Elizabeth Holmes resumes testifying in Theranos trial

SAN JOSE. — Theranos founder Elizabeth Holmes resumed her testimony Monday in the closely watched fraud trial over her failed blood-testing startup.

After a delayed start, Holmes described what she thought were promising partnerships with pharmaceutical companies and confirmed that the company never finalized a deal with the Defense Department as she continued her surprise testimony.

In a move that most legal experts had discounted as too risky, Holmes’ defense team late Friday called her to the stand, where she testified for about an hour. Federal prosecutors allege that the defunct blood-testing company she started in 2003 misled investors and patients, charging her with two counts of conspiracy to commit wire fraud and nine counts of wire fraud.

Testifying for nearly two hours Monday, Holmes outlined the fundamental promise of Theranos’ technology, to reduce the amount of lab equipment required for a blood test.

“We thought this was a really big idea, because these robots that are used in a traditional lab as far as we knew had not been miniaturized,” she said.

Holmes’ attorney, Kevin Downey, questioned his own client — the defense’s first opportunity to directly rebut the government’s allegations of fraud. Prosecutors noted that the defense had already spent more time examining the prosecution's witnesses than the government had.

Downey painted a picture of a young company in the late 2000s, illustrating its attempts to pursue deals with major entities in government and academia, as well as pharmaceutical companies, including Merck, AstraZeneca and Centocor.

“Merck sent data back to Theranos showing how well we performed compared to their traditional assays,” Holmes said while acknowledging that the two companies did not collaborate on a clinical study.

In addition, she said, there were some attempts to work with a section of the Army known as the Telemedicine and Advanced Technology Research Center. 

“One was seeing if there were markers in the blood to see if we could predict PTSD. One was diabetes management,” Holmes said, using the initialism for post-traumatic stress disorder.

But, she acknowledged, the company was never able to complete a deal with the Army research center.

Defense questioning of Holmes will continue Tuesday. Government lawyers will have a chance to cross-examine her when the defense finishes its questions, either when court resumes Tuesday or next week, after a three-day break for the Thanksgiving holiday.