A former lab director says Theranos 'valued PR and fundraising' over patients

Adam Rosendorff said he felt pressured to vouch for tests he did not have confidence in. His testimony appeared to tie Holmes more closely to the lab's failures.

Elizabeth Holmes

Elizabeth Holmes leaves the San Jose courthouse where her fraud trial is underway.

Photo: Jane Tyska/Digital First Media/The Mercury News via Getty Images

Former Theranos lab director Adam Rosendorff testified Friday that he repeatedly raised the alarm about bad blood tests to then-CEO Elizabeth Holmes, ultimately concluding that the company valued press and funding more than the patients.

"I was very enthusiastic working at Theranos in the beginning. Over time, I came to realize that the company really valued PR and fundraising above patient care, and I became very disillusioned," Rosendorff said on the witness stand inside the San Jose courtroom where Holmes' trial on fraud charges began this month.

The testimony of the Theranos lab director repeatedly tied Holmes to the problems at the Theranos lab, showing the CEO was well aware of the issues and included directly in complaints about the quality of the tests. She is facing charges of fraud and conspiracy to commit fraud against patients and investors. In order to prove its case, the U.S. government has to convince the jury to agree that Holmes had an intent to deceive and reject the defense's argument that she was a young CEO whose startup failed to live up to its promise.

During his testimony, Rosendorff said he felt pressured by upper management to vouch for tests he felt were "wrong." Holmes, accused co-conspirator Sunny Balwani, Daniel Young and Holmes' brother Christian were "pushing" him to rationalize or justify erroneous results, he testified: "Anything other than saying our test is inaccurate."

"At one point I started to refuse to talk to physicians. I believe I told one or two physicians that I didn't believe in the results," he added.

Rosendorff joined Theranos in early 2013 before Theranos tests were commercially available, and he was intrigued by the idea of running tests on a fingerprick of blood. "I thought it was going to be the next Apple," he said.

By that summer, a few months after joining, Rosendorff was already looking for a new job. Theranos had struck a deal with Walgreens to test patients' blood inside of the stores and was gearing up for a commercial launch in September 2013. But emails entered as evidence in the case showed that even nine days before the launch, none of Theranos' proprietary tests had been validated for use on patients.

Rosendorff raised the alarm specifically with Holmes, sending an email titled "Concerns about the launch" and asked her to delay it for a few weeks. He recounted that he met directly with Holmes in her office after the email, where she had taped on her window a paper countdown of the number of days left until going live.

"She was not her usual composed self. She was trembling," he said. When he raised his concerns, he said Holmes did not seem surprised to hear them, but was "nervous and upset." Despite his reservations, the launch went ahead as planned.

Rosendorff's concerns about the tests only amplified from there. During the roughly six hours of testimony, Assistant U.S. Attorney John Bostic spent much of it going over the accuracy of several Theranos tests that were run on its own devices or modified third-party machines. The tests included hCG levels, which are crucial to determine pregnancy, as well as cholesterol and potassium levels.

In each case, Rosendorff had expressed concern about tests being out of range, often failing quality control, and ultimately delivering incorrect results to the patients. One example which had come up in earlier testimony was about a pregnant patient whose results wrongly told her she was miscarrying when she in fact was still pregnant. Rosendorff told Holmes he was "freaking out" about the problems with the hCG tests, but she didn't seem alarmed, he said.

In an all-caps email in May 2014, Rosendorff made the call to ban the lab from running the hCG tests on Theranos devices and insisted they use the third-party devices from other manufacturers. It wasn't until he was shown emails during testimony that he found out that some employees had continued to use Theranos' proprietary devices against his orders.

In another case, the company returned potassium levels and sodium levels out of the typical ranges for blood tests far more often than he had seen in other labs. Eventually Theranos stopped reporting the results of any patients whose levels were outside of the expected ranges for certain tests like sodium.

In an email to Holmes, Rosendorff questioned the utility of the test for patients if abnormal results couldn't be delivered to the patient: "I am not sure of the clinical value of a sodium assay in which the only time as we can report it is when it is not critical, and the very situations that require accurate measurement and reporting of abnormal sodium results are voided."

Instead of removing the sodium test from the order menu, Theranos decided to simply report to patients that the results were voided and made it seem like a temporary thing, he said. Rosendorff felt like this was misleading doctors, because often they would specifically be testing for those things if they had come out of range.

Ultimately, Holmes' brother Christian, who handled customer complaints at the lab, also raised concerns directly to his sister in a September 2014 email. "I am always confident in our technology, but it's pretty obvious we have issues with calcium, potassium and sodium specifically," he wrote.

By that point, Rosendorff said he had entirely lost confidence in the technology and that the issue was broader than the three tests.

Eventually, Rosendorff started forwarding messages that documented concerns with a variety of tests to his personal Gmail account, in violation of the company's nondisclosure agreements.

"I wasn't confident that Theranos would preserve these emails in the event of a CMS and government investigation," Rosendorff said, referring to the agency that regulated labs like Theranos. "I wanted to protect myself."

He eventually left Theranos at the end of 2014, disillusioned by the startup that he once thought would be the next Apple. Today, Rosendorff doesn't even list Theranos on his LinkedIn by name.

Rosendorff's testimony is expected to continue in the Theranos trial on Tuesday. Follow Protocol's coverage of the Theranos trial here.

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