From our correspondent in California,
Bill Clinton presented her as a prodigy. Joe Biden as a visionary. She made the front page of Forbes, Business Week and Fortune. With her iconic black turtleneck, comparisons with Steve Jobs rocketed, and Elizabeth Holmes was one of the youngest “self-made” billionaires – in paper – in Silicon Valley. Until it all fell apart, when two whistleblowers and the Wall Street Journal reveal, in 2015, that Theranos’ supposedly revolutionary machines never worked.
As the pleadings of her trial open Wednesday in San Jose, Elizabeth Holmes faces her biggest challenge: trying to convince the jury that she never intended to deceive the investors, who injected 700 million of dollars in the start-up. Left to discard on his former right arm – and ex-lover – that his lawyers present as an abusive partner.
A meticulously crafted image
Like Steve Jobs, Elizabeth Holmes joined Stanford, where she began studying chemistry-engineering. Like her model, she becomes a “drop-out”, and slams the door of the prestigious university after having filed a first patent. At 19, in 2003, she founded a start-up which became Theranos. Her former Stanford mentor, Channing Robertson, supports her and opens the portfolios of venture capitalists of Silicon Valley.
For ten years, Theranos remained in “stealth mode”, this period during which a start-up operated in the greatest secrecy. But in 2013, it is the explosion. Elizabeth Holmes goes on the offensive in the media, with a style – a black turtleneck – borrowed from Steve Jobs and an amazing deep voice. Like many things with the young leader, this register would be far from authentic: a former teacher says that his voice has radically changed, and this can sometimes be heard in an interview.
my favorite part of the Elizabeth Holmes scandal is Insider Edition doing a deep dive on her voice. pic.twitter.com/hsn8W8QdXL https://t.co/mvXBmbcKCn
– 🧡 🌅 🌼 (@IsntDaveOne) August 31, 2021
Theranos promises to revolutionize medical testing with a machine capable of doing more than 200 tests with a single drop of blood. Elizabeth Holmes swears whoever believes her that she will offer “cheaper and faster” tests and “democratize access to medical data”. How? ‘Or’ What ? Industrial secret. But whatever, Silicon Valley and the media are under the spell. Former Secretary of State George Shultz joined the board, as did General Mattis – before he became Donald Trump’s Defense Secretary.
Tests carried out with competitor machines
In 2014, Theranos is valued at $ 9 billion. At 30, Elizabeth Holmes is worth, according to Forbes, 4.5 billion. The company announces a juicy partnership and deploys its machines in some forty pharmacies of the giant Walgreens, with the prospect of extending it to several thousand establishments.
The honeymoon does not last. The journalist of Wall Street Journal John Carreyrou published at the end of 2015 a series of explosive articles based on the testimonies of two then anonymous whistleblowers. Two ex-employees, Erika Cheung and Tyler Shultz – George Shultz’s grandson – claim that Theranos’ revolutionary machines never worked properly, and that executives are forcing researchers to erase the erroneous results. Worse, they reveal that a large part of the analyzes in Walgreens pharmacies is carried out via conventional blood tests, with tubes then mailed to a nearby center, where they are analyzed by machines bought from competitors.
The fall
At first, Elizabeth Holmes rallies her troops. But in the spring of 2018, the company, which had up to 800 employees, closed its doors. Thousands of faulty tests have led patients to believe their diabetes or cancer is back. Criminal charges follow: Elizabeth Holmes and Ramesh “Sunny” Balwani, her former COO, are charged with nine counts of fraud and two “criminal conspiracy”, punishable by 20 years imprisonment.
To prove their claims, prosecutors will have to show that the executives intentionally deceived investors. According to documents made public, the lawyers of the young woman, who married and gave birth to a baby boy last July, intend to discard on her former right arm, which will be tried next year. They claim that their client, who had an affair with Sunny Balwani, 19 years her senior, was “under his influence” and was “sexually, physically and emotionally abused” by her ex-partner. In this trial, which is expected to last four months, Elizabeth Holmes could choose to testify. It remains to be seen which voice she will use.