In testimony that capped off the first full week of witnesses taking the stand in the criminal trial of the disgraced founder, a longtime Theranos scientist painted Elizabeth Holmes as prioritizing a business partnership over the possible well-being of patients.
Surekha Gangakhedkar, a scientist who worked for Theranos for eight years before quitting over concerns about the company’s capabilities, will continue her testimony in a San Jose federal courtroom on Tuesday when the high-profile trial resumes.
Holmes was directly aware of the flaws in its proprietary blood analyzer machine, according to Gangakhedkar, but continued to roll out the devices anyway.
Holmes was directly aware of the flaws in its proprietary blood analyzer machine, according to Gangakhedkar, who testified Friday that the company moved forward with the rollout of its devices to Walgreens locations despite knowing about them.
Gangakhedkar, who joined Theranos in 2005 and claimed to have reported to Holmes at one point, testified that she returned from a nearly month-long vacation to learn that the company planned to use its devices to test patient samples soon, despite unresolved reliability issues. Holmes allegedly put pressure on her to validate tests for patient use.
“I was very stressed and unhappy and concerned with the way the launch plans or the launch was going,” said Gangakhedkar, who left the startup in September 2013, around the time when Theranos issued a press release about its long-term partnership with the pharmacy chain. “I was not comfortable with the plans they had in place so I made a decision to resign and not continue working there.”
Judge Edward Davila granted Gangakhedkar immunity from self-incrimination before she testified, and she said she spoke with Holmes directly about her decision to resign, including her concerns about the plans to proceed with the launch.
Holmes, Gangakhedkar testified, responded by conveying “that when she has a promise to deliver to the customer, she doesn’t have much of a choice but to go ahead with the launch.”
This testimony gets to the heart of the case: what Holmes knew, when she knew it, and whether or not she intended to deceive investors, patients, and doctors. As she ran out of time and resources to make the technology work, the government is attempting to persuade the jury that Holmes knowingly misled investors, patients, and doctors about the capabilities of her company and its proprietary blood testing technology. On the other hand, the defense claims that Holmes was a young, ambitious CEO whose company failed, but that failure is not a crime.
Holmes faces up to 20 years in prison if convicted of a dozen counts of federal fraud and conspiracy. She has entered a not guilty plea.
In 2013, the startup gained significant credibility by forming a partnership with Walgreens. Within some Walgreens locations, the two collaborated to create “wellness centers.” Before a Wall Street Journal investigation into Theranos’ technology and testing methods prompted broader scrutiny, it was the company’s only active direct-to-consumer partner.
The Walgreens launch was accompanied by a flurry of press coverage, which served as a sort of unveiling for the company, which had been operating under the radar for nearly a decade.