Theranos ex-COO and President Balwani will be sentenced on Nov. 15, while former CEO Elizabeth Holmes has her sentencing on Sept. 26
Observers within the clinical laboratory industry likely were not surprised to hear that Ramesh “Sunny” Balwani was convicted on Thursday of 12 counts of fraud related to his work at disgraced medical laboratory testing startup Theranos.
After all, Balwani’s conviction comes six months after a similar verdict for Elizabeth Holmes, the former founder and CEO of Theranos. The two were romantically involved during their time at the company.
A jury in San Jose deliberated for several days before reaching the guilty verdict against Balwani, 57, on a dozen counts of wire fraud and conspiracy to commit wire fraud. He is the former chief operating officer and president at the Theranos. Holmes was convicted of four counts in January.
“The jury concluded that Balwani perpetrated frauds on unsuspecting patients,” Stephanie Hinds, US Attorney for the Northern District of California, told the press after the verdict.
Balwani didn’t provide any comments to the two dozen or so reporters and photographers who followed him as he left the courthouse.
Ramesh “Sunny” Balwani leaves the courthouse after being convicted on 12 counts of fraud during his Theranos trial.
Balwani, Like Holmes, Faces 20 Years Behind Bars
Balwani will be sentenced on Nov. 15, reported NBC Bay Area. Holmes is scheduled to be sentenced on Sept. 26. She and Balwani each face up to 20 years in prison on each count, although a judge could allow those terms to run concurrently for each individual.
At the core of Balwani’s trial was whether he knew that Theranos allegedly defrauded patients and investors about its proprietary Edison blood-testing machine. The government argued that Balwani realized the Edison analyzer did not work and that he should have informed investors about the poor accuracy of the equipment.
In the end, the jury did not believe Balwani’s contention that he was merely an investor who let Holmes steer business matters at Theranos. Jurors saw text messages between Balwani and Holmes that defied that defense strategy.
For example, in one text to Holmes, Balwani wrote, “I am responsible for everything at Theranos,” NBC Bay Area reported during the trial.
A profile on Balwani published in March 2022 by The Cut, a website affiliated with New York magazine, also pushed the idea he had influence. “While many questions remain about Balwani’s role in the Theranos scheme, he definitely wielded a lot of power at the company,” The Cut reported.
Balwani and Holmes were indicted by federal prosecutors in June 2018. The indictments followed a three-year investigation by the government, which occurred after a blockbuster series of articles by the Wall Street Journal that detailed complaints from whistleblowers who formerly worked at Theranos.
Balwani never took the stand in his own defense. However, during closing arguments, his attorney, Jeffrey Coopersmith, JD, said Holmes’ charm influenced Balwani, much like it did Theranos investors.
“There’s no reason why he wouldn’t have seen the exact same thing: the charisma, the drive, the vision, the goal to change diagnostic testing. And he bought into that vision,” Coopersmith told the jury, as reported by Bloomberg. “He bought into that vision not only with his time but also with his own money,” investing $4.6 million in Theranos.
Compared to Holmes’ trial, which attracted huge media attention from around the world, Balwani’s proceedings occurred to much less hype and fanfare, given he was not as well known as Holmes to the general public and press.
—Scott Wallask
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Ultima Genomics says it is emerging from “stealth mode” with millions in fresh capital and technology capable of sequencing whole human genomes for a fraction of the cost
Investors seem to be optimistic that an emerging genetics company has the proprietary solution to sequence a whole human genome for just $100. If true, this is a development that would be of interest to clinical laboratory managers and pathologists.
The company, Ultima Genomics of Newark, Calif., recently announced that it had raised $600 million from the investment community. In a press release last month, the company announced it has “emerged from stealth mode with a new high-throughput, low-cost sequencing platform that delivers the $100 genome.”
The press release goes on to state that Ultima will unleash a new era in genomics-driven discoveries by developing a “fundamentally new sequencing architecture designed to scale beyond conventional approaches, including completely different approaches to flow cell engineering, sequencing chemistry, and machine learning.”
Are we at the cusp of a revolution in genomics? Ultima Genomics’ founder and CEO, Gilad Almogy, PhD, believes so.
“Our architecture is intended for radical scaling, and the $100 genome is merely the first example of what it can deliver,” he said in the press release. “We are committed to continuously drive down the cost of genomic information until it is routinely used in every part of the healthcare system.”
From an Estimated Cost of $3 Billion to $450 in Just 30 Years!
Whole genome sequencing (WGS) has decreased dramatically in cost since research into the technology required got started in the early 1990s with the publicly-funded Human Genome Project. At that time, the cost to sequence the entire human genome was estimated at around $3 billion. Then, in 1998, John Craig Venter created Celera Genomics (now a subsidiary of Quest Diagnostics) and was the first to sequence the whole human genome (his own) and at a significantly lower cost of around $300 million.
The cost continued to drop as technology improved. In 2001, the cost to sequence the whole human genome hovered around $100 million. Twenty years later that cost had dropped to about $450/sequence, according to data compiled by the National Human Genome Research Institute (NHGRI), a division of the National Institutes of Health (NIH).
When DNA sequencer Illumina announced in 2014 the arrival of the $1,000 genome, the news was expected to put whole genome sequencing on the road to becoming routine, Forbes reported. But that prediction didn’t pan out.
Ultima Genomics’ $100 price point, however, could be game changing. It would make the cost of decoding a human genome affordable for nearly everyone and accelerate the growth of personalized medicine in clinical laboratory diagnostics.
Applied Physics versus Biological Sciences
According to GEN, Almogy brings a tech background to Ultima—his PhD is in applied physics, not the biological sciences. He founded Ultima in 2016 after serving as founder, president, and CEO at Fulfil Solutions, a manufacturer of custom automation robotics systems. At Ultima, his goal is to “unleash the same relentless scaling in sequencing” that was used to drive down the cost of computing power and transform modern life.
“Ultima is the real deal, with good technology,” Raymond McCauley, cofounder and Chief Architect at BioCurious, and Chair of Digital Biology at Singularity Group, told Singularity Hub. “They’ve been working on an Illumina killer for years.”
“We designed our new sequencing architecture to scale beyond conventional technologies, and are excited to soon make the UG 100, our first instrument using this architecture, commercially available to more customers,” said Gilad Almogy, PhD (above), Ultima Genomics’ founder and CEO, in a press release. “In the future, we aim to continuously improve our technology, further drive down costs, and increase the scale of genomic information to improve patient outcomes.” At $100/sequence, whole genome sequencing may well become commonly available to improve precision medicine diagnostics and clinical laboratory testing. (Photo copyright: Ultima Genomics.)
TechCrunch reported that Ultima’s UG100 sequencing machine and software platform can perform a complete sequencing of a human genome in about 20 hours, with precision comparable to existing options, but does so at a far lower cost per gigabase (Gb), equal to one billion base pairs.
According to the Ultima Genomics website, its breakthroughs include:
An open substrate that creates a massive, low-cost reaction surface that delivers many billions of reads while avoiding costly flow cells and complicated fluidics.
Novel scalable chemistry that combines the speed, efficiency, and read lengths of natural nucleotides with the accuracy and scalability of endpoint detection.
A revolutionary sequencing hardware that uses spinning circular wafers that enable efficient reagent use, zero crosstalk, and ultra-high-speed scanning of large surfaces.
“We may be on the brink of the next revolution in sequencing,” Beth Shapiro, DPhil, an evolutionary molecular biologist at the University of California, Santa Cruz (UCSC), told Science. Shapiro is a professor of ecology and evolutionary biology and an HHMI Investigator at UCSC and Director of Evolutionary Genomics at the UCSC Genomics Institute.
Ultima Genomics maintained a low profile since its founding six years ago. But that changed in May when it announced it had raised $600 million from multiple investors, including:
Affordable Genomics Will Lead to ‘Millions of Tests per Year’
Exact Sciences’ Chairman and CEO Kevin Conroy—whose Wisconsin-based molecular diagnostics company recently entered into a long-term supply agreement for Ultima Genomic’s NGS technologies—believes low-cost genomic sequencing will improve cancer screening and disease monitoring.
“Exact Sciences believes access to differentiated and affordable genomics technologies is critical to providing patients better information before diagnosis and across all stages of cancer treatment,” Conroy said in a press release. “Ultima’s mission to drive down the cost of sequencing and increase the use of genomic information supports our goal to provide accurate and affordable testing options across the cancer continuum. This is particularly important for applications like cancer screening, minimal residual disease, and recurrence monitoring, which could lead to millions of tests per year.”
GEN pointed out that Ultima’s 20-hour turnaround time is fast and its quality on par with its competitors, but that it is Ultima’s $1/Gb price (noted in the preprint) that will set it apart. That cost would be a fraction of Illumina’s NextSeq ($20/Gb) and Element Biosciences’ AVITI ($5/Gb).
Almogy told TechCrunch that Ultima is working with early access partners to publish more proof-of-concept studies showing the capabilities of the sequencing technique, with broader commercial deployment of the technology in 2023. Final pricing is yet to be determined, he said.
If the $100 genome accelerates the pace of medical discoveries and personalized medicine, clinical laboratory scientists and pathologists will be in ideal positions to capitalize on what the executives and investors at Ultima Genomics hope may become a revolution in whole human genome sequencing and genomics.
Factors contributing to shortage of med techs and other lab scientists include limited training programs in clinical laboratory science, pay disparity, and staff retention, notes infectious disease specialist Judy Stone, MD
Staff shortages are a growing challenge for medical laboratories, and now the problem has grabbed the attention of a major media outlet.
In a story she penned for Forbes, titled, “We’re Facing a Critical Shortage of Medical Laboratory Professionals,” senior contributor and infectious disease specialist Judy Stone, MD, wrote, “Behind the scenes at every hospital are indispensable medical laboratory professionals. They performed an estimated 13 billion laboratory tests in the United States each year before COVID. Since the pandemic began, they have also conducted almost 997 million diagnostic tests for COVID-19. The accuracy and timeliness of lab tests are critically important, as they shape approximately two-thirds of all medical decisions made by physicians.”
Though Stone states in her Forbes article that clinical laboratories in both the US and Canada are facing staff shortages, she notes that the problem is more acute in the US.
As Dark Daily reported in February, the so-called “Great Resignation” caused by the COVID-19 pandemic has had a severe impact on clinical laboratory staffs, creating shortages of pathologists as well as of medical technologists, medical laboratory technicians, and other lab scientists who are vital to the nation’s network of clinical laboratories.
In her analysis, however, Stone accurately observes that the problem pre-dates the pandemic. For examples she cites two surveys conducted in 2018 by the American Society for Clinical Pathology (ASCP):
Many pathologists and clinical laboratory managers would agree that Stone is right. Dark Daily has repeatedly reported on growing staff shortages at clinical laboratories worldwide.
And in “Lab Staffing Shortages Reaching Dire Levels,” Dark Daily’s sister publication, The Dark Report, noted that CAP Today had characterized the current lab staffing shortage as going “from simmer to rolling boil” and that demand for medical technologists and other certified laboratory scientists far exceeds the supply. Consequently, many labs now use overtime and temp workers to handle daily testing, a strategy that has led to staff burnout and more turnover.
“There is a critical shortage of medical laboratory professionals in the US, and in Canada to a lesser extent,” wrote infectious disease specialist Judy Stone, MD (above), in an article she penned for Forbes. “Here [in the US],” she added, “we are 20-25,000 short on staff, with only 337,800 practicing. That is roughly one medical laboratory scientist per 1,000 people.” Clinical laboratories are well aware of the problem. A solution to solve it and return labs to former staffing levels is proving elusive. (Photo copyright: Forbes.)
Why the Shortfall?
In her Forbes article, Stone notes the following as factors behind the shortages:
Decline in training programs. “There are only [approximately] 240 medical laboratory technician and scientist training programs in the US, a 7% drop from 2000,” Stone wrote, adding that some states have no training programs at all. She notes that lab technicians must have a two-year associate degree while it takes an average of five years of post-secondary education to obtain a lab science degree.
Pay disparities. Citing data from the ASCP, Stone wrote that “medical lab professionals are paid 40%-60% less than nurses, physical therapists, or pharmacists.” Moreover, given the high cost of training, “many don’t feel the salary is worth the high investment,” she added.
Staff retention. In the ASCP’s 2018 job satisfaction survey, 85.3% of respondents reported burnout from their jobs, 36.5% cited problems with inadequate staffing, and nearly that many complained that workloads were too high.
Inconsistent licensing requirements. These requirements “are different from state to state,” Stone wrote. For example, the American Society for Clinical Laboratory Science (ASCLS) notes that 11 states plus Puerto Rico mandate licensure of laboratory personnel whereas others do not. Each of those states has specific licensing requirements, and while most offer reciprocity for other state licenses, “California [for example] does not recognize any certification or any other state license.”
In a 2018 report, “Addressing the Clinical Laboratory Workforce Shortage,” the ASCLS cited other factors contributing to the shortages, including retirement of aging personnel and increased demand for lab services.
Possible Solutions
Stone suggested the following remedies:
Improve working conditions. “We need to reduce the stress and workload of the lab professionals before we reach a greater crisis,” Stone wrote.
Standardize state certification. This will facilitate “mobility of staff and flexibility in responding to needs,” Stone suggested.
Improve education and training opportunities. The ASCLS has called for clinical lab science to be included in the Title VII health professions program, which provides funding for healthcare training. Rodney Rohde, PhD, a clinical laboratory science professor at Texas State University, “also suggests outreach to middle and high school STEM programs, to familiarize students early with career opportunities in the medical laboratory profession,” Stone wrote.
Recruit foreign workers. Stone suggested this as an interim solution, with programs to help them acclimate to practice standards in the US.
It will likely take multiple solutions like these to address the Great Resignation and bring the nation’s clinical laboratory staffing levels back to full. In the meantime, across the nation, a majority of clinical laboratories and anatomic pathology groups operate short-staffed and use overtime and temporary workers as a partial answer to their staffing requirements.
Wearable microneedle sensors that track multiple biomarkers in interstitial fluid are finding their way into chronic disease monitoring and sample collecting for clinical laboratory testing
Wearable devices that replace finger sticks and blood draws for monitoring biomarkers of chronic diseases such as diabetes are the holy grail of non-invasive (or at least minimally invasive) technologies that collect specimens for clinical laboratory testing.
Now, in their quest for alternatives to invasive phlebotomy blood draws, engineers at University of California San Diego’s (UCSD) Center for Wearable Sensors have added their own wearable device to the mix. The scientists developed a “lab-on-the-skin” multi-tasking microneedle sensor that monitors multiple biomarkers simultaneously, according to a UCSD news release.
“This is like a complete lab on the skin,” said Joseph Wang, PhD (above), Distinguished Professor of Nanoengineering at UC San Diego and Director of UCSD’s Center of Wearable Sensors, in a news release. “It is capable of continuously measuring multiple biomarkers at the same time, allowing users to monitor their health and wellness as they perform their daily activities.” UC San Diego’s microneedle patch for monitoring biomarkers of disease certainly would be popular with patients who must regularly undergo painful blood draws for clinical laboratory testing. (Photo copyright: UC San Diego.)
Advantage of Monitoring Multiple Biomarkers in Real Time
While current glucose monitors on the market only measure glucose, the UCSD wearable device also monitors alcohol and lactate, providing other additional information to diabetics when engaged in activities that affect those biomarkers.
For example, UCSD’s microneedle sensor allows diabetics to monitor their glucose level when drinking alcohol, which can lower glucose levels. Additionally, monitoring lactate while exercising also could be beneficial since physical activity influences the body’s ability to regulate glucose.
“With our wearable, people can see the interplay between their glucose spikes or dips with their diet, exercise, and drinking of alcoholic beverages. That could add to their quality of life as well,” said Farshad Tehrani, a nanoengineering PhD graduate researcher in Wang’s lab at UCSD and one of the co-first authors of the study, in the news release.
UC San Diego’s wearable microneedle patch (above) is about the size of a stack of six quarters and simultaneously monitors glucose, alcohol, and lactate levels continuously. It affixes to the skin through a patch of microneedles each about one-fifth the width of a human hair. The microneedles barely penetrate the surface of the skin to sample biomolecules in the interstitial fluid and are not painful. The quarter-sized patch is worn on the upper arm and transmits its data to a smartphone app. The microneedle patch is disposable, and the reusable electronic case is rechargeable using an off-the-shelf wireless charging pad. (Photo copyright: Laboratory for Nanobioelectronics/UC San Diego.)
Other Microneedle Wearable Monitoring Patches
The quest for a painless alternative to in-patient blood draws for many clinical laboratory tests has been ongoing worldwide for years.
In “Researchers Develop ‘Smart’ Microneedle Adhesive Bandage System for Monitoring Sodium, Glucose, pH, and More,” Dark Daily reported on a proof-of-concept study conducted by scientists from Israel and China who developed a “smart” microneedle adhesive bandage that measures and monitors in real time three critical biomarkers that currently require invasive blood draws for medical laboratory tests commonly performed on patients in hospitals.
While further research and validation of studies are needed before UC San Diego’s wearable microneedle sensor patch can be deployed to monitor chronic diseases, it is in good company. Diabetics and other suffers of similar chronic diseases can look forward to a future where they can monitor their health conditions in real time without the need for invasive blood draws and clinical laboratory testing.
Should the device prove effective, it could replace invasive point-of-care blood draws for clinical laboratory testing during patient drug therapy monitoring
What if it were possible to perform therapeutic drug monitoring (TDM) without invasive blood draws using breath alone? Patients fighting infections in hospitals certainly would benefit. Traditional TDM can be a painful process for patients, one that also brings risk of bloodline infections. Nevertheless, regular blood draws have been the only reliable method for obtaining viable samples for testing.
One area of critical TDM is in antibiotic therapy, also known as personalized antibiotherapy. However, for antibiotic therapy to be successful it typically requires close monitoring using point-of-care clinical laboratory testing.
Now, a team of engineers and biotechnologists from the University of Freiburg in Germany have developed a biosensor that can use breath samples to measure antibiotic concentrations present in blood, according to a University of Freiburg press release.
The team’s non-invasive collection method requires no needle sticks and can allow for frequent specimen collections to closely monitor the levels of an antibiotic prescribed for a patient. The biosensor also provides physicians the ability to tailor antibiotic regimens specific to individual patients, a core element of precision medicine.
“Until now researchers could only detect traces of antibiotics in the breath,” said Can Dincer, PhD (above), Junior Research Group Leader at the University of Freiburg, and one of the authors of the study, in the press release. “With our synthetic proteins on a microfluid chip, we can determine the smallest concentrations in the breath condensate and [how] they correlate with the blood values.” Should the breath biosensor prove effective in clinical settings, painful blood draws for clinical laboratory testing at the point of care could become obsolete. (Photo copyright: Conny Ehm/University of Freiburg.)
Can a Breath Biosensor Be as Accurate as Clinical Laboratory Testing?
The University of Freiburg’s biosensor is a multiplex, microfluid lab-on-a-chip based on synthetic proteins that react to antibiotics. It allows the simultaneous measurement of several breath samples and test substances to determine the levels of therapeutic antibiotics in the blood stream.
To perform their research, the University of Freiburg team tested their biosensor on blood, plasma, urine, saliva, and breath samples of pigs that had been given antibiotics. The results the researchers achieved with their device using breath samples were as accurate as standard clinical laboratory testing, according to the press release.
The microfluidic chip contains synthetic proteins affixed to a polymer film via dry film photoresist (DFR) technology. These proteins are similar to proteins used by drug-resistant bacteria to sense the presence of antibiotics in their environment. Each biosensor contains an immobilization area and an electrochemical cell which are separated by a hydrophobic stopping barrier. The antibiotic in a breath sample binds to the synthetic proteins which generates a change in an electrical current.
“You could say we are beating the bacteria at their own game,” said Wilfried Weber, PhD, Professor of Biology at the University of Freiburg and one of the authors of the research paper, in the press release.
Rapid Monitoring at Point-of-Care Using Breath Alone
The biosensor could prove to be a useful tool in keeping antibiotic levels stable in severely ill patients who are dealing with serious infections and facing the risk of sepsis, organ failure, or even death. Frequent monitoring of therapeutic antibiotics also could prevent bacteria from mutating and causing the body to become resistant to the medications.
“Rapid monitoring of antibiotic levels would be a huge advantage in hospital,” said H. Ceren Ates, PhD, scientific researcher at the University of Freiburg and one of the authors of the study in the press release. “It might be possible to fit the method into a conventional face mask.”
Along those lines, the researchers are also working on a project to create wearable paper sensors for the continuous measurement of biomarkers of diseases from exhaled breath. Although still in the development stages, this lightweight, small, inexpensive paper sensor can fit into conventional respiratory masks, according to a University of Freiburg press release.
Other Breath Analysis Devices Under Development
Devices that sample breath to detect biomarkers are not new. Dark Daily has regularly reported on similar developments worldwide.
Thus, University of Freiburg’s non-invasive lab-on-a-chip biosensor is worth watching. More research is needed to validate the effectiveness of the biosensor before it could be employed in hospital settings, however, monitoring and managing antibiotic levels in the body via breath samples could prove to be an effective, non-invasive method of providing personalized antibiotic therapy to patients.
Clinical trials on human breath samples are being planned by the University of Freiburg team. This type of precision medicine service may give medical professionals the ability to maintain proper medication levels within an optimal therapeutic window.
‘Balwani is no Johnny Depp,’ says an expert on juror behavior, as prosecution and defense rest in fraud trial of the former executive of the now-defunct lab test company
Clinical Laboratory directors and pathologists continue to focus like a laser beam on the trials of former founders and executives of the now-defunct blood test company Theranos. But as the criminal fraud trial of ex-president and COO Ramesh “Sunny” Balwani comes to a close, legal experts maintain the 57-year-old businessman may face an uphill battle to win an acquittal.
Balwani faces 12 counts of wire fraud and conspiracy to commit wire fraud while serving as second in command at Theranos, the former Silicon Valley medical laboratory test startup. The fraud trials of Balwani and Theranos founder Elizabeth Holmes have made headlines for more than a year as the two once-high-flying executives face a reckoning for allegedly defrauding patients, investors, and physicians about their proprietary Edison blood-testing device, which they claimed could conduct hundreds of blood tests using a finger-prick of blood.
Before resting their case, Balwani’s defense team called only two witnesses: information-technology consultant Richard Sonnier III, and naturopathic physician Tracy Wooten, NMD, of Arizona, who sent more than 100 patients to Theranos.
According to The Wall Street Journal(WSJ), Wooten “backtracked some of her support for Theranos on the stand.”
The WSJ reported that Sonnier’s testimony “had been hotly litigated by attorneys,” and that US District Judge Edward Davila ruled in May that Sonnier would be permitted to testify—with limitations—about the Theranos Laboratory Information System (LIS), which contained patient test results.
Theranos LIS Not Accessible to Government Prosecutors
Sonnier was hired by Balwani’s legal team to assess the accessibility of data held in the LIS, which the defense believed would have provided evidence of Theranos test accuracy.
The WSJ noted that in 2018, the year Balwani and Holmes were indicted, the government subpoenaed a copy of the LIS, which Theranos provided. However, the LIS data was delivered on an encrypted hard drive.
“Not only was the hard drive itself encrypted, but the data it contained was also encrypted with a separate passcode required,” the WSJ wrote. “The government didn’t have the passcode to access the data, and a day or two after sending the hard drive to US attorneys, Theranos officials ordered the entire original database dismantled, according to court testimony.”
The WSJ reported that Sonnier testified he was unable to access the encrypted data on a backup hard drive despite having a list of possible passcodes found in Theranos documents. Sonnier also testified that it would have been “very straightforward” to reassemble the original LIS and “recover that data.” The missing password wouldn’t be an issue, Sonnier testified.
Ramesh “Sunny” Balwani (above) ex-president and COO of now defunct blood test startup Theranos, faces 12 counts of wire fraud and conspiracy to commit wire fraud. In an interview with Insider, an expert in conducting jury research, focus groups, witness preparation, and jury selections said that “both the evidence and the way Balwani is perceived would affect his chances of being acquitted.” And that, “He has a lot of problems that [Elizabeth Holmes] didn’t have. He kind of fits the part from a juror’s standpoint.” Clinical laboratory directors will learn much from how Balwani’s role as the primary decision-maker in the Theranos lab is perceived by the jury. (Photo copyright: Justin Sullivan/Getty Images/Newsweek.)
The Prosecution Rests
Federal prosecutors rested their case last month after calling more than 24 witnesses. The government alleges Balwani worked closely with Holmes and conspired with her to defraud investors and patients about the startup’s blood testing technology. They allege he knew about the accuracy and reliability problems that plagued Theranos’ Edison blood-testing device.
Holmes was convicted in January on three of the nine fraud counts and one of two conspiracy counts. She was acquitted on four counts related to defrauding patients, one charge of conspiracy to commit wire fraud and three charges of wire fraud.
While prosecutors failed to persuade jurors that Holmes intentionally sought to defraud patients, Bloomberg legal reporter Joel Rosenblatt told the Bloomberg Law Podcast he believes Balwani is “inherently more vulnerable” on the patient-related fraud counts because he “oversaw” the operation of Theranos’ clinical laboratories.
“As a result of that role, [Balwani] was more aware of not only the faulty Theranos blood test results, but all the problems that employees were pointing out about those results,” Rosenblatt added. “So, he was the first high-level executive to be dealing with those complaints.”
Rosenblatt noted that Balwani’s defense centers not only on trying to show that Theranos’ proprietary blood-testing machine worked, but that it “works maybe well enough or worked as well as other [medical] laboratories.” He said Balwani also maintains that Holmes, as CEO and founder, was in charge long before he joined Theranos as president.
“It’s a difficult argument to make because all the emails show how cooperative they were, how closely they worked together. They were intimately involved but they were working side by side for years and really during the years where all the money started coming in,” Rosenblatt said in the podcast.
“He has a lot of problems that [Elizabeth Holmes] didn’t have,” Taylor said. “He kind of fits the part from a juror’s standpoint. He’s got the power, the authority, he’s got the personal traits that make the allegations more credible from a perceptual standpoint for the jury.”
In contrast, Taylor says, “People don’t love Elizabeth Holmes, but I think what she had going for her was that she pitched herself as a true believer in the company. She was the voice and the face of Theranos.”
‘Balwani is not Johnny Depp’
While a jury recently awarded actor Johnny Depp significantly more damages than actress Amber Heard in their well-publicized defamation trial, Taylor maintains jurors are unlikely to view Balwani as a sympathetic figure.
“Sunny Balwani is not Johnny Depp. He doesn’t have the halo that Johnny Depp has, or the fan base,” Taylor said. “He does not present as that type of person, so I don’t know that the jurors will have any sympathy towards him. And I think they would actually be more inclined to believe Holmes’ allegations.”
The Theranos fraud trials of Holmes and Balwani continue to capture the attention of clinical laboratory directors and pathologists who are now witnessing the final chapters in the downfall of the one-time Silicon Valley power couple.
