The Investors

Last week, on the dropout, we got a peek into how things at Theranos could be at times a full-on family affair when Elizabeth recruited her brother Christian and five of his fraternity buddies to join her at the company. They came to be known as the Therobroes and there was more drama from the jury pool when a third juror was dismissed. This time for repeatedly playing the puzzle game Sudoku during witness testimony. At this point, we have three jurors dismissed. It's extremely troubling. It brings us one step closer to a potential mistrial in this case, which would be devastating for the government. This week, we are from high-profile companies and individuals who invested millions of dollars into Theranos. The prosecution reiterating that these investments were made on the basis of what they say was a pattern of misinformation, exaggeration and outright lies, coming from Elizabeth Holmes herself. I think it's a huge deal to transition from rosy forecasts to lies about what you can do. And we hear from a Pfizer scientist who speaks to the supposedly doctor document that Theranos showed these investors and others to lure them in. When you see an actual doctored document with your own two eyes, I mean, that's almost impossible to rebut, and so this was a huge moment for the government. From ABC Audio, this is the dropout, Elizabeth Holmes on trial. Rebecca Jarvis is out again, but we'll be back for the next episode. Until then, I'm Elizabeth Scholze, filling in to tell you the latest on what the dropout teams uncovered. Here's episode 11, The Investors. It's wonderful to be in a place in which we can begin to talk about this. On December 20, 2013, Brian Tolbert, the vice president of Finance for an Investment Firm called the Hall Group, was sitting in his Frisco Texas office, listening to Elizabeth Holmes host an investor conference call. "As you all know, we have been working very hard for a long time to build out this infrastructure that could, in fact, make it possible to get rid of the big tubes of blood that are drawn from the arm. It's entirety." Tolbert had recorded the call, saying he typed slowly and wanted an accurate record. And when prosecutors played it out loud in court during Tolbert's testimony, it caused quite the stir. It was the very first time anyone in the courtroom had actually heard Elizabeth's voice during the course of this trial. Tolbert's company had invested $2 million in the blood testing startup back in 2006, just three years after its launch, on a tip from Chris Lucas, nephew of then-Theronos Bourd Chair Don Lucas. The Hall Group mainly invested in real estate, but thought this was an exciting opportunity. Theronos touted attractive contracts and fancy financial projections, and the Hall Group thought they'd be lucky to get in early. In the seven years between the initial investment in this call, communication would be sporadic. But Tolbert said he and the Hall Group chalked that up to Theronos working hard on its technology and making good on its lofty promises. After their highly publicized partnership with Walgreens, Tolbert said Elizabeth and Theronos were finally becoming more communicative with shareholders. Now Tolbert and the Hall Group were debating whether to invest more. They had 11 days until December 31, 2013, to make the decision. Elizabeth and her signature baritone was making bold claims on this investor call, and Tolbert liked what he was hearing. When I started the company, we knew that it would take us a long time to be able to establish an infrastructure that could do any lab test that is run in a traditional lab from a micro example or these tiny droplets that we take now from the finger. Prosecutor Jeffrey Shank asked, based on the recording just played, did you draw any conclusions about the current capabilities of the Theronos technology? Yes, Tolbert testified. Based on Elizabeth's statements, he said he understood that Theronos had perfected its technology over the past seven years, and it made lots of advances from being able to do some tests, as he'd originally seen, to now being able to do lots and lots of tests on the same drop of blood. Was that representation important to you in your decision to reinvest in 2013? Shank asked, it was, replied Tolbert, because if they had spent seven years working on building a device and they couldn't do any more tests than they did seven years prior, then it would have been concerning. Tolbert said he took Elizabeth's statements at face value, believing her when she said Theronos machines could now run any lab test from a micro sample. As we now know, it could never run any more than 12 tests on its proprietary technology, and often several of those tests would produce inaccurate results. But Tolbert said he didn't know that. Remember, this was December of 2013, after Theronos was already live inside of some Walgreens. Tolbert believed Holmes had already made good on the promise as she was making on the call. But in reality, instead of using that famous finger stick of blood, Theronos was running the majority of their Walgreens tests via Venus draw. And instead of processing the tests on site as she'd also promised on the call, Theronos was shipping all tests to a central laboratory miles away. Again, Tolbert said he didn't know this. And when Elizabeth talked about scaling to thousands of other stores under these premises, it was intriguing. "The retail is exactly where we're focusing our investment, the fact that we will scale is a given, the goal is to be able to be national very, very quickly." Certainly, if we had thought that those locations would not become operational, it would have been a big negative for the investment, Tolbert testified. On the call, Elizabeth moved on to her usual bold claims about her supposed contracts with the military. "Military is a big deal for us, and I can tell you, confidentially, a couple of areas in which we've been focused there, one is the context of work in the Middle East, specifically in Afghanistan, the ability to take a technology like this and put it in light, specifically on a meta-back as the potential to change survival rates. We've also been doing a lot of work for special operations command in the context of missions and remote areas." Elizabeth's military claims have perhaps never been heard so boldly stated in her own voice until this call was played in court. Tolbert testified that based on Elizabeth's statements, he believed the technology was operational at that point, and that Theranos' devices had already been used in Afghanistan. These were not just projections about what they hoped would happen in the future, as we've often heard argued by the defense. And these claims resonated personally with Tolbert. He told the court, "I have a brother who is in the Marines, and he did a tour in Afghanistan, so that thought that there was an ability to do everything that we could to help our servicemen and women if they got hurt was huge." And it played a central role in his decision to further invest. Just as the 11-day investment window was closing on New Year's Eve 2013, Tolbert sealed the deal. The hall group would wire $5 million to Theranos that day. Overall, White Collar defense attorney Caroline Polisey thought the call with Elizabeth and Tolbert's testimony about it played well for the prosecution. This is a huge deal for the government, and frankly, I think it's a break in the case. You can hear evidence days and Mondays of evidence, a juror can take in facts, but there's just no substitute for actually hearing Elizabeth Holmes' voice on that tape recording. It's incredibly powerful, and to hear her make the statements herself is just going to be that much more persuasive in terms of getting this over the goal line for the government. Drincross examination Kevin Downey immediately tried to discredit Tolbert, saying he'd done little actual due diligence on Theranos before investing millions, and largely relied on the opinions of others when making determinations. Tony pointed out that Tolbert had few communications directly with Elizabeth herself between the initial investment in 2006 and the second one in 2013. Did you at any time try to contact Miss Holmes during that period? Not directly to my recollection, Tolbert replied. When it came to communicating about Theranos in that period, it was as he'd previously stated with his liaison, Chris Lucas, the nephew of Thernos Ford. chair and legendary investor, Don Lucas. "I would probably talk to him three or four times a year," Tolbert said. When asked of the connection to Don Lucas, who had once backed legendary oracle founder Larry Ellison, swayed his decision, Tolbert replied, "It had." Downey pointed out that in addition to weighing in Don Lucas' endorsement of Theronos, Tolbert had been swayed by the fact that other powerful Theronos' board members had believed in Elizabeth. Is it safe to say that recognizing that they had a board with people who were well-regarded influenced you in connection with making your 2013 investment, Towney asked, "That certainly would have been a positive, not a negative," Tolbert replied. People use the transitive property of quality or something. If X likes it and Y likes it and Z says it's good, then it must be okay. "I don't know, it's not totally like a lemming effect, but it's way easier to feel like you are consensus in something than being non-consensus." That's veteran venture capital investor Brian Roberts. He says investors like Tolbert relied too heavily on the endorsements of others, something he says traditional venture capital firms are less likely to do. He thinks Theronos would have been on to this. I think that certainly the Theronos team were deliberate in their choices about who they solicited capital from, and they went to nontraditional sources of capital who very arguably have less context and spend less time deeply in mesh and industry. Roberts is a partner in Ben Rock, one of the top healthcare and tech venture capital firms in the country, and has spent 25 years investing in healthcare companies. He says it's unfathomable that an investor wouldn't back up endorsements like this with actual due diligence. "It feels like nobody who invested did the really hard work, digging, probing, going against the grain, to try and figure out what was the actual truth and probability and status of stuff." Roberts said he had heard about Theronos when the company was fundraising. His firm was never pitched, he says, because of its background as a traditional technology in healthcare investment firm. "I do remember the first time I heard about a company called Theronos. It was after they raised their first big round and made some noise about it. The company felt like a very hard business to make work. It was trying to innovate in commodity diagnostic testing, which was very concentrated in a couple of different vendors lab corp quest, and really required a lot of bricks-and-mortar blood draw, etc. It felt like a hard business to me, but it certainly was one where many times over a three or four year period somebody would come up to me and say, "Oh, Brian, you're a good healthcare investor. Are you invested in Theronos?" And I go, "No," and they'd say, "Oh, well, I thought you were a good healthcare investor, maybe not so much." Roberts stuck to his guns, but others like Tolbert were not so skeptical. And in the cross-examination, defense attorney Downey continually pointed out Tolbert's lack of due diligence after he'd been on that investor call with Elizabeth. Did you follow up after the call to ask to see any contracts or other agreements between Theronos and the military? He asked? "I did not," Tolbert replied. Did you follow up afterwards to see any contracts or other arrangements that were in place with pharmaceutical companies, or ask about any of the contracts that Theronos had in place with retailers? Downey asked? "I did not," Tolbert replied again. Overall, attorney Caroline Polisey feels a lack of due diligence won't get Elizabeth Holmes off the hook if it's proven she intentionally defrauded investors. She says relying too much on this point could actually hurt the defense down the line. Even though that may be sort of a compelling argument logically, it's not, in any way, shape or form, a compelling legal argument, the crime of fraud has nothing to do with whether or not investors ultimately invest or not or how much diligence they did. It simply is irrelevant. It's a little bit of a shame on you, defense, which isn't going to cut it when it comes time to actually making closing arguments because it's not actually a viable legal argument and the judge is not going to let it in. Legal defense or not, venture capitalist Brian Roberts thinks in the end both the hallgroup and Elizabeth came out badly. "I, in my opinion, all of those investors should have done a lot more work to uncover the fact that they were being lied to. But I don't think it's okay to take sort of buyer-beware thesis to the extreme of "I'm going to lie to you and if you don't catch me in the lie, then it's okay." I think both sides of this story get F's, right? "You shouldn't lie and you shouldn't invest without doing some work." This is Brad Milky, host of ABC's Daily News podcast Start Here. More drop out in a minute, but first, a quick reminder, if you're looking for a daily recap at the day's news, including updates on the Elizabeth Holmes trial, join me over on Start Here, the Daily Podcast from ABC News. While Brian Tolbert and the hallgroup may not be familiar to you, the name Betsy DeVos probably is. She was President Trump's Secretary of Education from 2017 to 2021, and the richest member of his cabinet. Forbes estimated her immediate family's net worth to be roughly $2 billion. "Please join me in welcoming Madam Secretary Betsy DeVos to the podium." "It's really a pleasure to be here with you this afternoon." The government introduced as its next witness, Lisa Peterson, a private equity manager for the DeVos family office. With her help, the family would come to make a whopping $100 million investment in Theronos, based on what the government stated were many of the same highly misleading claims about the technology that were given to Brian Tolbert. Peterson first learned about Theronos from her boss Jerry Toburgan, the CEO of the DeVos family office. He met Elizabeth at a conference in September of 2014, as Elizabeth recalled in her 2017 SEC deposition. "There's a boss family. How did you know them? I met them at a conference for family-controlled companies and talked to them about our vision." "Who is your main contact there?" "Initially, it was Jerry Toburgan, now it's Lisa Peterson." "He was Lisa Peterson?" "My understanding is one of their fund managers." "And Jerry Toburgan is her boss." Under the conference, Toburgan emailed Peterson and a number of the family members from the investment committee, saying, "This morning, I had one of the most interesting meetings I can recall, with the woman profiled in the attached Fortune magazine article. This was, of course, the article by Roger Parloff that included false and misleading information about Theronos, which he'd come to redact later in a follow-up piece. Parloff spoke to the dropout team for season one. "The PR person I spoke to at that time said, 'You don't have to change a thing. Everything's just exactly right the way it is.' And then the SEC is alleged that they also included it in these bundles that they gave to investors. But since then, I've gone back and I've looked at some other stuff, and I think I asked the right questions. I just got the wrong answer." Peter Lee tread a portion of the article for the court. Up at the top, it says Theronos tests can be performed on just a few drops of blood. He asked Peterson, "Was that of interest to you?" "Very," Peterson replied. "Why?" "Because no one had been able to do that before," she said. Attorney Caroline Polisi says the inclusion of articles like this one hurts the defense's case. "The argument that the government is making is that, look, she was essentially passing off these very flattering media articles as affirmative statements about what the company could do. At this point, the government is saying we understand that a lot of what was contained in those articles was in fact not true. And so the fact that she was sending them to investors, the government is arguing, goes to just the level of deception that she was engaging in." Upon hearing promises like the ones in the article, Peter's and testified she felt an immediate personal connection to Theronos' work because her husband is a type I diabetic who had his blood drawn frequently. Technology like this would be revolutionary. She became the main contact with Theronos and says she began doing due diligence, communicating with Elizabeth herself. There are no centers of material. to review. Peterson was excited about what she saw and set up a phone call with Elizabeth on October 3rd, 2014. Peterson testified that Elizabeth positioned this call not just as an opportunity for her to sell them on her technology, but for Elizabeth to determine whether they would be the right fit for Theronos, almost like an audition. The situation was characterized that she was kind of handpicking five or six private families to invest in her company, Peterson testified. So it was very much characterized that she was inviting us to participate in this opportunity. Elizabeth testified about the types of investors she was looking for in her 2017 SEC deposition. The DeVos family fit the bill. We were looking for family-owned businesses or family-controlled companies and leadership who wanted to invest in something for the really long term and we identified a group of people to try to bring in for that. Lucy says this was a deliberate tactic. She sort of portrayed it to these investors as you know you should be so lucky. We have so many people that want to invest in our lining up that you know we're giving you the sort of inside track here and you should take it and run with it. It did create this level of phomo amongst investors. After the phone call Peterson put together a thorough memo of things that had been presented to her in the call and in the binders that Theronos had sent to them. At this point did you have any other source of information from Theronos besides Miss Holmes? Leach asked. The phone call from Miss Holmes and the binders were the two things she was making her determinations on as well as what I could find on the internet. She said. Leach began to read some of the claims that were given to the divorce family and the binders. Instead of vials of blood Theronos requires only a pinprick and a drop of blood to perform hundreds of tests from standard cholesterol checks to sophisticated genetic analyses. One of the documents read. It then says the results are faster, more accurate and far cheaper than conventional methods. Recall this was after the wall green's launch and after Theronos lawyers had flagged this type of language as problematic. Peterson testified that these points were relevant because it showed that this was going to be a game changer for health care. And like Tolbert there were claims about Theronos being comprehensively validated by 10 of the top 15 pharmaceutical companies. Included in the binder was a report supposedly from Pfizer with what the prosecution alleged was a doctored Pfizer logo. Did you believe that this report was prepared by Pfizer? Leach asked. Yes, Peterson replied. Why did you believe that? Because the logo was on it. Peterson testified that the alleged Pfizer document was very relevant to their decision to invest in Theronos because it validated everything that she was telling us about being vetted by a large external independent third party. Additionally, the binder included those claims we've heard about the military. Peterson testified that they were shown documents saying that Theronos technology was being used in a military evacuation helicopter on ships and in refugee camps. It was something Peterson testified was critical to their understanding of the investment. The fact that it could do this and that it was portable was very game-changing for the industry she testified. Of course, Elizabeth herself admitted it wasn't being used in those capacities in her 2017 SEC deposition. Was a Theronos manufacturer device ever deployed in the battlefield? No. Was it ever deployed in a meta-backed helicopter? No. After the family received the materials, Peterson, her boss and three members of the divorce family flew out to California to Theronos headquarters to meet with Elizabeth and former COO Sonny Balwani in person. Peterson testified that they saw the Theronos analyzer and one of the divorces had her blood drawn. She also testified they didn't see any third party devices production facilities or the clinical lab, but Peterson says they talked at length with Elizabeth and Sonny and everything looked very favorable. The divorce group convened after the four or five hour meeting and made a big decision according to Peterson. When we went to that meeting, the thought was to do $50 million potentially. That's what we were looking at. Peterson testified, but in the meeting, Elizabeth and Sonny said other investors were coming in for 100 million. Peterson said the family determined 100 might be a better number for us to do. And V.C. Brian Roberts says this thinking is not at all unusual with big time investors. I think that the fear of missing out is endemic in our species to some degree or another, especially in uncertain likelihood high return possibilities. I have seen CEO's teams trying to and often successfully creating the impression of time pressure and scarcity around a financing, which that's part of their job. Just like part of the investor's job is to do their work and their diligence on whether they want to invest. A year after this mammoth, $100 million investment in 2014, negative press about Theranos started barreling it. Elizabeth went on the offensive. Prosecution played a clip of her appearing on mad money with Jim Kramer, doubling down on her claims about the company's technology. How many tests can your device Edison do? Every test that we offer in our laboratory can run on our proprietary devices. Later on the today show, reporter Maria Shriver asked about accusations that Theranos had violated lab regulations. Elizabeth, in contrast to water defense team, has appeared to have been arguing throughout the trial, took full responsibility. The prosecution played this clip as well. I feel devastated that we did not catch and fix these issues faster. You hold yourself responsible for hiring the wrong people, not doing the proper oversight, not giving the proper controls. What do you hold yourself responsible for? I'm the founder and CEO of this company. Anything that happens in this company is my responsibility at the end of the day. Only 11 days after this segment aired, Peterson and her boss, Jerry DeBurgen, took a trip to Palo Alto to meet Elizabeth again. It was the first time Peterson says they were able to talk to Elizabeth in person since making their investment in 2014. And in contrast to taking responsibility for the severity of the violations on television, Peterson says that Elizabeth trivialized the incident. Did she say that in substance that in reality Theranos didn't feel the issues are major? Prosecutor Leach asked? "Correct," said Peterson. Elizabeth very much downplayed what had been happening in the press. Leach concluded his direct examination there. During the cross-examination, defense attorney Lance Wade came out strong, continuously trying to discredit Peterson's testimony by saying she had repeatedly failed to do due diligence on Theranos prior to recommending the divorce family office's investment. Wade addressed the Dr. Pfizer report. He asked if Peterson knew the contents of it. "What was this kind of study that was done by Pfizer?" he asked. "I don't recall," she said. "You don't recall the actual work that was done with Pfizer by the company?" "No, not the specific tests that were run. No. Do you recall anything about that study?" "Not today, no." He then asked about her due diligence on Walgreens. Has she ever visited a Walgreens Wellness Center? "No," she admitted. Had she ever looked on Walgreens' website during her internet research, she couldn't recall. Had she ever seen the disclaimer on Theranos' website about occasionally using Venus draws? "I don't recall ever seeing that." "No," she said. "The idea is just to completely eviscerate her credibility, to get her to really look silly in the eyes of the jury. Any points you can get in terms of the defense, in terms of showing that the witness wasn't doing her job properly or anything that sort of makes her diminished in the eyes of the jury can be seen as sort of a win for the defense." As Wade continued to press, Peterson shared that her boss advised her not to reach out to her contact from Walgreens. "This was largely an invitation only situation," she told the court. "And she said that they felt that they circumvented the process, they would be uninvited to participate in the opportunity. We were very careful not to circumvent things and upset Elizabeth," she said. Venture Capitalist Brian Roberts said this should have been a red flag. "Any CEO who doesn't want you checking, being engaged in the business, like I don't know why you want to be in business with them. If someone wants you to invest money before you can do your work, or someone says, 'Oh no, no, you can't do work, you just have to give me the money. If you don't walk away, that's on you." Wade then asked if they had required tested test data, or brought in outside scientific and regulatory experts or an attorney. Peterson testified no to all. She said she flipped through everything but that she wasn't a scientist. We were relying on what we were told by them on the accuracy of the analyzer, she said. Wade confirmed with Peterson that she didn't ask for any follow-up material after reviewing the binders, and asked if she knew of anyone else who had looked at them. "I'm not aware." "No," she said. She didn't ask for contracts or confirmed Theranos' patents with public records. All things Wade pointed out were common in due diligence. Robert says it's highly unusual for an investor not to perform this type of work before making an investment. "I would argue diligence is tens bordering on hundreds of hours, and most of it is not spent with the team. Most of it is spent trying to prove yourself incorrect on how wonderful you think the product and need are, right? And if you can't prove yourself incorrect, then make an investment." Throughout the three-and-a-half-hour cross-examination that would continue into the next day of court, Wade made it clear that Peterson did not possess a strong knowledge of what the investment entailed or what Theranos as a company was doing. He also challenged the testimony that Peterson had made regarding the decision to up their investment to $100 million following the Theranos visit. Are you aware that there was actually a discussion and a belief going into the trip to California that they probably would make a $100 million investment? He asked? Peterson said she wasn't aware of the conversation. But then Wade showed an email between her boss and the COO of the DeVos family office a few days prior to their Palo Alto trip, stating that the investment would probably be a $100 million investment. Following Peterson's testimony, prosecutor Robert Leach brought up an issue with a judge regarding Wade's cross-examination, specifically with what he called "fictim blaming." Prior to the start of the trial, Judge Davila ruled that someone's lack of knowledge or due diligence of Theranos could not be argued as a defense, and Leach felt that Wade's cross-examination, which seemingly centered almost entirely on this, violated this ruling. Judge Davila pointed out that there was no objection during testimony, but also that Peterson's due diligence can't be brought up when the defense ultimately makes their closing argument at the end of the trial. What they do at the end of trial is put all of the pieces of the puzzle together, and the point that was raised this week is that the judge is not going to allow the defense lawyers at the end of the trial to try to put the pieces of the puzzle together in a way that is blaming the victim. And so the answer to these questions may be admissible evidence, and they may be relevant for some other issue, but they can't then be put together in a legal argument to say that they should have known better or somehow that this absolves Elizabeth Holmes of any guilt in this case. In the testimony of both these multi-million dollar investors, one striking detail pops up that we've heard in testimony many times before. They say they invested partially on the basis that Theranos' technology had been vetted by 10 of the 15 largest pharmaceutical companies. Many investors like Lisa Peterson of the DeVos family office were most impressed with one particular endorsement, Pfizer's. In her investor binder, Theranos included a report from the pharmaceutical giant endorsing Theranos' technology, a Pfizer logo emblazoned on the front page. But the prosecution told us in their opening statement of this trial that the logo was doctored, and now, with the next witness, we appear to have the testimony to back this up. In 2008, Shane Weber was Pfizer's then director of diagnostics. He was tasked with reviewing Theranos' technology and set up a call with Elizabeth Holmes. She was trying to sell him on a Theranos-prepared study that touted its superior performance, excellent accuracy, and performance ability against commercially available gold standards. Elizabeth commanded the call. It was almost entirely vocalized by Miss Holmes, as I remember it. None of the other people spoke, but were testified. Following the call, Weber sent a series of follow-up due diligence questions, and after receiving responses, he prepared a report with his recommendations for the Pfizer team. They weren't good. You wrote, "Theranos does not at this time have any diagnostic or clinical interest Pfizer, prosecutor-leach red? Was that your recommendation? It was." And why was that your recommendation? Weber told Leach that the Theranos' technology wasn't able to run the type of tests that Pfizer needed, wasn't FDA approved, and wasn't ready for use. Weber went on to testify that in the hour-long call with Elizabeth, Theranos verbally provided oblique, deflective, or evasive, non-informative answers to technical due diligence questions. And then, of that study Elizabeth shared, Weber wrote, "Theranos has provided a poorly prepared summary document of their platform for home patient use. And then, the nine conclusions in their summary document are not believable based on the information provided." Weber's supervisor has agreed with his recommendation, and although they agreed to check in with Theranos every six months, a partnership would never happen, "Did you ever change your recommendation at any point?" Leach asked, "No, I did not." Weber replied, "But that didn't seem to matter to Theranos." Prosecutor Leach turned the court's attention to a now familiar document. It was the same document Elizabeth had originally sent to Pfizer, the one we've just heard Weber vociferously discredit. But this time, the document contained that Pfizer logo on the left-hand corner. This was the copy of one sent to Walgreens, the same one that would be sent to investors like the DeVos family, Rupert Murdoch, and others. Leach set up the two documents side-by-side for the court to see. "Did you approve of the use of the Pfizer logo on the document provided to Walgreens? I'm not aware of any Pfizer approval for the use of the Pfizer trademarked logo on this document," Weber answered. Here's Caroline Polisi. "That's a huge moment because you can make the argument, well, people misunderstood what she was trying to say, or maybe there's some wiggle room. Here she really didn't have any intention of misleading anybody. When you see an actual doctored document with your own two eyes, I mean, that's almost impossible to rebut. And so this was a huge moment, a huge moment for the government." In fact, Weber went on. He said he would never be allowed to approve the Pfizer logo on an external document for another company, as that is the purview of Pfizer legal and trademark. Leach went on, would it be fair to say in 2010 or after that Pfizer endorsed Theranos' technology? No, Weber answered. Do you agree with the statement that Pfizer validated Theranos' technology? No, I do not. And is it right to say that you came to the opposite conclusion? I did. The cross-examination was brief. Defense Attorney John Klein pointed out that Theranos had dealings with Pfizer for a few years before Weber joined. Weber agreed with this, but said he had received all of the documentation and the studies, and so had the body of knowledge necessary to assess their interactions. Klein went on to emphasize that Weber only spent three months working with Theranos, and that he never visited Theranos headquarters or examine the machine in person. One thing conspicuously left out of their cross-examination, any talk of that allegedly doctored report. They didn't cross on this issue because there's nothing to cross. They can't deny that these were doctored documents, and that is going to be a very compelling argument. Certainly something that the prosecution, closing arguments, is going to point out to the jury. As the trial enters its ninth week, those closing arguments and a verdict are looming closer. Everyone wants to know, how will this trial's outcome affect future investments in biotech and healthcare companies? Enter capitalist Brian Roberts thinks it won't move the needle as much as you might think. I do not believe that the Theranos story has any effect on how people will fund healthcare companies. I think that it is such an outlier. I hope it makes people do their work and do their diligence on investments, but I don't think it's going to alter the amount of capital or where the capital goes because it's such an outlier. I feel like a not guilty verdict is at least implicitly, perhaps explicitly, telling the world that it's okay to lie. So that would be disappointing. But I don't think a guilty versus not guilty verdict will have any effect on investment dollars. With these witnesses wrapped, we expected to hear from others, but in the link The latest disruption of USV homes, a water main break shut down the entire city block. No running water in the courthouse meant no court. Proceedings were shut down. Rebecca will be back next Tuesday to report how things unfold from here. Tune in for that! Elizabeth Holmes and Sonny Balwani did not respond or decline to comment for this podcast. Some material, including court depositions, were edited for clarity and time. The dropout Elizabeth Holmes on trial is written and reported by Victoria Thompson, Taylor Dunn, and Rebecca Jarvis. Victoria is the executive producer and Taylor and Rebecca are the producers. For ABC audio, Susie Lu is producer and Madeline Wood and Marwa Milwaukee are associate producers. Dia Athen and Miles Cohen are court producers. For ABC's business unit, our associate producer is Victor Adonius and our production assistant is Lane Wynn. Mixing and scoring is by Susie Lu and Evan Viola. Evan also composed the music for the dropout. Our artwork is by Teddy Blanks at Chips and Y and Cedric Constat. For ABC audio, Liz Alessie is executive producer, special thanks to Josh Cohan, Elizabeth Rousseau, Ian Rosenberg, Eric Abram, and Stasia D'Sheeshko. Be sure to subscribe to the dropout podcast and if you like what you heard, leave us a review. Listen to new episodes every Tuesday.