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.
Former Walgreens chief financial officer Wade Miquelon left Walgreens prior to the deal with Theranos, but he continued to believe in him and his startup’s technology, he told the jury, which displayed copies of emails between the two.
“You are in my thoughts,” Miquelon wrote in an email to Holmes in late 2015, after a damning article in the Wall Street Journal began exposing Theranos. “We live in a world where anyone can say anything about anyone whether it’s true or not. Hang in there. Haters are everywhere, but your contribution to the world can’t be suppressed He advised her to fight aggressively, and signed his email, “your friend.”
Eight months later, Miquelon wrote to Holmes, “Don’t stop working to help the world,” and he replied, “You know how much that means to me.”
Miquelon testified in US District Court in San Jose on Wednesday that Walgreens had agreed to pay Theranos a $100 million “innovation fee” in 2012 and invest an additional millions in a deal aimed at Theranos blood- The test services were to have Walgreens stores across the US.
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. If found guilty, he could face up to 20 years in prison.
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, after Miquelon left Walgreens, the drugstore chain terminated the Theranos partnership and sued Theranos, eventually reaching a tentative settlement for less than $30 million, as reported by Wall. The Street Journal reported in 2017.
Miquelon 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 was conducting nearly all tests using its own equipment. Prosecutors allege that Theranos was using third-party machines for most types of testing.
Miquelon said that Holmes and Balvani “confirmed to us that the technology works, and it needs to be enhanced.” During the pilot project, when Miquelon learned that nearly all Theranos tests were being conducted on needle-drawn venous blood, when he believed 90% of what Holmes should have done with a finger-stick, She told him that one of the problems was “getting physicians to massage the finger to get the proper blood sample.” He testified that he never remembered Holmes attributing problems to the limitations of Theranos machines.
Miquelon also told the jury that he “definitely cared for her a lot and wanted her to be successful.”
When asked about the negative press coverage by federal prosecutor Jeff Schenk, Miquelon said, “I didn’t want to believe that the things I believed weren’t true.”