Drugstore giant Walgreens paid $100 million to Palo Alto blood-testing startup Theranos, and invested $40 million in the failing company, a former Walgreens executive testified Wednesday in the criminal fraud trial of Theranos founder Elizabeth Holmes. Gave.
Walgreens agreed to pay Theranos a $100 million “innovation fee” in 2012 and invested an additional millions in a deal intended to keep Theranos blood-testing services at Walgreens stores across the US, drugstores, and more. The chain’s former chief financial officer, Wade Miquelon, testified. US District Court in San Jose.
Under the deal, Walgreens was to pay Theranos $25 million immediately, then the same amount as when a pilot project hit 10 patients per store per day, then the remaining $50 million on the widespread launch of testing services in stores, a copy of According to the agreement displayed in the courtroom.
Patient trials began in late 2013 in Palo Alto and Arizona, according to Miquelon, a bald man in a navy suit, light gray dress shirt and striped blue tie. According to a transcript of the call displayed on a courtroom screen, “the patient feedback we’re getting has been great,” Miquelon said during an annual Walgreens call with analysts a month after the trial began.
As of 2014, Holmes was asking Walgreens to hurry with the payment of the remaining funds, suggesting that a national rollout to the chain’s stores could be completed that year, according to an email shown to jurors.
Stanford University Dropout Homes, which founded Theranos in 2003, is accused of undercutting investors by millions of dollars and misleading patients and doctors with false claims that Theranos’ machines can test the entire range using only a few drops of blood. can. with the stick of a finger. He has been charged with a dozen felony fraud charges and pleaded not guilty. Holmes, who gave birth to a child in the summer, is accompanied by her mother Noel, and occasionally her partner Billy Evans, who sits in the front row of the gallery directly behind Holmes, in court.
Miquelon testified that when he began working with Theranos, the now-defunct startup was a leader among more than 150 companies in bringing fast, easy, affordable blood tests to the public, and that its technology appeared “really exciting”. Granted.” But in 2016, Walgreens terminated the partnership and sued Theranos, eventually reaching a temporary settlement for less than $30 million, as the Wall Street Journal reported in 2017.
Miquelon, who left Walgreens before the partnership broke up, also testified that Holmes and his co-accused, former company president Sunny Balwani, as well as documents provided by Theranos, led him to believe that the firm would conduct nearly all trials using its own. Was getting it done. Device. Prosecutors allege that Theranos was using third-party machines for most types of testing.
Under cross-examination by a lawyer for Holmes, Miquelon admitted that he knew Theranos had several generations of machines and was working on future iterations. “Technology is always an evolution,” Miquelon said.
If found guilty, Holmes could face up to 20 years in prison.