Former Theranos lab director Adam Rosendorff was the second employee to testify at the trial of Elizabeth Holmes, who kept his work emails. Forwarding business emails to a personal account may violate a nondisclosure agreement, which Rosendorff signed when he joined the company. But like Surekha Gangakhedkar before him, he feared that he would be blamed for the company’s problems.
He was rightly concerned: he is one of the people trying to blame the defense of Elizabeth Holmes.
In the US’s opening arguments against Elizabeth Holmes, the defense agreed that there were problems in Theranos’ lab. But Lance Wade, Homes’ attorney, said problems in the clinical lab were ultimately the responsibility of the lab director. And by the way, that lab director reported to Holmes’ co-defendant, Sunny Balwani, who is being tried separately. They are facing 10 counts of wire fraud and two counts of conspiracy to commit wire fraud.
Today’s testimonial was about bad Theranos tests. Many new emails were introduced, showing that Holmes was aware of the company’s problems and was even actively trying to control the situation. In those emails, Rosendorff tried several times to have Theranos’ labs run FDA-approved tests instead of the ones Theranos had developed. Perhaps even more telling were the emails from which Rosendorff was excluded.
Rosendorff didn’t mince his words when he entered the witness stand. He stopped because of many things, he said. “One was management’s reluctance to conduct aptitude tests as required by law. I felt pressured to vouch for tests I was not confident in.” That wasn’t all. He came to believe that “the company was more about PR and fundraising than patient care,” he said.
When he first joined Theranos in April 2013, Rosendorff thought Theranos might be the next Apple. But the gloss quickly wore off—and by that summer, he was looking for other work. In August, before the launch of Theranos in patients, the clinical lab was “concerned” about testing real people, he said; the pace around launch “extremely rushed and rushed.”
On August 31, 2013, Elizabeth Holmes sent an email at 1:00 AM requesting an update on how many tests had completed validation. An employee wrote back that none of them had done that. The launch was scheduled for Sept. 9, 2013, and the schedule came from Holmes and Balwani, Rosendorff said.
He became more and more concerned and tried to stop it. He sounded ‘alarm bells’. In an email just over a week before the scheduled launch, Rosendorff wrote Holmes and Balwani expressing concerns about some of the tests. He also felt that the lab needed more staff with better training.
He needed “a few more weeks to resolve these medical and logistical issues,” he wrote in the email. That would mean delaying testing Theranos on patients. He even spoke to Holmes about his concerns, as he felt that Balwani was not taking him seriously.
During that meeting, Rosendorff described Holmes as “very nervous”. “She wasn’t her usual calm self. She was shaking a little,” he said.
Despite Rosendorff’s concerns, the launch went as planned.
Some of his testimonies confirmed what previous Theranos employees had said. He echoed Erika Cheung’s concerns about removing outliers from Theranos data. As both Cheung and Gangakhedkar testified, the Edison machines often failed in quality control.
While a quarter of Theranos devices routinely failed quality control, failures of commercially available technology were much less common. Theranos devices “failed so often that I raised doubts about the accuracy of the tests themselves,” Rosendorff said. He emailed Balwani about the failure rates, who wrote back, “Adam. This is not the case.”
Normally, lab directors deal with doctors who are concerned about lab results — this was part of Rosendorff’s job at his previous employer, the University of Pittsburgh. But Theranos installed Holmes’ brother, Christian, as the liaison for complaints. Rosendorff said he was pressured to come up with statements about poor results that did not question the tests themselves.
But the tests were bad. In the case of an important pregnancy hormone — one about which we heard testimonies from a patient who was falsely told she had miscarried — Rosendorff sent a capital email to his staff in May 2014 stating that all future tests would be performed. on an FDA-approved device.
This did not happen.
There was even a June 2014 e-mail chain in which Christian Holmes wrote to his sister, CCing Balwani, that the test “caused serious complaints and patient problems.” In addition, the lab was “a complete mess”.
Holmes wrote back that she would contact her brother, adding: “Sunny / this has already been dealt with.”
There are a few notable things about the exchange. First, it destroys the idea that Holmes could have been misled about the state of the clinical lab and its tests. Second, it shows that she is clearly taking charge of the situation, even telling Balwani to step down. But third, it’s notable who’s missing from the chain: Rosendorff, who may not even have known his instruction to use FDA-approved devices nothing but was ignored.
The first time he saw those emails was in court, he said. It wasn’t the only series of patient complaint emails we saw that didn’t include Rosendorff.
In February 2014, Rosendorff also tried to convince the company to stop performing its HDL (“good”) cholesterol test on Theranos devices. He emailed Balwani and added Holmes, thinking Balwani wasn’t listening to him. “I got a lot of reluctance” for suggesting the lab use approved devices, Rosendorff said.
That pushback came from Holmes, Balwani and VP Daniel Young, he testified. And while Young didn’t have a medical degree, he often offered suggestions about what was “really” wrong with tests, Rosendorff said. Through his testimony, Rosendorff spoke of Young in general in a tone that suggested he disliked the VP.
Problems in the lab were widespread, Rosendorff testified, pointing to tests of baking soda and an email pointing out that two-thirds of patients read below the normal range. “The test has not lost any diagnostic value,” he emailed in September 2014
But Theranos was not honest with doctors or health care providers about this. Instead, customer service representatives were instructed to say the results were “not reported due to temporary unavailability.”
Another email from a health care provider said it didn’t realize Theranos’ methods were not FDA-approved, and complained about testosterone and blood sugar tests. “I’m not sure what to do with these lab results????” read the email.
Part of the problem was that all validation studies had been done on venous blood, Rosendorff testified. Look, to get enough fingerstick blood to do all the exams, you’d have to prick each finger on the patient – so venous blood was drawn for convenience. But when you draw blood from fingersticks, you are much more likely to destroy red blood cells, leading to erroneous readings.
One of the bad tests was one for sodium, potassium and chloride called ISE. Young, who was a statistician and not a doctor, suggested that the erroneous results of this test were due to the breakdown of the red blood cells, and insisted on a visual examination of the blood to confirm this.
This was bad for several reasons. First of all, the FDA-approved machines discovered this immediately, not after some weird reading. Second, evidence of broken red blood cells wasn’t always obvious to the eye, Rosendorff testified.
This bad test has been used in patients since September 2013. As of June 2014, there were still problems with the tests and the solutions proposed by Young, including a “bias-correction” method, still did not work. So Theranos destroyed tests that fell above and below the accepted values.
That was also a problem. We saw an email from a doctor dated October 27, 2014, addressed to a customer service representative. The patient had low sodium – which is why the test was ordered. A customer service representative emailed Rosendorff and said, “Is it possible that was the value? If she comes back in and the value is still critically low, will it be invalidated again?”
Rosendorff forwarded this email to Balwani and Holmes, writing: “I am not sure of any clinical value of a sodium test where the only time we can report it is when it is not critical and the very situations that require accurate measurement.” and requiring reporting of abnormal sodium results are invalid.”
Calcium tests were also bad. “Are there any findings we can pass on about high trends in calcium reporting?” Christian Holmes wrote to Young and Balwani. “It seems to be by far the majority of the questions we get right now about accuracy.”
He then forwarded this to his sister. “It’s pretty clear that we have problems with calcium, potassium and sodium in particular,” he wrote. “Of course I can’t tell them we’re wrong, but they keep sending patients to Quest [another blood-testing company] after we report high, and the results continue to become normal. ”
Rosendorff was not included in this chain and talked about it “specifically”. There were many problems with other tests, he said.
“I didn’t believe at this point that Theranos could solve these problems,” Rosendorff testified. He began to avoid talking to doctors and told one or two doctors that he didn’t trust the results.
All this is bad for Holmes – not only is she aware of the problems, she is in charge. But her defense hinted what Rosendorff’s cross-examination might bring. One of his later employers was also under investigation by federal authorities, as was another company subject to a judicial investigation. (We found out before the jury was allowed into the courtroom.)
It’s not clear that Rosendorff’s post-Theranos employment will be deemed relevant to the current case – the jury may not hear about this. But the defense will definitely have some work to do. While Rosendorff’s testimony was much more technical than board member James Mattis’s yesterday, it may have been worse for Holmes. If she tries to convince the jury that the fraud was largely Balwani’s fault, she will have to explain the copious evidence that she gave march orders.