY?
ELIZABETH A. HOLMES: IT WAS.
MR. DOWNEY: NOW, DO YOU RECALL THAT AT THE END OF MR. EDLIN'S TESTIMONY, HE TESTIFIED THAT HE HAD LEFT THERANOS BECAUSE HE FELT THAT THERANOS WAS NOT GOING TO BE ABLE TO MAKE SHOWINGS TO ANY THIRD PARTIES THAT SUBSTANTIATED ITS CLAIMS ABOUT ITS TECHNOLOGY?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: I'D LIKE TO ASK YOU, DURING THE PERIOD DURING WHICH THERANOS WAS RESPONDING TO CRITICISM FROM THE MEDIA AND CRITICISM FROM REGULATORS, DID THERANOS SUBMIT PAPERS TO PEER REVIEWED PUBLICATIONS TO REVIEW ITS TECHNOLOGY AND THE FUNCTIONALITY AND EFFECTIVENESS OF ITS TECHNOLOGY?
ELIZABETH A. HOLMES: WE DID.
MR. DOWNEY: AND WERE SOME OF THOSE PAPERS THE RESULT OF COLLABORATIONS BETWEEN THERANOS AND SOME OUTSIDE THIRD PARTY?
MR. DOWNEY: AND IN SOME CASES WERE THEY ACADEMIC INSTITUTIONS?
MR. DOWNEY: AND IN SOME CASES WERE THEY INDUSTRY PERSONNEL?
MR. DOWNEY: AND WERE THERE OTHER MANUSCRIPTS RELATED TO THERANOS'S TECHNOLOGY THAT WERE SUBMITTED FOR PUBLICATION TO VARIOUS PROFESSIONAL JOURNALS?
MR. DOWNEY: I'D LIKE TO ASK YOU TO LOOK AT EXHIBIT 7719.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: CAN YOU TELL US WHAT 7719 IS?
ELIZABETH A. HOLMES: YES. THIS IS A PEER REVIEWED PAPER ON THE MINILAB THAT WAS WRITTEN FOLLOWING A NUMBER OF STUDIES SHOWING THE MINILAB'S CAPABILITY TO PERFORM EACH OF THE DIFFERENT FOUR METHODS THAT WE'VE TALKED ABOUT.
MR. DOWNEY: AND WHERE WAS THIS STUDY PUBLISHED?
ELIZABETH A. HOLMES: IT WAS PUBLISHED IN A JOURNAL CALLED "ALCHEMY." IT'S A BIO ENGINEERING AND MEDICINE TRANSITION JOURNAL.
MR. DOWNEY: AND DO YOU KNOW WHAT THIS STUDY CONCLUDED WITH REGARD TO THERANOS TECHNOLOGY?
MR. LEACH: YOUR HONOR, OBJECTION. HEARSAY. 401 AND 403 BASED ON THE DATES AT THE TOP. AND IF WE'RE GOING TO HAVE TESTIMONY ABOUT THIS, WE SHOULD ADMIT THE DOCUMENT.
MR. DOWNEY: WELL, I'LL MOVE TO ADMIT THE DOCUMENT.
JUDGE DAVILA: I'M SORRY?
MR. DOWNEY: I'LL MOVE TO ADMIT THE DOCUMENT.
MR. LEACH: 401, 403, RELEVANCE.
JUDGE DAVILA: AS TO THE ADMISSION OF THE DOCUMENT?
MR. LEACH: YES, FOR THE SUBSTANCE OF IT.
JUDGE DAVILA: IS THIS GOING TO THE ISSUE OF WHETHER OR NOT PEER REVIEWED PAPERS WERE ADMITTED AND THAT ISSUE ONLY, AS OPPOSED TO THE CONTENT? YOU ASKED THIS WITNESS, I THINK THE LAST QUESTION WAS, WELL, WHAT WAS THE OPINION OF THE PAPER?
MR. DOWNEY: WELL, I THINK THE TESTIMONY THAT THIS PAPER WAS RESPONSIVE TO IS THAT THERANOS COULD NOT PARTICIPATE IN A PEER REVIEWED STUDY THAT WOULD SHOW THE EFFECTIVENESS OF ITS TECHNOLOGY. I THINK I'M DESIGNED TO -- OR ALLOWED TO REBUT THAT.
JUDGE DAVILA: WELL, I'LL PERMIT YOU TO ADMIT THIS FOR PURPOSES OF FOLLOWING UP ON YOUR QUESTION OF WHETHER OR NOT PEER REVIEW WAS PROVIDED, THE PAPER WAS SUBMITTED. I THINK THAT WAS YOUR QUESTION.
MR. DOWNEY: WELL, I DID ASK IF IT WAS SUBMITTED. AND I ALSO, IN FAIRNESS, YOUR HONOR, ASKED IF IT WAS PUBLISHED, AND MS. HOLMES DID TESTIFY THAT IT WAS PUBLISHED. SO I DID ELICIT, WITHOUT OBJECTION, THAT TESTIMONY.
JUDGE DAVILA: RIGHT. RIGHT. SO THAT CAN COME IN. I'M GOING TO SUSTAIN THE OBJECTION AS TO THE OPINION. IT'S NOT OFFERED FOR THE TRUTH OF THE MATTER ASSERTED AT THAT POINT, BUT TO PROVE THAT THERE WERE PEER REVIEWED DOCUMENTS SUBMITTED. SO IT'S ADMITTED FOR THAT LIMITED PURPOSE, LADIES AND GENTLEMEN, NOT FOR THE TRUTH OF THE MATTER ASSERTED IN THE PAPER.
(DEFENDANT'S EXHIBIT 7719 WAS RECEIVED IN EVIDENCE FOR A LIMITED PURPOSE.)
BY MR. DOWNEY:
MR. DOWNEY: AND JUST IF WE TAKE A LOOK AT 7719 FOR A MOMENT. DO YOU SEE THIS IS THE PUBLICATION HEADED "ENGINEERING OF A MINIATURIZED, ROBOTIC CLINICAL LABORATORY"?
MR. DOWNEY: AND DO YOU RECOGNIZE SOME OF THE NAMES OF SOME OF THE SCIENTISTS LISTED UNDERNEATH AS INDIVIDUALS WHO WORKED AT THERANOS?
ELIZABETH A. HOLMES: THEY ARE.
MR. DOWNEY: AND WERE THERE INDIVIDUALS WHO ALSO DID NOT WORK AT THERANOS WHO TOOK PART IN THE PUBLICATION OF THIS -- IN THE WORK THAT LED TO THIS SUBMISSION?
MR. DOWNEY: AND WHERE WERE THE OTHER INDIVIDUALS FROM?
ELIZABETH A. HOLMES: I BELIEVE THEY WERE COLLABORATORS WHO RAN THE STUDIES OR HELPED US WITH THE STUDIES THAT WERE IN THIS PROGRAM. I WOULD NEED TO LOOK AT IT TO FIND THEM.
MR. DOWNEY: WE'LL DO THE FOOTNOTES LATER ON. IT'S NOT THAT IMPORTANT, MS. HOLMES. I DON'T MEAN TO OPPRESS YOU, BUT IT'S WITHIN THE DOCUMENT, SO IF WE NEED THAT, WE CAN GET TO IT. LET ME ASK YOU NEXT TO LOOK AT EXHIBIT 7718. CAN YOU IDENTIFY -- THAT SHOULD ALSO BE IN THE SMALLER NOTEBOOK THAT I GAVE YOU --
MR. DOWNEY: -- TODAY.
ELIZABETH A. HOLMES: I HAVE IT.
MR. DOWNEY: AND IS THIS ALSO -- WELL, CAN YOU IDENTIFY 7718?
ELIZABETH A. HOLMES: YES. IT'S A PEER REVIEWED PUBLICATION IN "THE JOURNAL OF VIROLOGICAL METHODS" THAT WE PUBLISHED.
MR. DOWNEY: SUBJECT TO YOUR HONOR'S PRIOR RESTRICTION ON THE PRIOR EXHIBIT, I MOVE TO ADMIT 7718.
MR. LEACH: SAME OBJECTIONS, YOUR HONOR. HEARSAY, 401, 403.
JUDGE DAVILA: ALL RIGHT. THANK YOU. I'LL ALLOW IT TO BE ADMITTED. IT GOES TO THE PREVIOUS QUESTION THAT WAS ASKED REGARDING PEER REVIEWS. IT'S NOT OFFERED FOR THE TRUTH OF THE MATTER ASSERTED, LADIES AND GENTLEMEN, AND IT IS OTHERWISE ADMISSIBLE UNDER A 403 ANALYSIS. IT DOES PROVE UP THE POINT THAT THE QUESTION ASKS, SO I'LL ALLOW IT, NOT FOR THE TRUTH OF THE MATTER ASSERTED, BUT JUST AS TO THE ISSUE OF PEER REVIEWED DOCUMENTS THAT WERE SUBMITTED.
(DEFENDANT'S EXHIBIT 7718 WAS RECEIVED IN EVIDENCE FOR A LIMITED PURPOSE.)
BY MR. DOWNEY:
MR. DOWNEY: AND IF WE CAN JUST DISPLAY THE FIRST PAGE OF 7718. CAN YOU EXPLAIN WHAT THIS PEER REVIEWED WORK WAS?
MR. DOWNEY: AND WHAT WAS IT?
ELIZABETH A. HOLMES: THIS IS A PAPER ON SOME OF THE CHEMICALS THAT WE DEVELOPED FOR USE IN OUR SMALL SAMPLE TEST METHODS. SO WE WOULD ACTUALLY MAKE MANY OF THE CHEMICALS THAT WOULD GO INTO THE SMALL SAMPLE TESTS THEMSELVES IN ORDER TO REALIZE BETTER TEST PERFORMANCE, AND THIS IS A PAPER ON A TEST FOR HSV-2 SHOWING THE PERFORMANCE OF THESE CHEMICALS OR REAGENTS NEXT TO COMMERCIALLY AVAILABLE CHEMICALS.
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK NEXT IN THE SAME THIN NOTEBOOK AT 7695.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: DO YOU RECOGNIZE EXHIBIT 7695?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND WHAT IS 7695?
ELIZABETH A. HOLMES: IT'S A PEER REVIEWED PAPER IN A JOURNAL CALLED "CUREUS" ABOUT SOME OF OUR ALGORITHMS AND INFORMATICS USED IN OUR SYSTEMS.
MR. DOWNEY: YOUR HONOR, I MOVE 7695.
MR. LEACH: SAME OBJECTIONS, YOUR HONOR.
JUDGE DAVILA: THANK YOU. I'LL OVERRULE THE OBJECTION. THIS IS ADMITTED NOT FOR THE TRUTH OF THE MATTER ASSERTED, LADIES AND GENTLEMEN, BUT AS EVIDENCE OF THE PREVIOUS QUESTION WHETHER OR NOT PEER REVIEWED PAPERS WERE SUBMITTED, AND UNDER 403 THIS IS MORE PROBATIVE OF THAT ISSUE. SO IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 7695 WAS RECEIVED IN EVIDENCE FOR A LIMITED PURPOSE.)
BY MR. DOWNEY:
MR. DOWNEY: IF WE CAN LOOK BRIEFLY AT THE FIRST PAGE OF THIS STUDY. ARE THERE THERANOS SCIENTISTS LISTED IN THE AUTHOR LINE OF THIS PAPER?
MR. DOWNEY: AND WHAT JOURNAL WAS THIS PUBLISHED IN?
ELIZABETH A. HOLMES: "CUREUS."
MR. DOWNEY: AND WHAT IS "CUREUS"?
ELIZABETH A. HOLMES: IT'S AN OPEN ACCESS JOURNAL THAT PUBLISHES TECHNICAL PAPERS.
MR. DOWNEY: LET ME ASK YOU TO LOOK NEXT AT -- WELL, LET ME ASK YOU, IN CONNECTION WITH SOME OTHER WORK THAT THERANOS WAS DOING TO DEMONSTRATE ITS TECHNOLOGY, DID THERANOS SUBMIT SOME PAPERS, PREPARE PAPERS AS A RESULT OF STUDIES THAT ENDED UP NOT BEING PUBLISHED?
MR. DOWNEY: AND DID ONE OF THOSE PAPERS RELATE TO A COLLABORATION BETWEEN UCSF AND THERANOS?
MR. DOWNEY: LET ME ASK YOU TO LOOK AT EXHIBIT 7717.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: ARE YOU ABLE TO IDENTIFY THAT?
MR. DOWNEY: AND WHAT IS IT?
ELIZABETH A. HOLMES: THIS IS A SUBMISSION FOR PEER REVIEW FROM A STUDY THAT WAS RUN BY UCSF ON THE PERFORMANCE OF THERANOS'S MINILAB COMPARED TO UCSF'S LABORATORY AND ANOTHER LABORATORY.
MR. DOWNEY: OKAY. YOUR HONOR, I MOVE THE ADMISSION OF 7717.
MR. LEACH: YOUR HONOR, THIS IS FROM 2017. WE OBJECT ON RELEVANCE, 403, AND HEARSAY.
JUDGE DAVILA: IS THIS -- YOU PREVIOUSLY ASKED WHETHER PAPERS WERE SUBMITTED FOR PEER REVIEW.
MR. DOWNEY: YES.
JUDGE DAVILA: AND WAS THIS SUBMITTED ALSO FOR PEER REVIEW?
MR. DOWNEY: IT WAS, YES, I BELIEVE SO.
JUDGE DAVILA: ALL RIGHT. BUT IT SOUNDS LIKE IT WAS REJECTED.
MR. DOWNEY: WELL, IT WASN'T REJECTED, BUT IT WASN'T --
JUDGE DAVILA: WHY DON'T YOU CLEAR THAT UP FOR ME? I'M NOT -- I'M SORRY.
MR. DOWNEY: YEAH, IT WAS NOT REJECTED. IT WAS JUST -- IT WAS SUBMITTED, BUT IT WAS NOT PUBLISHED IN A PUBLICATION.
JUDGE DAVILA: SO THERE WAS NO ACTION TAKEN ON THIS?
MR. DOWNEY: NO ACTION, NO.
JUDGE DAVILA: SO THE RELEVANCE OF THIS IS?
MR. DOWNEY: WELL, WE WERE WILLING TO MAKE THE TECHNOLOGY AVAILABLE TO THE UNIVERSITY THAT ONE OF THE INVESTORS IN THIS CASE --
JUDGE DAVILA: SO THIS IS A DOCUMENT THAT IS ANOTHER DOCUMENT OF A PEER REVIEWED ARTICLE THAT WAS SUBMITTED?
MR. DOWNEY: THAT'S CORRECT.
JUDGE DAVILA: FOR THAT PURPOSE ONLY?
MR. DOWNEY: YES.
JUDGE DAVILA: I'LL ADMIT IT FOR THAT LIMITED PURPOSE, LADIES AND GENTLEMEN. THIS IS ANOTHER PAPER, PEER REVIEWED PAPER THAT WAS SUBMITTED. IT'S NOT OFFERED FOR THE TRUTH OF ANY OF THE MATTER ASSERTED IN THE PAPER.
(DEFENDANT'S EXHIBIT 7717 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND IN ADDITION TO SUBMITTING MATTERS FOR A PEER REVIEW, DID THERANOS ALSO MAKE ADDITIONAL PRESENTATIONS ABOUT ASPECTS OF ITS TECHNOLOGY AT PROFESSIONAL CONFERENCES?
MR. DOWNEY: AND I'D LIKE TO ASK YOU TO LOOK AT EXHIBITS 7690 AND 7693.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: AND ARE THEY DOCUMENTS WITH WHICH YOU'RE FAMILIAR?
ELIZABETH A. HOLMES: THEY ARE.
MR. DOWNEY: AND WHAT IS EXHIBIT 7690?
ELIZABETH A. HOLMES: IT IS A POSTER FROM A SCIENTIFIC CONFERENCE ON THE ZIKA TEST THAT RAN ON MINILAB AS COMPARED TO TRADITIONAL METHODS.
MR. DOWNEY: AND WHAT IS 7693?
ELIZABETH A. HOLMES: IT IS ANOTHER POSTER ON THE CHEMISTRY FOR THE SMALL SAMPLE MEASUREMENT OF ZIKA.
MR. DOWNEY: OKAY. YOUR HONOR, I MOVE THE ADMISSION OF 7690 AND 7693.
MR. LEACH: SAME OBJECTIONS, YOUR HONOR. HEARSAY, RELEVANCE, 403.
JUDGE DAVILA: I THINK THERE'S A LACK OF FOUNDATION ON THESE, SO I'LL SUSTAIN THE OBJECTION.
MR. DOWNEY: OKAY. ALL RIGHT.
MR. DOWNEY: MS. HOLMES, I WANT TO TALK ABOUT YOUR OWN OWNERSHIP OF SHARES WHILE YOU WERE AT THERANOS IN A MINUTE, BUT BEFORE I DO THAT, I WANT TO ASK YOU ABOUT A COUPLE OF ITEMS THAT WE DISCUSSED LAST WEEK. DO YOU RECALL THAT WE WERE TALKING ABOUT THE RELATIONSHIP BETWEEN THERANOS AND SAFEWAY?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND DO YOU RECALL THAT YOU TESTIFIED THAT AT SOME POINT AFTER MR. BURD LEFT, YOU BECAME LESS INVOLVED WITH THAT RELATIONSHIP?
MR. DOWNEY: I'D LIKE TO JUST ASK YOU TO LOOK AT EXHIBIT 15027.
ELIZABETH A. HOLMES: WHICH BINDER IS THAT IN?
MR. DOWNEY: THAT SHOULD BE, I BELIEVE, IN THE LARGER BINDER THAT YOU HAVE?
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: VOLUME 3.
ELIZABETH A. HOLMES: OKAY.
MR. DOWNEY: IS THIS AN EMAIL FROM MR. BALWANI TO YOU ABOUT THE SAFEWAY RELATIONSHIP?
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 15027.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED.
(DEFENDANT'S EXHIBIT 15027 WAS RECEIVED IN EVIDENCE.)
MR. DOWNEY: AND IF WE CAN JUST DISPLAY THAT FOR A MOMENT.
MR. DOWNEY: DO YOU SEE THAT THIS EMAIL IS DATED MARCH 13TH OF 2014? HAD MR. BALWANI TAKEN OVER PRINCIPAL -- BEING THE PRINCIPAL INTERFACE WITH SAFEWAY BY THIS DATE?
ELIZABETH A. HOLMES: HE HAD.
MR. DOWNEY: AND THERE'S A REFERENCE HERE TO BOB GORDON AT SAFEWAY. DO YOU SEE THAT?
MR. DOWNEY: AND DID YOU UNDERSTAND THAT BOB GORDON WAS HIS -- HAD BECOME HIS PRIMARY CONTACT?
MR. DOWNEY: OKAY. WE CAN PUT THAT ASIDE. WE SPOKE ALSO LAST WEEK ABOUT THE THERANOS BOARD OF DIRECTORS IN 2013 AND '14, AND YOU MENTIONED SECRETARY SHULTZ'S ROLE WITH REGARD TO THAT BOARD.
MR. DOWNEY: AND I BELIEVE YOU TESTIFIED THAT HE WOULD COMMUNICATE WITH YOU IN SOME INSTANCES ORALLY; IS THAT RIGHT?
MR. DOWNEY: AND IN SOME INSTANCES WOULD HE COMMUNICATE WITH YOU BY LETTER?
MR. DOWNEY: I WANT TO ASK YOU TO TAKE A LOOK AT 15035.
ELIZABETH A. HOLMES: GOT IT.
MR. DOWNEY: AND DO YOU RECOGNIZE 15035?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND COULD YOU TELL US WHAT 15035 IS?
ELIZABETH A. HOLMES: IT'S A LETTER FROM MR. SHULTZ ASKING ME TO MEET WITH SOMEONE FROM JAPAN ABOUT DEPLOYING OUR SYSTEMS IN JAPAN.
MR. DOWNEY: OKAY. AND I JUST WANT TO ASK IF COMMUNICATIONS FROM MR. SHULTZ TO YOU BY LETTER WERE FREQUENT?
ELIZABETH A. HOLMES: THEY WERE.
MR. DOWNEY: AND WHAT SUBJECT MATTERS WOULD THEY COVER?
ELIZABETH A. HOLMES: THEY WOULD COVER TOPICS LIKE THIS WHERE MR. SHULTZ THOUGHT THAT WE SHOULD BE FOCUSSED ON INTERNATIONAL EXPANSION, INTERNATIONAL OPPORTUNITIES AND MEETING WITH PEOPLE FROM DIFFERENT COUNTRIES TO BE ABLE TO PURSUE THAT. THEY WOULD FOCUS ON OUR BOARD MEETINGS AND TOPICS HE THOUGHT SHOULD BE COVERED IN THE BOARD MEETINGS WHERE HE THOUGHT WE SHOULD FOCUS IN THOSE MEETINGS. THEY WOULD BE FOCUSSED ON MEETINGS HE WAS OTHERWISE HAVING OR TRIPS HE WAS TAKING THAT HE WOULD WANT ME TO JOIN OR PRESENT ON, AND ON EVENTS HE WAS HOSTING WHERE HE WOULD ASK ME TO COME AND MEET WITH CERTAIN PEOPLE.
MR. DOWNEY: OKAY. LET ME TURN NOW TO TALKING ABOUT JUST ONE INVESTOR WHO WE TOUCHED ON ONLY BRIEFLY, WHICH IS THE RDV INVESTOR.
MR. DOWNEY: THAT WAS THE INVESTMENT VEHICLE FOR THE DEVOS FAMILY. DO YOU RECALL THAT?
ELIZABETH A. HOLMES: I DO.
MR. DOWNEY: AND I BELIEVE THERE WAS TESTIMONY FROM MS. PETERSON TO THE EFFECT OF IN YOUR FIRST CONVERSATION THAT SHE PARTICIPATED IN WITH YOU THAT THERE WAS A DISCUSSION OF YOUR VISION FOR THERANOS.
MR. DOWNEY: AND WAS THERE A -- WAS THE DISCUSSION OF YOUR VISION A SUBJECT OF CONVERSATION BETWEEN INVESTORS AND YOURSELF IN SITUATIONS OTHER THAN WITH MS. PETERSON AND MR. TUBERGEN?
MR. DOWNEY: AND WHAT WOULD YOU TYPICALLY -- DID YOU HAVE THINGS YOU WOULD TYPICALLY SAY ABOUT THERANOS AND YOUR VISION FOR IT IN THOSE MEETINGS?
MR. DOWNEY: AND WHAT WOULD YOU TYPICALLY TALK ABOUT WITH RESPECT TO YOUR VISION FOR THERANOS WHEN YOU WERE ASKED BY POTENTIAL INVESTORS TO DISCUSS YOUR VISION?
ELIZABETH A. HOLMES: I WOULD TALK ABOUT HOW WE COULD CHANGE PEOPLE'S ACCESS TO TESTING, AND THAT IF PEOPLE COULD GET BETTER ACCESS TO TESTING, WE COULD MAKE EARLY DETECTION OF DISEASE MORE OF A REALITY. I WOULD TALK ABOUT THE COMPANY TENETS TO ACCESS, CHANGING THE COST OF TESTING, CHANGING THE CONVENIENCE OF TESTING, CHANGING PEOPLE'S ACCESS TO AND OWNERSHIP OF THEIR OWN HEALTH DATA, CHANGING WHAT IT MEANT TO GET A BLOOD DRAW AND BEING ABLE TO MAKE THAT EXPERIENCE A WONDERFUL ONE. AND I WOULD TALK ABOUT THE TECHNOLOGIES THAT WE INVENTED TO DO THAT, HOW IT WOULD CHANGE PEOPLE'S ACCESS TO TESTING.
MR. DOWNEY: AND DID YOU SOMETIMES TALK ABOUT HOW A PLAN MIGHT BE IMPLEMENTED TO MAKE TESTING MORE ACCESSIBLE?
MR. DOWNEY: DOES THAT INCLUDE SOME OF THE SLIDES THAT WE LOOKED AT WHERE THERE WAS A DESCRIPTION OF THERANOS BEING WITHIN A -- SOME NUMBER OF MILES OF EVERY AMERICAN WHO MIGHT NEED BLOOD TESTING SERVICES?
ELIZABETH A. HOLMES: IT DOES.
MR. DOWNEY: AND IS IT FAIR TO SAY THAT DURING THOSE CONVERSATIONS YOU WOULD TALK A LOT ABOUT WHERE YOU THOUGHT THERANOS COULD TAKE HEALTH CARE IN THE FUTURE?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: AND DID YOU TALK ABOUT HOW THERANOS'S TECHNOLOGY MIGHT OVER TIME DECREASE OR INCREASE AUTOMATION DURING THE PROCESS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: NOW, YOU ALSO HAVE USED A PHRASE TALKING TODAY, AND ONCE EARLIER, CALLED THE LONGITUDINAL IMPACT OF THERANOS'S TESTING. CAN YOU EXPLAIN WHAT THAT MEANS?
ELIZABETH A. HOLMES: YES. WHAT I WAS TALKING ABOUT WAS THE ABILITY TO LOOK AT LAB DATA OVER TIME AND HOW IT CHANGES, THE IDEA BEING THAT IF YOU COULD SEE A TIME SERIES OR A TREND, YOU COULD START TO GET INSIGHT INTO WHERE SOMEONE'S HEALTH WAS HEADED. AND IF YOU COULD SEE THAT EARLY ENOUGH, YOU COULD DO SOMETHING ABOUT IT.
MR. DOWNEY: OKAY. LET ME ASK YOU ABOUT YOUR OWNERSHIP OF SHARES IN THERANOS AS A COMPANY. WHEN THERANOS WAS VALUED FOR THE OFFERING OF SHARES TO INVESTORS IN 2014, WHAT WAS THE VALUATION ATTRIBUTED TO THE COMPANY?
ELIZABETH A. HOLMES: $9 BILLION.
MR. DOWNEY: WHAT PERCENTAGE OF SHARES DID YOU OWN IN THE COMPANY AT THAT TIME?
ELIZABETH A. HOLMES: I THINK CLOSE TO 50 PERCENT.
MR. DOWNEY: WHAT WAS YOUR NET WORTH ON PAPER AS A RESULT OF THAT?
ELIZABETH A. HOLMES: IT WOULD HAVE BEEN 4 AND A HALF BILLION DOLLARS.
MR. DOWNEY: DID YOU HAVE OPPORTUNITIES DURING THE TIME THAT YOU WERE RUNNING THERANOS TO SELL YOUR STOCK IN THERANOS?
ELIZABETH A. HOLMES: I DID.
MR. DOWNEY: WERE THERE INSTANCES DATING BACK TO THE EARLY YEARS OF THE COMPANY WHERE THAT WAS TRUE?
MR. DOWNEY: AND CAN YOU DESCRIBE SOME OF THE INSTANCES WHERE YOU HAD AN OPPORTUNITY TO SELL SHARES IN THE COMPANY?
ELIZABETH A. HOLMES: YES. SOME OF OUR BOARD MEMBERS WOULD BE INTERESTED IN BRINGING IN NEW SHAREHOLDERS OR INVESTORS AND WOULD ASK IF I WOULD SELL SOME OF MY SHARES TO THOSE PEOPLE TO BE ABLE TO BRING IN NEW INVESTORS. IN CERTAIN CASES, SOME OF OUR BOARD MEMBERS WANTED TO DO TENDER OFFERS OR BUY BACKS IN WHICH THEY WOULD SUGGEST THAT I, AND OTHERS IN MANAGEMENT, SELL SHARES, AND DIRECTORS WOULD SELL SHARES TO HAVE SOME LIQUIDITY IN OUR LIVES. IN OTHER CASES THERE WERE EXTERNAL GROUPS LIKE A SHARESPOST OR OTHER ENTITIES THAT WANTED TO BUY SHARES TO BE ABLE TO SELL THEM TO THIRD PARTIES.
MR. DOWNEY: DID YOU EVER SELL A SHARE OF YOUR STOCK IN THERANOS?
ELIZABETH A. HOLMES: I DID NOT.
MR. DOWNEY: WHY NOT?
ELIZABETH A. HOLMES: I DID NOT WANT TO. I BELIEVED IN THE COMPANY AND I WANTED TO PUT EVERYTHING THAT I HAD INTO IT.
MR. DOWNEY: AND DO THOSE SHARES HAVE ANY VALUE NOW?
MR. DOWNEY: YOUR HONOR, I MIGHT BE FINISHED, BUT MAY I HAVE A MOMENT TO CONSULT WITH MY COLLEAGUES?
JUDGE DAVILA: YES.
(DISCUSSION AMONGST DEFENSE COUNSEL OFF THE RECORD.)
MR. DOWNEY: YOUR HONOR, JUST TWO HOUSEKEEPING MATTERS.
JUDGE DAVILA: YES.
MR. DOWNEY: ONE IS THAT I DON'T THINK THAT I MOVED TO ADMIT 10535, WHICH WAS THE LETTER FROM SECRETARY SHULTZ.
JUDGE DAVILA: YOU DID NOT, NO.
MR. DOWNEY: SO I WOULD LIKE TO MOVE TO ADMIT THAT.
MR. LEACH: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: THAT'S ADMITTED.
(DEFENDANT'S EXHIBIT 15035 WAS RECEIVED IN EVIDENCE.)
MR. DOWNEY: AND THEN SECOND, YOUR HONOR, IN CONNECTION WITH EXHIBIT 7710, I JUST WOULD --
JUDGE DAVILA: THAT HASN'T BEEN DISCUSSED.
MR. DOWNEY: THE SUBJECT MATTER RELATED TO 7710 HAS BEEN DISCUSSED. I WANT TO FORMALLY MOVE ITS ADMISSION, BUT I THINK WHEN YOUR HONOR LOOKS AT IT --
JUDGE DAVILA: MR. LEACH?
MR. LEACH: WE OBJECT, YOUR HONOR. 401, PARTICULARLY AS TO THE DATE; 403; HEARSAY; AND 702.
JUDGE DAVILA: MR. DOWNEY, I'M GOING TO SUSTAIN THE OBJECTIONS.
MR. DOWNEY: YES, YOUR HONOR.
JUDGE DAVILA: I THINK THERE'S TESTIMONY, BUT I'M GOING TO SUSTAIN THE OBJECTIONS.
MR. DOWNEY: UNDERSTOOD, YOUR HONOR. ALL RIGHT. WITH THAT, YOUR HONOR, I'VE CONCLUDED THE DIRECT EXAMINATION OF THE WITNESS.
JUDGE DAVILA: ALL RIGHT. THANK YOU. DO YOU WANT TO COLLECT YOUR BINDERS?
MR. DOWNEY: I DO. IF I MIGHT JUST --
JUDGE DAVILA: SURE.
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: MR. LEACH, DO YOU HAVE CROSS-EXAMINATION?
MR. LEACH: YES, YOUR HONOR.
JUDGE DAVILA: WOULD YOU LIKE TO BEGIN THAT NOW OR WOULD YOU LIKE --
MR. LEACH: GIVEN THE HOUR, YOUR HONOR, AND THE EXPECTED LENGTH, IT PROBABLY MAKES SENSE TO START TOMORROW.
JUDGE DAVILA: WELL, I THINK I SEE A LOT OF BINDERS THERE, AND JUST OWING TO THE TRAVEL TIME TO GET THOSE BINDERS TO THE WITNESS --
(LAUGHTER.)
JUDGE DAVILA: -- I THINK WHAT WE SHOULD DO IS TAKE OUR AFTERNOON RECESS NOW. LET'S DO THAT, LADIES AND GENTLEMEN. WE'RE MEETING TOMORROW AT 9:00 O'CLOCK, COUNSEL? 9:00 O'CLOCK. AND TOMORROW WILL BE A FULL DAY UNTIL 4:00 O'CLOCK TOMORROW, PLEASE. SO DURING THE BREAK, LADIES AND GENTLEMEN, PLEASE, I REMIND YOU OF THE ADMONITION, DO NOT, DO NOT DO ANYTHING TO LEARN, INVESTIGATE, DISCUSS ON SOCIAL MEDIA, ON NEWSPAPER, RADIO, THE INTERNET, OR ANYTHING ELSE, ANYTHING TO DO WITH THIS CASE. DO NOT FORM ANY OPINIONS ON ANYTHING YOU HAVE HEARD. TOMORROW I'LL ASK YOU IF ANY OF YOU HAVE SUCCUMBED TO ANY OF THOSE. SO HOPEFULLY YOU WON'T. YOU'LL CONTINUE WITH YOUR FIDELITY TO THE ADMONITION. HAVE A GOOD EVENING. WE'LL SEE YOU TOMORROW MORNING. THANK YOU.
(JURY OUT AT 3:52 P.M.)
JUDGE DAVILA: PLEASE BE SEATED. THANK YOU. THE RECORD SHOULD REFLECT THAT OUR JURY HAS LEFT FOR THE EVENING. ALL COUNSEL ARE PRESENT. MS. HOLMES IS PRESENT. I DID WANT TO ASK A QUESTION FOLLOWING UP ON OUR DISCUSSION THIS MORNING REGARDING I BELIEVE IT WAS DEFENSE MOTION, I THINK IT'S IN 1163. BUT EXHIBIT A, 1163-2, EXHIBIT A, IT SEEMS TO ME BASED ON THE TESTIMONY THIS AFTERNOON THAT THE -- AND I CALL YOUR ATTENTION TO PAGE 10 OF THAT DOCUMENT -- THE -- THIS IS REGARDING THE DEFENSE REQUEST TO INTRODUCE THE S.E.C. TRANSCRIPT. MY THOUGHT IS THAT THIS IS MOOT AS TO THE NULL PROTOCOL ISSUE. MS. HOLMES TESTIFIED THIS AFTERNOON ABOUT HER KNOWLEDGE OF IT, OR AT LEAST AROUND THE NULL PROTOCOL. IT SEEMS TO ME THAT THIS, AT LEAST THE DEFENSE REQUEST FOR THIS TO COME IN IS NOW MOOT. I'LL LET YOU POSIT THAT OVER THE EVENING IF YOU WOULD LIKE, BUT IT SEEMS TO ME THAT AT LEAST FROM YOUR REQUEST, AND I DON'T SEE COUNSEL HERE TO ARGUE THIS. MAYBE I SHOULD WAIT UNTIL TOMORROW MORNING.
MR. DOWNEY: YEAH, I THINK THAT -- WE WOULD APPRECIATE THAT IF YOU WOULD.
JUDGE DAVILA: YEAH, YOU --
MR. DOWNEY: I UNDERSTAND YOUR HONOR'S COMMENT AND WE'LL LOOK AT THAT TONIGHT, AND THEN MR. CLEARY WILL BE HERE IN THE MORNING TO DISCUSS THAT.
JUDGE DAVILA: WELL, MR. FLEURMONT -- NOT MR. CLEARY.
MR. DOWNEY: I'M SORRY, MR. FLEURMONT.
JUDGE DAVILA: RIGHT. HE'S THE OTHER BRILLIANT LAWYER ON YOUR TEAM, BUT HE HAS ALL OF THE KNOWLEDGE ON THIS TOPIC, AND MAYBE WE'LL WAIT UNTIL TOMORROW TO ALLOW HIM TO ADDRESS IT. IT SEEMS TO ME IT'S MOOT THOUGH. MS. VOLKAR IS STANDING AND SHE'S HERE. GOOD AFTERNOON, MS. VOLKAR.
MS. VOLKAR: GOOD AFTERNOON, YOUR HONOR. THANK YOU. I AGREE IT -- I'M NOT SURE IF "MOOT" IS THE RIGHT WORD, BUT I JUST WANT TO REITERATE MY ARGUMENT FROM THIS MORNING, WHICH IS I THINK A LOT OF THE PORTIONS OF THE S.E.C. INVESTIGATIVE TESTIMONY THAT THEY SEEK TO ADMIT IS CUMULATIVE AND DUPLICATIVE OF OTHER EVIDENCE IN THE CASE, AND I THINK THIS IS ANOTHER INSTANCE OF THAT NOW THAT MS. HOLMES HAS TESTIFIED TO THAT FACT. SO I'M HAPPY TO ARGUE IT FURTHER TOMORROW MORNING WHEN MY COLLEAGUE OPPOSITE IS BACK HERE, BUT I FIGURED I MIGHT AS WELL PUT THAT ON THE RECORD SINCE YOUR HONOR NOTED IT.
JUDGE DAVILA: NO. THAT WAS MY INQUIRY. WE'LL HAVE SOME DISCUSSION ON THIS TOMORROW MORNING WHEN THE JURY COMES. MY SENSE IS THAT IT WILL BE A BRIEF DISCUSSION. ANYTHING ELSE? THANK YOU, MS. VOLKAR.
MS. VOLKAR: NO, YOUR HONOR.
MR. DOWNEY: YOUR HONOR, I APOLOGIZE FOR THIS, BUT MY EYESIGHT IS DECLINING AS THE TRIAL PROCEEDS AND I APPARENTLY MISREAD THE NUMBER OF THAT LAST EXHIBIT, AND I JUST WANT TO MAKE SURE THE RECORD IS CLEAR. IT WAS 15035.
JUDGE DAVILA: THE SHULTZ LETTER?
MR. DOWNEY: YES.
JUDGE DAVILA: YES. I THINK THAT'S RIGHT. 15035 WAS ADMITTED.
MR. DOWNEY: OKAY. THANK YOU. NOT AS BAD AS I THOUGHT.
JUDGE DAVILA: RIGHT. ANYTHING FURTHER FROM THE GOVERNMENT?
MR. LEACH: NO, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU. I'M INFORMED THAT WE'LL HAVE THE -- THIS ISSUE ABOUT MONITORS FIXED THIS EVENING, TOO, SO WE DON'T HAVE TO USE THE CABLES HERE, BUT WE'LL KEEP OUR FINGERS CROSSED. THANK YOU. HAVE A GOOD EVENING EVERYONE. WE'LL SEE YOU TOMORROW MORNING.
(COURT ADJOURNED AT 3:56 P.M.)