Elizabeth Holmes trial: The former says she was rejected in an alarm attempt

A former Theranos Inc. lab worker stated Wednesday that it raised alarms about the blood test start-up practices with colleagues, executives and even a senior executive and board member, but it was rejected on every turn.

Former employee Erika Cheung’s testimony reinforced the case of federal prosecutors against Theranos founder Elizabeth Holmes, who fights allegations of cheating patients and investors with promises that her technology could prove various conditions. health with just a few drops of blood from a fingertip.

During two days of testimony, Ms. Cheung stated that Theranos’ patented technology often did not work and that the company cut the boundaries to give the impression that its product was ready for large-scale use by patients.

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He said he tried to explain to as many people as he could about issues, including a conversation with the company’s No. 2 executive, Ramesh “Sunny” Balwani. Instead of being receptive, she said, she wondered why she was capable of raising concerns and whether she wanted to work for the company.

Ms. Cheung said she was “really stressed and uncomfortable with what was going on” in her last months at the company and that she didn’t feel confident enough about the technology to do patient samples. He resigned in April 2014.

Mrs. Holmes has pleaded guilty to 10 counts of cable fraud and two counts of conspiracy to commit cable fraud. Her lawyer has described her as guilty of little more than naivety and running a failed business.

During cross-examination, a lawyer from Ms. Holmes tried to establish the role of Mrs. Cheung as a low-level employee at Theranos, asking her to detail the hierarchy of the company’s lab equipment and whether she was aware that according to lab protocols, the lab director is responsible for ensuring the tests are accurate and reliable.

Ms. Holmes’ attorneys tried to prevent the jurors from seeing some of Ms. Cheung’s emails from her time in Theranos, saying they were rumors that could not be related to Ms. Holmes. But U.S. District Judge Edward Davila allowed several more emails to be used Wednesday.

Ms. Cheung’s testimony marked her most complete and sworn account of her passage through Theranos, an experience she has talked to regulators about, in an HBO movie and on public stage in a talk TED. Ms. Cheung toured the jury members through the way she joined the company as a recent college graduate with her eyes open in love with Ms. Holmes ’vision and left about six months later.

Ms. Cheung is the second witness in what is expected to be a trial of more than three months.

Ms. Cheung joined Theranos after graduating from the University of California Berkeley in 2013, at which time. he recalled, the startup was creating buzz on campus. At a Berkeley job fair, Theranos ’stand had“ a line through the door of people waiting to talk to the recruiter, ”he said. After giving her the resume, she had interviews with executives, including Ms. Holmes, whom he said he admired and felt “star.”

She was enthusiastic about the technology and was quickly told that secrecy in the company was paramount, Ms. Cheung recalled from the witness stand. By the time it became an associate of Theranos Laboratory, the company was already offering testing to the public at Walgreens Boots Alliance Inc. WBA 3.94% pharmacies.

Theranos told investors that their proprietary machines could do more than 200 tests with small amounts of blood. But Ms. Cheung told jurors that Theranos could never handle more than 12 types of blood tests on her proprietary Edison machine, and instead did most of the testing on third-party machines, including some she modified for work with smaller blood samples.

“The machine was not built to be able to do processing in such a small volume,” he said of the commercial analyzers.

Ms. Cheung’s work involved validating tests Theranos did on the Edison device, she said. These tests required a lot of sample blood, which she said she sometimes got to pay employees, including herself, to donate.

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During the process, he said he realized that every time he did a vitamin D test with his own blood, he showed that he had a deficiency, which was not reflected in traditional machines. “I started to notice that there was a slight discrepancy,” he said.

In November 2013, a month after joining the company, Ms. Cheung said she tried to alert her colleagues of failures in the vitamin D quality control tests she performed on a Edison device, which according to laboratory protocols prevented him from running patient samples.

In an email string sent to jury members that was sent in response to Ms. Cheung’s concerns, Balwani said, “This is beyond unacceptable performance.” asking, “How fast can we solve this problem?”

Ms. Cheung said a patient sample was ultimately run on the Theranos device despite the problems, after an employee omitted some data to show she was passing quality control. “I disagree,” Ms. Cheung said of the decision.

During her testimony on Wednesday, Ms. Cheung said the practice of scrapping so-called peripheral data to overcome failures in quality control happened frequently during her stay at the company. Removing an “extravagant data point” is not unheard of in a lab, he said, but in Theranos there was no definition of atypical value and “there was no real person to determine what a atypical value “.

Routine failures during quality control testing were worrisome, Ms. Cheung said, because if you can’t get an accurate result when you know what the answer is supposed to be, “it doesn’t give you the confidence to be very reliable. “when testing the blood of a real patient.

As the months went by, he became concerned that patient samples would be provided while “behind closed doors we are having all these problems”.

She stated that she never tried to talk to Mrs. Holmes about the problems because a friend and co-worker, Tyler Shultz, was already in contact with her. Ms Cheung said she and Mr Shultz also spoke with their grandfather, then-council member George Shultz, the former secretary of state, but also avoided concerns. Mr. Shultz died earlier this year.

In 2015, months after leaving Theranos, Ms. Cheung spoke with a Wall Street Journal reporter about her experience at the company. .

He said at the same time that he started talking to federal lab regulators about his concerns.

After inspections and sanctions from the regulator, the Medicare and Medicaid Centers, Theranos annulled all test results on its machines and reached an agreement under which Theranos voluntarily closed its laboratories.

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In 2019, Ms. Cheung co-founded Ethics in Entrepreneurship, an organization aimed at improving the ethics and culture of emerging companies.