Elizabeth Holmes explains her one regret

In her defense, the former Theranos CEO admitted she put faked logos on reports sent to investors and partners. She wished she'd done that "differently."

Theranos founder Elizabeth Holmes sits in the backseat of a car after leaving the Robert F. Peckham Federal Building.

Theranos founder CEO Elizabeth Holmes sits in the back seat of a car after leaving court Tuesday.

Photo: Ethan Swope/Getty Images

Regrets? She had a few. One, really.

As her testimony continued Tuesday on charges of fraud in her management of failed blood-testing startup Theranos, Elizabeth Holmes maintained she never meant to mislead her partners.

Holmes admitted she herself added Pfizer and Schering-Plough logos without authorization from the pharmaceutical makers to the top of reports sent to its largest partner, Walgreens. She claims she did this to convey that the reports were compiled "in partnership" with the companies, not to give the impression they came directly from the companies.

"I wish I'd done it differently," she said of the faked reports.

It was a rare show of regret for Holmes, who offered broad apologies in media appearances after Theranos' tests were shown to be faulty. (In 2016, the company voided two years of test results given to patients from its testing equipment after reports of problems at its labs.)

Even then, in her testimony Tuesday, she basically chalked the misleading report up to a misunderstanding. She then jumped into a litany of excuses, largely casting the blame for Theranos' failure on external forces beyond her control.

Holmes said Walgreens pressured Theranos to use a central laboratory for the first phase of its rollout of testing centers in the drugstore chain, rather than putting its blood-testing devices inside stores as originally designed. That meant patient samples came in all at once, which posed problems for the company's proprietary Edison devices.

"It's never smooth," Holmes said regarding laboratory operations. "There's always challenges."

That led the company to use commercial testing devices from Siemens in its lab, a change it did not disclose to partners. Its reliance on third-party devices was only later publicly revealed by Wall Street Journal reporter John Carreyrou in a 2015 article.

Holmes said she was unaware that Theranos' agreement with Walgreens wasn't on steady footing, even though the company had only opened 40 blood-testing centers by mid-2014, far short of the goal of 3,000 locations by that time. She testified that she "knew issues were coming up," but thought the partnership was going well overall. She said then-COO Sunny Balwani did not tell her the rollout had slowed to a halt, and that she didn't get any complaints about testing inaccuracies. She also said Walgreens' combination with British health care company Alliance Boots and the departure of CFO Wade Miquelon, a key contact for the partnership, soured her relationship with the company. Walgreens closed all of its testing centers and sued Theranos for breach of contract in 2016.

Holmes also discussed another deal that foundered after a key executive sponsor left. In 2010, she said, Theranos began talks with Safeway, a grocery chain which has drugstore operations in many stores. Holmes said that the departure of CEO Steve Burd in 2013 "reset" its relationship with Theranos. She said the partnership ultimately ended in 2016 without ever putting Theranos devices in Safeway stores, claiming that "laboratory and regulatory issues" got in the way. News reports in 2015 suggested that the partnership had been dormant for years at that point.

The trial Tuesday drew a slightly smaller crowd than Monday. A fan shouted "God bless you, girlboss" as Holmes and her cohort swiftly walked up to the courthouse doors. Another spectator sold Holmes merch, including blonde wigs, "blood" energy drinks and her signature black turtleneck for $40 a pop.

Holmes' testimony is set to resume next Monday. Next comes a cross-examination by the prosecution that's likely to prove intense.


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