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Texts show Elizabeth Holmes racing to rescue her floundering company

Testimony on Thursday showed how a beleaguered Elizabeth Holmes tried to control the damage of investigative articles that showed problems at her testing company Theranos.

(CN) — Testimony in the Elizabeth Holmes trial Thursday revealed some salacious correspondence between Holmes and her business partner Sunny Balwani as their blood-testing company, once the envy of Silicon Valley, began to crumble. 

“I am comfortable saying the sex and death thing because it makes the point,” Holmes texted Balwani at one point in 2015, in the immediate aftermath of the Wall Street Journal article that spurred Theranos’s downfall. 

“Don’t,” replied Balwani. 

“Don’t what,” said Holmes.

“Don’t make the sex and death point. Not ok,” Balwani said. 

It was unclear what the sex and death point related to, but the messages did reveal how desperately Holmes and Balwani were scrambling to salvage their flailing company as revelations about the inaccuracy of their testing device were swirling. 

“Wag is freaking out about the lack of transparency,” Balwani texted Holmes. Wag refers to Walgreens, which started to grow angry that their multi-million dollar investment into Theranos appeared to be headed south after whistleblowers told the Wall Street Journal that the Edison, a portable blood analyzer, could not perform most of the tests as advertised. 

“Did you tell them it literally just happened,” Holmes texted back. 

Balwani and Holmes strategize about how to communicate with Walgreens and other customers and investors as it becomes clear that people are fleeing the company. 

“At this point they know, so we need to be transparent,” Balwani tells Holmes at one point. 

The emails came during the testimony of Nimesh Jhaveri, a former executive with Walgreens who was tasked with rolling out the retail portion of selling Theranos devices in the pharmacy chain. 

Jhaveri and the attorney for the Department of Justice, Jeff Shenk, role-played the text exchanges between Balwani and Holmes, with Jhaveri reading the Balwani parts and Shenk playing the Holmes parts. Holmes herself was present in court and looked on with her characteristic poise. She typically sits with almost exaggeratedly good posture, straight-backed and wearing an expression of keen attention. 

She does not flinch when the attorneys reveal embarrassing moments, which occur frequently since Holmes and Balwani were more than just business partners, sharing a romantic relationship that showed a flair for cringeworthy text message exchanges. 

But in the exchanges read Thursday, there was little romance and much regret. 

“Our CLIA lab failed at all five levels,” Balwani texted at one point. “Just figured it out dealing with it...Miss old days. These days are not worth whatever we are trying to do here." 

Kevin Downey, the attorney for Holmes, managed to prompt Jhaveri into conceding that he actually had very little interaction with Holmes herself during Walgreens’s rollout of the Theranos devices. 

Prosecutors have routinely run into a problem where they have compelling testimony about the issues at Theranos but are unable to directly tie it to a scheme hatched and administered by Holmes herself. 

The defense team is also intent on consistently showing the jury that Safeway and Walgreens were sophisticated operations with armies of lawyers that may have failed to do their due diligence on a company that was new, run by a young individual in her mid-20s, did not have federal approval and remained highly speculative. 

Also, many of the executives at Walgreens in particular, including former CFO Wade Miquelon, kept in touch with Holmes and continued to share encouraging messages with her, even in the aftermath of her downfall. 

“This is great — congratulations!,” Jhaveri wrote to Holmes in an email after she made the cover of Fortune Magazine. “I want an autographed copy!”

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