SAN JOSE, CALIF – A former lab director at Theranos testified on Friday that he thought the blood-testing start-up was poised to be the next Apple until he realized that top executives were prioritizing the company’s finances and public image over the health of patients.
Adam Rosendorff, who worked at Theranos from 2013 until late 2014, told a jury that he quit in part because then-CEO Elizabeth Holmes and her top lieutenants were pushing him to “vouch for tests that I did not have confidence in.”
Rosendorff is a witness for the prosecution in Holmes’ criminal trial. Holmes and former Theranos president Ramesh “Sunny” Balwani have both pleaded not guilty to a dozen charges of wire fraud and conspiracy after the company they led to a $9 billion valuation collapsed beginning in 2015. Balwani will be tried separately.
Rosendorff said he found Theranos through a job posting on LinkedIn. He was interviewed by Holmes, Balwani and Daniel Young, who was vice president.
“I really bought into the idea of laboratory testing being done with a very small finger prick sample,” Rosendorff said. “I thought it was going to be the next Apple,” he said.
Former Theranos President and COO Ramesh “Sunny” Balwani leaves after a hearing at a federal court in San Jose, California, July 17, 2019.
Stephen Lam | Reuters
That optimism quickly faded. Rosendorff testified that after a few months he began seeing inaccurate and unreliable test results, adding that doctors and patients increasingly raised concerns.
“I believe the company was more about PR and fundraising than patient care,” he said.
In an August 2013 email to Holmes, Rosendorff indicated that the blood-testing device wasn’t ready for launch at Walgreens stores. He also flagged issues related to training and staffing in the laboratory.
“I felt it was very important for Elizabeth to be aware of these issues as the CEO of the company,” he said.
Following the email, Rosendorff met with Holmes to ask her to delay the Walgreens launch. He recalled that Holmes had a paper posted to her office window counting down the number of days until the testing centers were set to go live in pharmacy branches.
Rosendorff said it seemed as if the board and investors “were becoming dissatisfied with Theranos,” and Holmes was rushing the deal to appease them.
“She was very nervous, she was not her usual composed self,” Rosendorff testified. “She was trembling a little bit, her voice was breaking up, she was clearly upset.”
He said he approached Holmes because he thought it would “have more impact” than addressing Balwani, who frequently dismissed and redirected his concerns.
Rosendorff said that rather than delay the launch, Holmes told him they could use conventional lab equipment at Walgreens and not rely on Theranos technology.
The prosecution is relying on a number of eyewitnesses in its efforts to convince the jury of Holmes’ criminal behavior. Retired General James Mattis, who served on the Theranos board, for three years previously testified that he felt blindsided to discover the technology didn’t work.
Rosendorff’s testimony will continue next week.