People

A Theranos lab worker says blood tests were like ‘flipping a coin’

The testimony from whistleblower Erika Cheung could form a crucial piece of the prosecutors' fraud case against former Theranos CEO Elizabeth Holmes.

The former Theranos headquarters in Palo Alto.

The former Theranos headquarters in Palo Alto.

Photo: Andrej Sokolow via Getty Images

Did Theranos' blood-testing technology work? That was the key question prosecutors hammered away at as the fraud trial of former CEO Elizabeth Holmes continued Wednesday in a San Jose courtroom.

The company's proprietary Edison machines routinely failed quality control tests to the point that former lab employee Erika Cheung said she sometimes refused to run patient samples on the devices, she testified in court.

Patients "don't know the fact that behind closed doors we're having all these problems, and they think they're getting correct results," Cheung said. "It was starting to get very, very uncomfortable and very stressful for me working at the company."

Holmes now faces charges of fraud and conspiracy to commit fraud against investors and patients who paid directly for their tests. Cheung's testimony for the prosecution laid out the case that Theranos devices failed often and were not accurate compared to traditional blood-testing machines, which could prove crucial to the prosecution's claims that Holmes touted technology she knew didn't work — if they can prove she was aware of the problems.

Cheung eventually left Theranos and is now known as one of the whistleblowers who first sounded the alarm about the company. She is the second witness in the blockbuster case, following testimony from the company's former controller about the company's financials.

In March 2014, 25.6% of quality control runs on Edison devices failed, according to a spreadsheet shown in court. For one of the thyroid tests, the failure rate in quality control runs was 51.3%, according to the data.

"Was March an especially bad month for [quality control] at Theranos?" asked Assistant U.S. Attorney John Bostic.

"No, this was pretty standard," Cheung testified.

Erika Cheung Erika Cheung, a Theranos employee turned whistleblower, speaks at a film-industry event in 2019.Photo: Jeff Kravitz/FilmMagic for HBO/Getty Images

She called the level of failures "immensely concerning," since labs would want to see less than 1% failing. While Theranos did remove machines that were failing control tests from the lab until they were fixed, Cheung said that the level of problems that she found running the tests in the research lab made her concerned about the results patients would ultimately get.

"You would have about the same luck flipping a coin on whether your results were right or wrong," she said, describing her concerns about the thyroid test.

She also testified that the company had a habit of "cherry-picking data" and deleting outlier information. There was no standard for what outlier data was so the company would often delete two out of six in tests, typically when something was wrong, she said.

"There were no rules. There were no protocols," she said. (The defense did show later some of the company's validation reports that did disclose when outliers had been deleted or that contained all data.)

The company also prepared proficiency tests that compared the Edisons' performance to off-the-shelf testing devices. In the test, vitamin D levels measured by the Theranos Edison were three times higher than what the standard devices measured, Cheung said. On a different test, the company re-ran the numbers a second time, she testified. On the off-the-shelf devices, the values stayed the same each time it was run, but on the Theranos devices, it reported new values for the same blood, according to Cheung.

Cheung said she had tried communicating the challenges to many people at the company, including Sunny Balwani, whom she met with directly. Balwani, who is also facing fraud charges related to his time as chief operating officer at Theranos, is set for a separate trial in January. Cheung said Balwani seemed irritated by her discussing it and told her she should just run the tests.

She also had dinner with George Shultz, a Theranos board member and grandfather to Tyler Shultz, one of Cheung's co-workers. Cheung had shared data with Tyler Shultz that supported some of her concerns about the lab quality. Tyler Shultz ended up emailing Holmes with a detailed letter of his concerns about the company, but Cheung said she never contacted Holmes directly herself.

Holmes' defense has tried to distance the CEO from challenges in the lab and show they were the responsibility of a lot of people other than Holmes. In their cross-examination of Cheung, they asked her to explain who reported to whom at Theranos. A frequent question was whether a given Theranos employee had a Ph.D. (a degree neither Holmes nor Cheung have).

Cheung ultimately left Theranos in 2014. She had begun talking to a Wall Street Journal reporter the following year when she noticed a black SUV outside of her new employer. When she left work, a man jumped out of the SUV and hand-delivered a letter from David Boies, Theranos' attorney, warning her against sharing trade secrets and defamation or else it would pursue litigation. Undaunted, Cheung said she called the Centers for Medicare and Medicaid Services, which regulates laboratory testing, and ended up filing a letter with the agency outlining her concerns.

Beyond discussing the letter from Boies, Cheung wasn't asked much about her experience as a whistleblower. The judge blocked the prosecution from allowing Cheung to talk about her current job of running a nonprofit called Ethics in Entrepreneurship.

Her testimony will continue on Friday.

See Protocol's in-depth coverage of the Theranos trial for more.

Workplace

It's OK to cry at work

Our comfort with crying at work has changed drastically over the past couple years. But experts said the hard part is helping workers get through the underlying mental health challenges.

Tech workers and workplace mental health experts said discussing emotions at work has become less taboo over the past couple years, but we’re still a ways away from completely normalizing the conversation — and adjusting policies accordingly.

Photo: Teerasak Ainkeaw / EyeEm via Getty Images

Everyone seems to be ugly crying on the internet these days. A new Snapchat filter makes people look like they’re breaking down on television, crying at celebratory occasions or crying when it sounds like they’re laughing. But one of the ways it's been used is weirdly cathartic: the workplace.

In one video, a creator posted a video of their co-worker merely sitting at a desk, presumably giggling or smiling, but the Snapchat tool gave them a pained look on their face. The video was captioned: “When you still have two hours left of your working day.” Another video showed someone asking their co-workers if they enjoy their job. Everyone said yes, but the filter indicated otherwise.

Keep Reading Show less
Sarah Roach

Sarah Roach is a news writer at Protocol (@sarahroach_) and contributes to Source Code. She is a recent graduate of George Washington University, where she studied journalism and mass communication and criminal justice. She previously worked for two years as editor in chief of her school's independent newspaper, The GW Hatchet.

Sponsored Content

Foursquare data story: leveraging location data for site selection

We take a closer look at points of interest and foot traffic patterns to demonstrate how location data can be leveraged to inform better site selecti­on strategies.

Imagine: You’re the leader of a real estate team at a restaurant brand looking to open a new location in Manhattan. You have two options you’re evaluating: one site in SoHo, and another site in the Flatiron neighborhood. Which do you choose?

Keep Reading Show less
Enterprise

Arm’s new CEO is planning the IPO it sought to avoid last year

Arm CEO Rene Haas told Protocol that Arm will be fine as a standalone company, as it focuses on efficient computing and giving customers a more finished product than a basic chip core design.

Rene Haas is taking Arm on a fresh trajectory.

Photo: Arm

The new path for Arm is beginning to come into focus.

Weeks after Nvidia’s $40 bid to acquire Arm from SoftBank collapsed, the appointment of Rene Haas to replace longtime chief executive Simon Segars has set the business on a fresh trajectory. Haas appears determined to shake up the company, with plans to lay off as much as 15% of the staff ahead of plans to take the company public once again by the end of March next year.

Keep Reading Show less
Max A. Cherney

Max A. Cherney is a senior reporter at Protocol covering the semiconductor industry. He has worked for Barron's magazine as a Technology Reporter, and its sister site MarketWatch. He is based in San Francisco.

Policy

The great onshoring: Inside the transcontinental chip race

The second annual Trade and Technology Council emphasized the centrality of semiconductor onshoring to U.S.-EU military objectives.

For chip manufacturers, free-flowing subsidies for now might come at the cost of a potential overcapacity problem in the longer term.

Illustration: Christopher T. Fong/Protocol

The prospect of global conflict permeated the room at this year’s Trade and Technology Council, which concluded in France earlier this week. The second annual gathering of U.S. and EU officials yielded a joint statement that mentioned some form of “Russia” or “Ukraine” more frequently than “technology,” “regulation,” “investment,” “security” or “competition.”

The conflict in Ukraine, having already escalated into a U.S. proxy war, seemingly convinced the EU to fall in line with the American tech policy agenda.

Keep Reading Show less
Hirsh Chitkara

Hirsh Chitkara ( @HirshChitkara) is a reporter at Protocol focused on the intersection of politics, technology and society. Before joining Protocol, he helped write a daily newsletter at Insider that covered all things Big Tech. He's based in New York and can be reached at hchitkara@protocol.com.

Climate

2- and 3-wheelers dominate oil displacement by EVs

Increasingly widespread EV adoption is starting to displace the use of oil, but there's still a lot of work to do.

More electric mopeds on the road could be an oil demand game-changer.

Photo: Humphrey Muleba/Unsplash

Electric vehicles are starting to make a serious dent in oil use.

Last year, EVs displaced roughly 1.5 million barrels per day, according to a new analysis from BloombergNEF. That is more than double the share EVs displaced in 2015. The majority of the displacement is coming from an unlikely source.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

Latest Stories
Bulletins