Theranos trial: Former Safeway CEO testifies to partnership failure

Texas News Today

SAN JOSE, CA — The former CEO of Safeway Inc. said Wednesday that when a grocery chain decided to invest more than $350 million in a partnership with a blood-testing company. testified that he relied on the promise of its founder, Elizabeth Holmes.

The relationship between Holmes and Safeway’s then-CEO Steven Bird began with a common vision of making healthcare more accessible, but Bird shows nothing more than the establishment’s costly pursuit. It was disastrous as he faced the end of his career without Theranos Clinic in hundreds of stores.

In his testimony, Bird spoke of his enthusiasm for the possibility of bringing more customers and revenue to low-margin supermarket companies. But it was more than a number transaction. Bird talked about how impressed he was with Holmes, the first young entrepreneur with a good vision.

“She was clearly charismatic,” Bird said. “She had room when she was speaking in front of our board,” he compared to meeting the US president.

The praise faded. Bird’s patience began to run out as the Theranos partnership’s scheduled launch date approached several years after the 2010 meeting, according to an email in court records.

“I feel like a jogger running around waiting for a traffic light to turn green,” Bird wrote to Holmes in November 2012.

Mr Bird’s testimony could help prosecutors claim that Mr Holmes lied to investors about what Theranos was able to achieve. Safeway has invested $30 million in convertible bonds that convert into Theranos equity. The grocery chain’s retail deals dampened Theranos’ solid earnings forecast for investors, but never materialized.

For 20 years, Mr. Bird, who leads the California-based grocery chain, has promoted initiatives to improve the health of employees and customers. He founded a healthcare company within Safeway and began offering vaccinations in store pharmacies.

Theranos’ promise to test for various health conditions with a few drops of blood from a puncture wound fit his vision, and Bird signed with the company in September 2010 after six months of discussions. Glove.

Bird said in his testimony that the supermarket believes the new Theranos clinic will double pharmacy sales. He envisioned that shoppers would head to the grocery store, perform a finger-prick test, and be able to see results at the pharmacy by the end of the week after the groceries were received.

Bird wanted an exclusive partnership with Theranos, just as it had worked with several product vendors. For a while, Safeway was the only grocery store to offer a specific type of watermelon, he said.

He testified that the brand was associated with Theranos because the Safeway name was on the outside of the building, and he wanted to be cautious.

Holmes told Safeway officials and board members in 2010 that Theranos blood tests were done with the fingers, results were ready in 20 minutes, the tests were cheaper than competing labs and saliva. We have created a presentation that includes a claim that can be tested. Urine and blood — and the company was cash flow neutral.

“They were ready to go,” Bird said.

As the trial of Theranos founder and former CEO Elizabeth Holmes is underway, the WSJ looks at the biggest milestones in the scandal and talks to statutory reporter Sarah Randazzo about what to expect in a fraud trial. Photo Illustration: Adele Morgan / WSJ

None of this was true, according to witness testimony at last month’s hearing. Many Theranos blood tests are performed with traditional needle-based blood draws, which often took days to produce test results due to persistent errors, and caused significant losses to the company.

The relationship between Safeway and Theranos was severed in 2015 after the Wall Street Journal reported that Theranos’ proprietary blood testing technology was unreliable and the company often used an off-the-shelf blood analyzer.

A Safeway spokesperson said Theranos’ partnership with grocery chain Albertsons Cos dates back to 2015. Even before the merger, the company said that it is now under new leadership.

In the early stages of the Safeway partnership, Theranos was testing the blood of Safeway employees from its headquarters clinic. The magazine reported in 2015. Blood was collected primarily by venous suction rather than by fingertip, and results took up to 5 days. Back, court records show.

“I am really concerned that the reputation of Safeway’s laboratory will continue to deteriorate day by day,” Bird wrote to Holmes via email in a court filing in September 2012. “The sooner we can get to the ‘fingers stick,’ the better.”

Holmes replied that it didn’t help Safeway employees to say that patient results could be returned within 24 hours without consulting Theranos.

By the next month, Bird said in an email that it had hired dozens of phlebotomists and screened an additional 181 for wider launch. However, as of November 2012, the release date was not visible.

“As you know, I don’t get discouraged easily,” he wrote to Holmes on November 12, 2012. He said, I am getting closer to the second incident. ”

He wrote that there were 29 tasks that needed to be completed, but added that the hurdle was not clear to him.

In 2013, Bird told Holmes that Safeway had invested $376 million to build 963 features in its store at a cost of 50,000 man-hours. “I don’t like to waste time. It doesn’t feel like a partnership,” Bird said in an email in January 2013, which also included a previously unannounced Theranos rebranding.

“I trust you. I believe in your company. And I share your vision. I want to help you change the world,” he wrote. “When we work together, we are together Very nice, but I’ve never been more disappointed.”

In February, Holmes sent an invoice for $25 million to Safeway, saying it would have to pay under the contract.

Until Bird’s retirement in May 2013, Theranos testing service did not begin and take place in Safeway stores.

Theranos and Elizabeth Holmes Trial

write to Heather Somerville at [email protected] and Sarah Randazzo at [email protected]

Copyright © 2021 DowJones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8


Please enter your comment!
Please enter your name here