Walgreens had been a key partner to Theranos, which promised a device that could perform a wide variety of blood tests, essentially a full lab replication. The deal with Walgreens, which is considered the most visible and potentially lucrative partner of Theranos, included test centers in stores in 40 locations. But when his vision collapsed, after it was claimed that Theranos performed many of its tests on standard equipment, Walgreens sued the start-up for $140 million.
Former Safeway CEO Testifies He Was Frustrated With Elizabeth Holmes Over Blood Test Technology Delays
“I understand that the blood would be tested for the… [Theranos] Edison device,” Miquelon said, adding later, “My understanding is that the basic level testing could do 96 percent of the testing in labs.”
He said he was unaware that Theranos would conduct tests on custom third-party devices, as prosecutors allege, and said any use of standard third-party devices would be for calibration and accuracy purposes. Relying on standard equipment and couriers, he said, would take away the cost advantage of a partnership.
Instead, prosecutors argue, Theranos ran tests on standard equipment, something that would have taken Theranos backers and many high-profile investors by surprise.
Holmes is on trial in federal court on charges of misleading patients and investors about Theranos’ abilities. She is charged with a dozen counts of wire fraud and conspiracy to commit wire fraud.
She has pleaded not guilty.
“This was one of the most exciting companies we’d seen, perhaps not just in the lab, but in general,” Miquelon said in testimony Tuesday, according to the Wall Street Journal.
Miquelon’s testimony followed former Safeway CEO Steven Burd, who described how he was lured by Holmes’ high-flying promises but grew increasingly frustrated by the start-up’s missed deadlines and persistent delays.
Burd’s testimony ended Tuesday and Miquelon’s, which began shortly after, was to last much of the day on Wednesday.
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Documents submitted by prosecutors detail Walgreens and Theranos’ ambitious plans for their partnership, which would begin with a pilot and slowly expand to a national rollout if successful. Internal presentations to Walgreens reflected Theranos’ promise of “lowest cost, highest quality testing with a fingerstick” as opposed to a vein.
The Theranos method required “99.9 percent less blood,” according to an internal presentation shown by prosecutors. It also promised a “State of the art result cover” from 4 to 24 hours.
The documents showed clear launch plans for Walgreens stores, with the first launch in 2012, a second launch in early to mid-2013 promising tests with results in 30 minutes or less, and finally a launch that sees Theranos’ “Minilabs” in all Walgreens stores. stores were placed.
At a cross-examination of Miquelon on Wednesday afternoon, a Holmes attorney attempted to demonstrate that the Theranos-Walgreens partnership was evolving, including an agreement in the summer of 2012 that would change the business model. Testing would not be done in stores, but would instead be conducted off-site, eliminating the ability to produce a result in 15 to 30 minutes.
Miquelon agreed with the characterization of Holmes’ lawyer.