We have put at least 100 hours of diligence on Theranos
Elizabeth Holmes, Theranos Inc. , left, arrives in federal court in San Jose, California, on Tuesday, October 12, 2021.
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San Jose, Khalif. – Safeway’s former CEO, Steve Board, said on Tuesday his company knew it was taking a risk by partnering with blood-testing startup Theranos, and acknowledged the deal would have been good for the grocery chain’s share price.
On his second day Certificate In the Theranos Elizabeth Holmes criminal fraud trial, Board told jurors that Safeway conducted a thorough, independent investigation into the company’s allegations about its technology before signing an agreement in 2010.
The deal, valued at nearly $400 million, resulted in the reconfiguration of 969 Safeway stores in preparation for the blood testing devices. Safeway dissolved its partnership with Theranos in 2015, two years after Burd retired.
While Bird was called as a witness by the prosecution, defense attorney Kevin Downey, who represents Holmes, named the former CEO on what he knew about Theranos when he sealed the deal.
“Did you know at the time that she was a very young entrepreneur?” Downey said, referring to Holmes, who was then in her twenties. Burd replied, “Right.”
Downey continued, “Is it fair to say, in the process of striking a deal, that he would waste hundreds of hours of due diligence?”
“At least 100,” Board said, adding that he holds himself “personally responsible” for implementing the agreement.
Holmes rose to fame in Silicon Valley by developing a technology that promised hundreds of diagnostic tests with just a finger prick of blood. But Theranos never realized those aspirations, and Holmes does now He was charged with 12 counts of fraud and conspiracy Regarding misleading investors and patients. She is not guilty.
During opening statements, defense attorney Lance Wade told jurors that while some mistakes were made, leading a failed startup doesn’t make it a criminal. Holmes faces up to 20 years in prison if convicted.
With Burd on the podium, the defense tried to show that Safeway, a huge national chain, wasn’t fooled by its negotiations.
“You’ve been in contact with Theranos almost daily for over a year,” Downey told Board. “We were on a parallel path to closing the deal and doing our due diligence,” the witness replied.
Theranos has never posted its devices in a physical store. Later announced a partnership with Walgreens, which also failed.
A person walks into a Walgreens store in San Francisco, California, United States, on Tuesday, April 13, 2021.
David Paul Morris | Bloomberg | Getty Images
“So you get that Safeway or Walgreens or one of the other companies they’ve been talking to, this is going to be the first consumer-driven technology deployment, right?” Downey asked. “You understand as a result that they haven’t developed this technology on a large scale, right?”
“I knew they didn’t have a lot of clients,” Bord said.
Downey also noted the challenges Safeway faces. The company’s stock price dropped from $19 in January 2012 to $14 in July of that year, as Safeway and Theranos were working on restarting devices.
“Have you reached out to Mrs. Holmes by text message or otherwise and told her that you think the stock price of Safeway would improve if you could announce the launch of a Theranos product in Safeway stores?” Downey asked. Bird testified that he did not remember saying it, but agreed that Safeway’s stock would have risen if the launch had taken place.
Some of Board’s emails from that period were read in 2012 in court, revealing his growing frustration with Theranos.
In one of Baird’s emails to Holmes, Burd wrote in the subject line, “Becoming frustrated.” “I’m one of the most positive people I’ve ever met, and I’m not discouraged,” he testified.
Board also told jurors that Safeway was conducting beta tests on employees who worked on the company’s campus. However, the tests came out inaccurate.
“I think whenever you start something new, you’re going to have some tough spots, but we still have some tough spots,” said Bord. “We had samples that got lost, and we got results that don’t make sense.”
Wade Micklon, the former chief financial officer of Walgreens, took the stand late Tuesday. He testified about a series of meetings he had with Holmes and her chief executive officer, Ramesh “Sunny” Balwani, in 2010.
“This was one of the most exciting companies we’ve seen, not just in the lab but in general,” Miquelon said, adding, “We were very excited to form the partnership.”
Walgreens at one point had more than 40 Theranos blood testing centers within its stores. Miquelon’s testimony continues Wednesday.