(CN) — Defense attorneys for Elizabeth Holmes on Friday foreshadowed how they will attack Erika Cheung, the whistleblower who contributed mightily to the downfall of the Silicon Valley blood testing company Theranos.
Lance Wade, attorney for Elizabeth Holmes, pointedly asked Cheung a series of questions intended to elicit the fact that she only had insight into a small portion of the company’s operations, that the use of Edison machines for patients was not as widespread as imputed and that Holmes and others were trying to fix test errors by installing better protocols.
“If the device performance deteriorated over time they wanted you to make note of that?” Wade said, pointing to a document about improving quality control at Theranos in 2014, during Cheung’s brief tenure.
“This document provides a process by which you can recorrect for the issues and errors you see,” Cheung said after reading the document.
“Had you seen this document before?” Wade asked.
“No,” replied Cheung.
The exchange reveals the degree to which the defense will strive to show that Cheung, one of the primary sources of John Carreyrou’s investigative look into problems at Theranos, was a low-level employee who lacked the credentials of her superiors and was only privy to a slender part of the company’s overall operation.
Later Wade asked if Cheung remembered how many patient samples the company ran in November 2013. Cheung said she could not recall given it was 8 years later.
“Was it 10?” he asked.
“I don’t remember,” she said.
“What about December?” Wade asked. Cheung again couldn’t recall.
“Was it around 17?” he asked.
The point Wade was trying to make is that Theranos wasn’t using its blood analyzers in a clinical setting at a scale that has been suggested in press reports while making the case the company was working tirelessly to get its testing machines to be more accurate.
He also noted that a Theranos human resources worker attempted to get in touch with Cheung twice before sending her a cease and desist letter warning of litigation if she continued to talk with third parties regarding her experience at the company.
But on redirect testimony, Cheung was given the opportunity to talk once again regarding her concerns with the testing inefficiency that was being used on patients.
“We had people sleeping in their car because it was taking too long — we had to perform these samples over and over,” she said under questioning from John Bostic, attorney for the government. “Just because they are less expensive doesn’t mean you should give someone false information about their health status.”
Cheung also defended her decision not to respond to phone calls from Theranos Human Resources Director Mona Ramamurthy.
“I just heard how scared Mona was and I knew I had the right not to talk to them,” Cheung said.
The prosecution will have to tread carefully with Cheung in front of a jury as her performance over her three days of testimony was quite impressive as she did not come across as a wide-eyed young college grad, but a woman of extreme competence and calm.
She unfailingly answered questions from Bostic and Wade with politeness, rarely betraying any emotion and showed a high degree of technical competence as it relates to blood testing processes and equipment.
Cheung was unflinching and calm as she detailed her journey from a wide-eyed college grad dazzled by Holmes and the company mission to a disillusioned employee willing to cooperate with investigative journalists.
Her testimony was highly credible and she came across as a highly intelligent individual with firm moral conviction. If the defense strains to suggest otherwise, it could backfire with the jury.
However, Wade was unfailingly polite and deferential to Cheung during cross-examination and his line of questioning appears to be focusing on whether Cheung knew enough about the entirety of the company’s operations during her six-month tenure to be able to establish Holmes’s conduct at the time was fraudulent rather than flailing.
She only interacted with Holmes for an hour, during her job initial job interview, and was not privy to the operations of executives at Theranos.
However, Surekha Gangakhedkar, a former manager in charge of validating various tests for the Edison, the handheld blood analyzer at the center of the case, testified for the first time on Friday and said Holmes directly pressured her to validate blood tests on the device for clinical use when it was clear they were not working properly.
Gangakhedkar tendered her resignation in September, about four months prior to Cheung.
“I was surprised they were going to launch assays on proprietary devices and it was not aligned with some of those decisions,” she said.
Assays are a synonym for blood tests.
Gangakhedkar said she spoke directly to Holmes about the reasons for her resignation.
“I raised the concerns on how she plans to launch with the Edison 3.0s we had seen within the last few days that they continued to have issues,” Gugakhedkar said. “At the time she mentioned she had promised to deliver to the customers and she didn’t have much of a choice to go along with the launch.”
The testimony is some of the most damning regarding Holmes's personal involvement in the decision to move forward with clinical testing using the Edison despite persistent accuracy issues.
But Wade began his cross-examination by noting that Gangakhedkar was on the research and development side of the testing regime and not on the clinical side.
She also told the jury that the blood testing regime had not been validated by the time she resigned.
“I wasn’t aware that the validation of the 3.0 had been completed,” she said, likely an important admission for the defense.
The trial will resume on Tuesday with continued cross-examination of Gangakhedkar.
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