SAN JOSE, Calif.—Elizabeth Holmes took the witness stand Friday afternoon to defend herself against criminal-fraud charges tied to the failure of Theranos Inc., the startup she founded in 2003 as a 19-year-old college dropout.
Ms. Holmes, who appeared composed and polished, opened her testimony at the beginning of the Theranos story: discussing her laboratory work as a college freshman at Stanford University, the mentorship she received from a Stanford professor and her vision even as a teenager to change healthcare. Her appearance—unmasked...
SAN JOSE, Calif.— Elizabeth Holmes took the witness stand Friday afternoon to defend herself against criminal-fraud charges tied to the failure of Theranos Inc., the startup she founded in 2003 as a 19-year-old college dropout.
Ms. Holmes, who appeared composed and polished, opened her testimony at the beginning of the Theranos story: discussing her laboratory work as a college freshman at Stanford University, the mentorship she received from a Stanford professor and her vision even as a teenager to change healthcare. Her appearance—unmasked for the first time in court—energized a case that is heading toward its 12th week of testimony.
As Elizabeth Holmes’s lawyers take the reins from prosecutors to mount their defense, follow our live coverage here.
Ms. Holmes, often smiling, discussed the early days of building her startup: her successful bid at a patent and building a prototype; hiring seasoned technologists she met at Stanford; fundraising from venture capitalists; and pounding the pavement for customers. She spoke of her parents’ support for her decision to abandon college in pursuit of a new venture and how she sought out connections through families and friends to meet with pharmaceutical companies she hoped would use her blood-testing technology.
Ms. Holmes ran Theranos as its CEO for 15 years, until a few months before it dissolved in 2018. She faces 11 counts of wire fraud and conspiracy to commit fraud. Prosecutors were forced to drop one fraud count Friday because of an error in their indictment, which prevented a patient in Arizona from being included in the case.
Her testimony came hours after prosecutors said Friday morning that they completed their case, which involved 29 witnesses who painted a picture of Theranos as a company that failed to fulfill the promise of its finger-prick blood-testing technology. Many witnesses said Ms. Holmes was knowledgeable about the technology’s shortcomings yet chose to sell a different story to investors, business partners and the healthcare industry.
In the trial of Elizabeth Holmes, prosecutors have shown texts, emails and audio clips portraying her in her own words. WSJ’s Shelby Holliday asked Sara Randazzo about key pieces of evidence and what to expect. Photo: Nick Otto/AFP via Getty Images (Video from 11/9/21) The Wall Street Journal Interactive Edition
After testimony from two other defense witnesses—a paralegal and a former Theranos board member—Ms. Holmes took her turn on the witness stand with about an hour of trial left before court was scheduled to end for the day. Her lawyer said she will return to the stand Monday and questioning is likely to continue through at least Tuesday, when court proceedings end for the week.
One challenge for the defense will be to offer a fresh narrative about Ms. Holmes, whose story as the leader of one of the most notable Silicon Valley startup implosions has been the fodder for a popular book, a movie and podcasts. The decision to put Ms. Holmes on the witness stand carries some risk, not least of which is opening her up to a relentless cross-examination.
But Ms. Holmes, who one veteran business executive previously testified could command a room the likes of a U.S. president, appeared confident and poised. She kept her gaze focused on her lawyer, Kevin Downey, during questioning.
At one point, she turned to the jury to offer an explanation on laboratory jargon.
“I sometimes say chemistry or assay or test,” she said, smiling and explaining that they all meant the same thing.
The rows dedicated to Ms. Holmes’s friends and family were occupied by a larger-than-usual group. Her mother and her partner, Billy Evans, have been her constant companions at trial.
Ms. Holmes talked about fundraising from prominent venture-capitalists including Donald Lucas—whom she was introduced to by a college friend of her father’s—and his nephew Chris Lucas, as well as investors from ATA Ventures and Carlyle Venture Partners. She said she responded to their due diligence requests, including offering names of references at pharmaceutical companies as references and sharing contracts and detailed financials.
These investments took place before the time frame covered by the government’s indictment alleging fraud.
Investors called to testify for the prosecution often said they were unable to do proper due diligence on Theranos because Ms. Holmes refused to share information or they feared being excluded from the funding round if they rankled her with many questions.
Ms. Holmes testified that Theranos had a breakthrough in 2009 and 2010 when her team realized they could run a range of tests on very small samples of blood.
“We worked for years with teams of scientists and engineers to miniaturize all of the technologies in a laboratory,” Ms. Holmes testified.
The first defense witness, Trent Middleton, a paralegal at the law firm representing Ms. Holmes, spent about an hour on the stand explaining a parade of spreadsheets and documents that illustrated Theranos’s operational and financial history.
The defense also called former Theranos board member Fabrizio Bonanni. His testimony was meant to show Ms. Holmes made earnest efforts to fix problems, her attorneys told the court, and that Theranos had made progress with its blood-testing technology that the prosecution didn’t acknowledge.
Jurors heard much from Ms. Holmes’s side even before the defense commenced its case. Assistant U.S. Attorney Jeffrey Schenk said Friday in arguments before the judge that a recent tally showed the defense had questioned witnesses for 65 hours of the trial, compared with 53 hours for the government.
“The defense has been putting on its case since the cross-examination of the government’s first witness,” Mr. Schenk said.
Mr. Middleton, the paralegal, testified that he had been tasked with creating charts representing Theranos test prices, the number of customers and tests performed, fundraising rounds and revenue from customers, among other data.
One chart showed that nearly all of the 269 blood tests offered by Theranos cost less than $100, while another showed about half of Theranos customers made repeat visits to its testing centers and another showed 275 separate equity investments into Theranos during its lifetime.
Mr. Bonanni took the stand as a highly trained chemist and experienced biotechnology executive who decided to use his expertise to help Theranos navigate its many challenges as the company foundered in 2016.
“At the time there were some regulatory compliance difficulties and some other difficulties originating from articles in newspapers,” Mr. Bonanni said. He testified that he turned down the job of chief operating officer—he was too old for that, he said—but offered to serve as a director.
Mr. Bonanni testified that Ms. Holmes brought in respected outsiders and new board members in an earnest effort to fix the company. Mr. Bonanni joined the board alongside William Foege, an epidemiologist and former director of the U.S. Centers for Disease Control and Prevention, and Richard Kovacevich, former CEO of Wells Fargo & Co.
Mr. Bonanni said of Ms. Holmes: “I admired her lack of defensiveness and her willingness to listen to other people’s opinions,” he said. “I never had a ‘but’ from Elizabeth Holmes.”
Write to Heather Somerville at Heather.Somerville@wsj.com and Sara Randazzo at sara.randazzo@wsj.com
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