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Medical Laboratories Respond to Monkeypox Outbreak Using CDC-Developed Diagnostic Test

The federal agency shipped tests to five commercial clinical laboratory companies, augmenting efforts by public health labs

Medical laboratories in the US are ramping up their efforts to respond to an outbreak of monkeypox that has been spreading around the globe. Microbiologists and clinical laboratory scientists will be interested to learn that this infectious agent—which is new to the US—may be establishing itself in the wild rodent population in this country. If proved to be true, it means Americans would be at risk of infection from contact with rodents as well as other people.

The Centers for Disease Control and Prevention (CDC) announced on May 18 that it had identified the infection in a Massachusetts resident who had recently traveled to Canada. As of August 3, the federal agency was reporting 6,617 confirmed cases in the US.

Soon after the CDC’s initial announcement, public health labs belonging to the CDC’s Laboratory Response Network (LRN) were testing for the infection, according to an Association of Public Health Laboratories (APHL) press release. The LRN uses a CDC-developed test designed to detect Orthopoxviruses, the family that includes the monkeypox virus.

“Because there are no other non-variola orthopoxviruses circulating in the US, a positive test result is presumed to be monkeypox,” states the APHL press release.

Chris Mangal
“As we focus on the US response, we keep a close watch on the global outbreak. Infectious diseases don’t respect borders, as we know,” said Chris Mangal (above), director of public health preparedness and response, APHL, in a press release. “I am proud of how LRN member laboratories have rapidly and effectively responded to this emergency. This is precisely what the LRN was intended to do. Should this outbreak continue to grow, preparing for expanded testing and increasing capacity beyond LRN laboratories is important to ensuring we are ready for a surge in testing.” (Photo copyright: Association of Public Health Laboratories.)
 

 

Commercial Labs Get Involved

Seeking to bolster testing capacity, the federal Department of Health and Human Services (HHS) announced on June 22 that the CDC had begun shipping Orthopoxvirus PCR tests to five commercial lab companies. They include:

“By dramatically expanding the number of testing locations throughout the country, we are making it possible for anyone who needs to be tested to do so,” said HHS Secretary Xavier Becerra in an HHS press release.

Labcorp was first out of the gate, announcing on July 6 that it was offering the CDC-developed test for its customers, as well as accepting overflow from public labs. “We will initially perform all monkeypox testing in our main North Carolina lab and have the capacity to expand to other locations nationwide should the need arise,” said Labcorp chief medical officer and president Brian Caveney, MD, in a press release.

Mayo Clinic Laboratories followed suit on July 11, announcing that the clinic’s Department of Laboratory Medicine and Pathology would perform the testing at its main facility in Rochester, Minnesota.

“Patients can access testing through Mayo Clinic healthcare professionals and will soon be able to access testing through healthcare professionals who use Mayo Clinic Laboratories as their reference laboratory,” Mayo stated in a press release.

Then, Quest Diagnostics announced on July 13 that it was testing for the virus with an internally developed PCR test, with plans to offer the CDC test in the first half of August.

The lab-developed test “was validated under CLIA federal regulations and is now performed at the company’s advanced laboratory in San Juan Capistrano, Calif.,” Quest stated in a press release.

Public Health Emergency?

Meanwhile, the CDC announced on June 28 that it had established an Emergency Operations Center to respond to the outbreak. A few weeks later, on July 23, World Health Organization (WHO) Secretary-General Tedros Adhanom Ghebreyesus, PhD, declared that the outbreak represented “a public health emergency of international concern.”

He noted that international health regulations required him to consider five elements to make such a declaration.

“WHO’s assessment is that the risk of monkeypox is moderate globally and in all regions, except in the European region where we assess the risk as high,” he said in a WHO news release. “There is also a clear risk of further international spread, although the risk of interference with international traffic remains low for the moment. So, in short, we have an outbreak that has spread around the world rapidly, through new modes of transmission, about which we understand too little, and which meets the criteria in the International Health Regulations.”

Still, public health authorities have made it clear that this is not a repeat of the COVID-19 outbreak.

“Monkeypox virus is a completely different virus than the viruses that cause COVID-19 or measles,” the CDC stated in a June 9 advisory. “It is not known to linger in the air and is not transmitted during short periods of shared airspace. Monkeypox spreads through direct contact with body fluids or sores on the body of someone who has monkeypox, or with direct contact with materials that have touched body fluids or sores, such as clothing or linens. It may also spread through respiratory secretions when people have close, face-to-face contact.”

The New York Times reported that some experts disagreed with the CDC’s assessment that the virus “is not known to linger in the air.” But Professor of Environmental Health Donald Milton, MD, DrPH, of the University of Maryland, told The Times it is still “not nearly as contagious as the coronavirus.”

The Massachusetts resident who tested positive in May was not the first known case of monkeypox in the US, however, previous cases involved travel from countries where the disease is more common. Two cases in 2021—one in Texas and one in Maryland—involved US residents who had recently returned from Nigeria, the CDC reported. And a 2003 outbreak in the Midwest was linked to rodents and other small mammals imported to Texas from Ghana in West Africa.

Testing Procedures

The CDC has issued information for healthcare professionals, including guidelines for specimen collection, along with information for laboratory personnel who may be testing the specimens.

CNN reported on Aug. 4 that phlebotomists who work for Quest and Labcorp have refused to draw blood from suspected monkeypox patients.

“Labcorp and Quest don’t dispute that in many cases, their phlebotomists are not taking blood from possible monkeypox patients,” according to CNN. “What remains unclear, after company statements and follow-ups from CNN, is whether the phlebotomists are refusing on their own to take blood or if it is the company policy that prevents them. The two testing giants say they’re reviewing their safety policies and procedures for their employees.”

One symptom of monkeypox, the CDC states, is a rash resembling pimples or blisters. Clinicians are advised that two swabs should be collected from each skin lesion, though “procedures and materials used for collecting specimens may vary depending on the phase of the rash.”

“Effective communication and precautionary measures between specimen collection teams and laboratory staff are essential to maximizing safety when manipulating specimens suspected to contain monkeypox virus,” the CDC notes. “This is especially relevant in hospital settings, where laboratories routinely process specimens from patients with a variety of infectious and/or noninfectious conditions.” 

Perhaps the negative reaction to the CDC’s initial response to the COVID-19 outbreak in the US is driving the federal agency’s swift response to this new viral threat. Regardless, clinical laboratories and pathology groups will play a key role in the government’s plan to combat monkeypox in America.

Stephen Beale

Related Information:

CDC: Monkeypox

CDC and Health Partners Responding to Monkeypox Case in the US

CDC Activates Emergency Operations Center for Monkeypox Response

HHS Expanding Monkeypox Testing Capacity to Five Commercial Laboratory Companies

Labcorp to Begin Monkeypox Testing Today, Doubling Nationwide Testing Capacity

Labcorp First National Laboratory to Offer Monkeypox Test

Monkeypox (Orthopoxvirus), DNA, PCR Test

Mayo Clinic Laboratories to Begin Monkeypox Testing Today, Increasing Nationwide Testing Capacity

Mayo Clinic Laboratories Launches Monkeypox Test to Increase Access, Availability

Quest Now Offers a Test to Detect Monkeypox Virus DNA, Delivering Faster Answers for You and Your Patients

Quest Diagnostics to Begin Monkeypox Testing Today, Increasing Nationwide Testing Capacity

Quest Diagnostics Launches Monkeypox Virus Testing

APHL Supports Public Health Response to Monkeypox, Phased Expansion of Testing

World Health Organization: Monkeypox

Second Meeting of the International Health Regulations (2005) (IHR) Emergency Committee regarding the Multi-Country Outbreak of Monkeypox

WHO Director-General’s Statement at the Press Conference Following IHR Emergency Committee Regarding the Multi-Country Outbreak of Monkeypox

CDC Dismisses Airborne Transmission of Monkeypox. Some Experts Disagree.

We Let Monkeypox Spread for Too Long. If It Infects Our Pets, There’s No Getting Rid of It

Supply Chain Shortages Threaten Medical Imaging Testing While Clinical Laboratories Face Scarcity of Blood Collection Specimen Tubes

From infant formula to contrast dye for CT scans, ongoing healthcare product shortages highlight continuing US supply chain and manufacturing issues

Medical laboratory directors and pathologists have firsthand knowledge of COVID-19 pandemic-driven supply chain issues, having faced backlogs for everything from pipettes and transport media to personal protective equipment (PPE). But the latest shortage impacting blood collection tubes is another example of why it is important to manufacture key products—including clinical laboratory tests, analyzers, and consumables—domestically.

On January 19, 2022, the federal Food and Drug Administration (FDA) issued a Letter to Healthcare Providers and Laboratory Personnel recommending “conservation strategies” to minimize blood collection tube use because of  “significant disruptions” in supplies due to COVID-19-increased demand and “recent vendor supply challenges.”

“The FDA updated the device shortage list to include all blood specimen collection tubes (product codes GIM and JKA),” the letter noted.

This announcement followed a similar June 10, 2021, Letter to Healthcare Providers and Laboratory Personnel that stated the FDA was aware “that the US is experiencing significant interruptions in the supply of sodium citrate blood specimen collection (light blue top) tubes because of an increase in demand during the COVID-19 public health emergency and recent vendor supply challenges.”

A spokesperson for Becton-Dickinson (BD), a manufacturer of blood specimen collection products, told Forbes that the COVID-19 pandemic caused “the most unpredictable demand that BD has experienced in our company’s history.” The spokesperson added, “Worldwide, BD produced nearly a half a billion additional blood tubes in 2021 versus 2020 … Like every business across every industry around the world, BD is experiencing limited availability of and access to raw materials, shipping and transportation delays, and labor shortages, which hinders our ability to ramp production.”

Christine Nielsen, CEO of the Canadian Society for Medical Laboratory Science, explained that the supply-chain problem includes many routine items, such as Phosphate-buffered saline, and cannot be solved by stockpiling certain supplies.

“It’s also a challenge because we’ve moved to just-in-time (JIT) inventory across all sectors, including labs … They outdate just like food [and] are no longer fresh. [The product] is no longer reliable and you can’t use it. So, we can’t stockpile either,” Nielsen told Forbes.

Shortages Hit Other Critical Healthcare Sectors

But shortages of supplies and equipment have spread beyond the clinical laboratory. Intravenous contrast—which contains iodine and is used to improve the accuracy of CT scans and exclude life-threatening conditions such as cancer—has been in short supply since GE Healthcare shut down its manufacturing facility in Shanghai, China, during the city’s two-month pandemic lockdown that began in early April.

“I can’t overstate the importance of iodinated contrast for really critical diagnostic tests,” said radiologist Geoffrey Rubin, MD, a specialist in cardiovascular and pulmonary imaging, and professor and Chair of Radiology at University of Arizona, Tucson, in a Radiological Society of North America (RSNA) news release covering the contrast shortage.

“This isn’t an ancillary tool. This is something that’s used many, many times every day for both lifesaving decisions in the setting of trauma and for managing cancer patients and determining the appropriate care for them,” he added.

Rosa DeLauro, US Representative
 US Rep. Rosa DeLauro (above), lamented the fact these vital products are not being made in sufficient quantities in the US. “In the wealthiest nation on Earth, there should be no reason doctors are forced to ration lifesaving medical scans to compensate for a shortage of material,” DeLauro told The New York Times. “We are seeing supply chains break down because of consolidated industries experiencing manufacturing shortages and offshoring American jobs to China.” Clinical laboratory managers have first-hand knowledge of the severity of supply shortages. (Photo copyright: CNN.)

GE Healthcare is one of four companies that supply iodine-containing contrast to the United States, but the other three manufacturers have been unable to scale-up and offset the shortage.

By June 14, 2022, the Shanghai facility had returned to 100% production capacity following the easing of local COVID restrictions, according to a GE Healthcare statement. But shortages remain.

“There is still the challenge of bringing the contrast media across the ocean and distributing it to healthcare facilities across the nation,” Nancy Foster, the American Hospital Association’s (AHA) Vice President of Quality and Patient Safety Policy, told CNN.

“The hospital association estimates that about half of all hospitals in the United States rely on GE for contrast dye to perform about 20 million scans a year, or about 385,000 scans each week,” CNN reported.

Critical Medical Products Must be Manufactured Domestically

Oncologist Shikha Jain, MD, Assistant Professor of Medicine at the University of Illinois Cancer Center in Chicago, told CNN that contrast shortages are “not an isolated incident.”

“We’ve been having shortages throughout the pandemic. At the very beginning of the pandemic, it was PPE shortages,” Jain said. “Now, we have contrast shortages and formula shortages for babies.”

The infant formula crisis is the other headline grabbing news in recent weeks. Three companies—Abbott, Reckitt, and Gerber—manufacture 95% of the baby formula sold in the US, with Abbott controlling roughly 42% of the nation’s supply, CNN reported.

“Initially, this problem affected those who are on more specialized formulas or had nutritional issues,” Stephanie Seger, Director of Government Relations at Children’s Mercy Hospital in Kansas City, Mo., told CNN. ‘Then the gap, or the emptiness on the shelves, increased to the point where it’s now any formula. It’s now any parent of any baby.”

The Biden administration took steps in May to increase the supply of imported formula, but like the Intravenous contrast shortage, the problem has not been solved.

The COVID-19 pandemic has served to underscore the serious issues affecting supply chains for hospital, medical laboratory, and other critical supplies. While no quick fix has appeared on the horizon, the clinical laboratory industry should take steps now to work toward long-term solutions.

—Andrea Downing Peck

Related Information:

GE Healthcare Update on Iodinated Contrast Media

Update: Blood Specimen Collection Tube Conservation Strategies—Letter to Health Care and Laboratory Personnel

Blood Specimen Collection Tube Shortage: Frequently Asked Questions

Patients Face Long Delays for Imaging of Cancers and Other Diseases

Memorandum: Hearing on ‘Formula Safety and Supply: Protecting the Health of America’s Babies’

President Biden Announces Additional Steps to Address Infant Formula Shortage

Despite Moves to Increase Supply, Families Are Still Feeling the Pain of the Baby Formula Shortage

Blood Collection Tube Shortages Continue, ‘Routine’ Labs Should Be Limited

Hospitals Grapple with Shortage of Crucial Component for Medical Imaging Testing

Iodinated Contrast Shortage Challenges Radiologists

Tale of Two Trials: Unlike Ex-Theranos CEO Elizabeth Holmes, COO/President Ramesh ‘Sunny’ Balwani Found Guilty of All Charges

Balwani’s lawyers opted not to have their client testify in his own defense and called only two witnesses, while Holmes’ defense team offered jurors the opportunity to hear her testimony

Elizabeth Holmes and Ramesh “Sunny” Balwani dreamed of revolutionizing the clinical laboratory blood-testing industry with their now defunct Theranos Edison device, which they claimed could perform multiple tests with a single finger prick of blood. Instead, they became the rare Silicon Valley executives to be convicted of fraud.

On July 7, ex-COO/President Balwani was convicted on all 12 counts of wire fraud and conspiracy charges in his federal fraud trial. Holmes, Theranos’ founder/CEO and former romantic partner to Balwani, avoided convictions six months ago in January on seven of the 11 counts she faced for her role in exaggerating the accuracy and reliability of the company’s Edison blood-testing device and providing false financial claims to investors.

“Once again, a jury has determined that the fraud at Theranos reached the level of criminal conspiracy,” said FBI Special Agent in Charge Sean Ragan in a press release posted on Twitter following the verdict. “The FBI has spent years investigating this investment fraud scheme with our partners at USPIS and the FDA Office of Criminal Investigations. Lies, deceit, and criminal actions cannot replace innovation and success.”

How did the trials differ? That’s the question many clinical laboratory directors and pathologists who followed Theranos’ legal saga may be asking, as well as how the Theranos trials reflect on their own duties under the Clinical Laboratory Improvement Amendments of 1988 (CLIA).

Ramesh “Sunny” Balwani
 
Ramesh “Sunny” Balwani (above center), former COO/President of Theranos, is shown leaving the federal courthouse in San Jose, Calif., on July 7 after he was found guilty on all 12 counts of fraud, a verdict more severe than ex-CEO and Theranos founder Elizabeth Holmes received in January for similar charges. Clinical laboratory directors and medical laboratory scientists have been closely monitoring both trails. (Photo copyright: Jim Wilson/The New York Times.)

Balwani’s Age and Experience May Have Worked Against Him

Michael Weinstein, JD, a former Justice Department prosecutor who is the Chair of White-collar Litigation at Cole Schotz, told The New York Times that Balwani’s age and his trial date—three months after Holmes’ conviction—worked against him. Balwani, 57, could not present himself as a young and inexperienced tech executive easily manipulated by those around him, as Holmes, 38, had attempted to do.

“Holmes could come off as a bit naïve, and [her defense team] tried to sell that,” Weinstein said of the former Stanford University dropout who founded Theranos in 2003 when she was 19.

In Holmes’ case the verdict was mixed, with jurors acquitting her of the patient fraud counts but unable to reach a decision on some of the investor fraud counts, Bloomberg reported.

Mr. Balwani, however, “came off as more of an experienced technology executive,” Weinstein added.

Weinstein pointed out that because the government’s case against Balwani mirrored its case against Holmes, prosecutors had time to refine their strategy before making a second appearance inside US District Court Judge Edward Davila’s San Jose courtroom.

“The streamlined presentation, the streamlined evidence, the streamlined narrative—all was beneficial for the government in the end,” he said.

Ever since opening arguments in March, Balwani’s legal team portrayed him to the jurors as a loyal partner who believed in Theranos’ technology and “put his money where his mouth is,” the Guardian noted.

Prosecutors, however, made the case that Balwani had a hands-on role in running the lab and was the source of Theranos’ overinflated financial projections.

Balwani invested about $15 million in the startup between 2009 and 2011 and never cashed in when his stake grew to $500 million. That money evaporated when Theranos collapsed.

In all, 24 witnesses testified against Balwani. He was ultimately convicted of all 12 counts he faced:

  • Two counts of conspiring with Holmes,
  • Six counts of defrauding investors, and
  • Four counts of patient fraud.

Major Differences in Trial Testimony

The Balwani trial made headlines due to COVID-19 pandemic related delays, but otherwise did not produce the news-generating moments that punctuated Holmes’ nearly four-month-long court appearance. Thirty-two witnesses appeared at the Holmes trial, including Secretary of Defense James Mattis, according to CNN.

Another significant difference in the two trials was that Holmes testified in her own defense. Holmes spent nearly 24 hours on the stand, CNN Business noted at that time, during which she cast the blame for Theranos’ failings on those around her, including Balwani.

In one of her trial’s most dramatic moments, a tearful Holmes accused Balwani of emotional and sexual abuse, including forcing her to have sex, which Dark Daily covered in “Balwani and Holmes’ Personal Relationship Takes Center Stage in Criminal Trial, Fueling Continued Public Interest in Theranos Fraud Saga.” Balwani denied those allegations.

ABC News Rebecca Jarvis, host and creator of the podcast “The Dropout,” believes Balwani’s decision not to testify worked against him.

“[The abuse claims] did not come up at his trial, but during [Holmes’] seven days of testimony, they were a big portion of what she talked about,” Jarvis said in an ABC NewsStart Here” podcast. “The biggest difference is that he didn’t take the stand to say, ‘I didn’t do this,’ or … raise his own objections to the claims against him.

“You think about a jury who is supposed to know nothing about any of [the defendant’s] backstory, and they’re shown these things like … case pictures of [Holmes] so much younger than [Balwani], supposedly having to rely on him for his expertise,” Jarvis added.

“You can imagine where the jury may have found that presentation more sympathetic than Sunny Balwani who had experience,” she said.

Text May Have Been Balwani’s Undoing

Balwani’s defense team called only two witnesses:

  • A naturopathic physician who used Theranos’ blood-testing lab, and
  • A technical consultant who Balwani’s legal team hired to assess the accessibility of patient data in Theranos’ Laboratory Information System (LIS), which the defense argued could have provided evidence of the accuracy of Theranos’ test results.

Attorney Jennifer Kennedy Park, JD, a partner at Cleary Gottlieb, told Yahoo Finance the LIS database may have played a role in the jury’s verdict as well.

“This verdict also signals the jurors did not buy Balwani’s highly speculative argument that the database Theranos lost in 2018 would have proven his innocence,” Park said.

In a statement to CNN Business, Balwani attorney Jeffrey Coopersmith, JD, of Orrick, Herrington and Sutcliffe, LLP, said the defense is exploring avenues to possibly fight the jury’s decision.

“We are obviously disappointed with the verdicts,” he said. “We plan to study and consider all of Mr. Balwani’s options including an appeal.”

Following the verdicts, Judge Davila raised Balwani’s bail to $750,000 and set a Nov. 15 sentencing date. Holmes is scheduled to be sentenced Sept. 26.

Balwani’s own words may have been his final undoing. During closing arguments, prosecutors again showed jurors a text message Balwani sent to Holmes in 2015, The New York Times reported.

“I am responsible for everything at Theranos,” he wrote. “All have been my decisions too.” 

Clinical laboratory directors and medical laboratory scientists will no doubt continue to monitor the fallout from these two extraordinary federal fraud trials. There’s still much to learn about CLIA-laboratory director responsibility and how the government plans to prevent future lab testing fraud from taking place.

Andrea Downing Peck

Related Information:

Tweet: FBI San Francisco

Theranos Trial: Legal Saga Reaches Final Chapter as Sunny Balwani Faces Verdict

No. 2 Theranos Executive Found Guilty of 12 Counts of Fraud

The Key Moments from Elizabeth Holmes’ Trial

Theranos Ex-President Balwani Found Guilty of Fraud

ABC: Start Here Podcast

Theranos: Elizabeth Holmes Co-Defendant Sunny Balwani Found Guilty of All 12 Counts

Former Theranos COO Is Guilty of Federal Fraud

Closing Statements Made in Trial of Sunny Balwani

Theranos Trial: Legal Saga Reaches Final Chapter as Sunny Balwani Faces Verdict

Former Theranos President’s Defense Rests in Criminal-Fraud Trial

Former Theranos Executive Sunny Balwani’s Fraud Trial Heads to Jury

Ex-Theranos CEO Elizabeth Holmes Will Be Free on Bail Until September 26 Sentencing Hearing for Criminal Fraud Conviction

Start of ex-Theranos president and COO Sunny Balwani’s federal trial will be pushed to mid-March due to COVID-19 spike in California

Just when most clinical laboratory managers and pathologists thought the guilty verdict in the Elizabeth Holmes fraud case would bring an end to the saga, we learn her chapter in the Theranos story will instead extend another eight months to September when the former Silicon Valley CEO will be sentenced. However, a brand-new chapter will begin in March when the fraud trial of ex-Theranos president and COO Ramesh “Sunny” Balwani begins.

Holmes’ fraud trial concluded on January 3 with the jury convicting her on one count of conspiracy to defraud investors and three counts of wire fraud after seven days of deliberation and nearly four months of trial proceedings.

Holmes remains free on a $500,000 bond while awaiting sentencing.

Elizabeth Holmes

Elizabeth Holmes is seen above arriving at the US District courthouse in San Jose, Calif. On January 3, the former Theranos CEO was convicted on three counts of wire fraud and one count of conspiracy to defraud investors. US District Judge Edward Davila set Holmes’ sentencing date for September 26. Clinical laboratory directors and pathologists who have closely followed the trial will have to wait eight months for the conclusion of this chapter in the Theranos saga. (Photo copyright: The Guardian.)

“I would be utterly shocked if she wasn’t sentenced to some term of imprisonment,” Amanda Kramer, JD, a former federal prosecutor who is now a partner with New York-based Covington & Burling LLP, told NPR.

“What is the sentence that will deter others who have a failing business from making the choice to commit fraud, rather than owning up to the failings and losing their dream?” she added.

Holmes, 37, faces a possible prison sentence of 20 years in prison as well as a $250,000 fine and possible restitution. But some legal experts expect a much shorter prison sentence for the disgraced CEO, who has no prior criminal history and is a first-time mother of a son born last July.

While sentencing typically takes place within a few months of a verdict being reached in a federal criminal trial, US District Judge Edward Davila set 1:30 p.m. September 26, 2022, as the date for Holmes’ sentencing hearing, according to his order dated January 12.

The Mercury News reported the lengthy delay in sentencing may be due to the start of Balwani’s upcoming trial on identical fraud charges. The delay in Holmes’ sentencing will allow for Balwani’s trial to begin in mid-March after being pushed back one month due to a spike in COVID-19 cases in California, The Mercury News reported.

Judge Davila will preside over Balwani’s trial as well.

Jury Acquits Holmes on Patient-related Charges

Holmes was acquitted of conspiracy to defraud patients of the now-defunct blood-testing laboratory and the jury failed to reach a unanimous decision on three other wire fraud charges.

University of Michigan Law Professor Barbara McQuade, a former US Attorney and an NBC News Legal Analyst, told CNBC she expects prosecutors to rethink their strategy in the Balwani trial based on the jury’s acquittal of Holmes on conspiracy and fraud charges involving Theranos patients.

“Knowing that this jury acquitted on all of the patient counts, I think that strategically, they should look to find a more direct way to explain why that is part of the fraud, that they necessarily knew that ultimately patients would be defrauded. And that although they didn’t know these individual patients by name, they knew that they existed in concept,” McQuade said.

One of the jurors in the Holmes’ trial, Wayne Kaatz, told ABC News he and other jurors were dismayed by their inability to come to a unanimous consensus on the three of the charges. A mistrial was declared on those three counts.

“We were very saddened,” Kaatz said. “We thought we had failed.”

Did Holmes Charm the Jury?

When Holmes dropped out of Stanford at age 19 to form Theranos, her goal, she claimed during testimony, was to transform healthcare by creating a blood-testing device capable of performing hundreds of clinical laboratory tests using a finger-stick of blood. She became a Silicon Valley sensation because of her charisma and charm, which she used to sell her dream to big money investors such as Oracle co-founder Larry Ellison and former US Secretary of State George Shultz.

Kaatz acknowledged Holmes’ personality also impacted the jury.

“It’s tough to convict somebody, especially somebody so likable, with such a positive dream,” Kaatz explained to ABC News, noting, however, that he voted guilty on the three counts on which the jury could not agree. “[We] respected Elizabeth’s belief in her technology, in her dream. [We thought], ‘She still believes in it, and we still believe she believes in it.’”

In the light of Holmes’ conviction, McQuade suggested it would not be shocking to see Balwani consider a plea deal in exchange for a lighter sentence.

“Could we perhaps, enter a guilty plea and get a reduction for acceptance of responsibility?” she said. “It’s certainly something that you have to look at.”

And so, the saga continues. Clinical laboratory directors and pathologists who followed Holmes’ trial with rapt interest should prepare for a new set of twists and turns as Ramesh Balwani prepares to face his own day in court.

Andrea Downing Peck

Related Information:

Exclusive: Jury Speaks Out After Convicting Elizabeth Holmes

Elizabeth Holmes: Theranos Fraudster to Avoid Sentencing for at Least Eight Months

Theranos Ex-President’s Fraud Trial Delayed by COVID Surge

United States v. Elizabeth Holmes, et al.: 18-CR-00258-EJD

Former Theranos CEO Elizabeth Holmes to be Sentenced on Sept. 26

Elizabeth Holmes Verdict Complicates Upcoming Trial of Her Ex-Boyfriend and Former Theranos COO Sunny Balwani

Two Important Aspects for Clinical Laboratories to Consider Following Elizabeth Holmes’ Conviction

Theranos Ex-CEO Elizabeth Holmes Convicted on Three Counts of Wire Fraud and One Count of Conspiracy to Commit Fraud after Seven Days of Jury Deliberations

Theranos Whistleblower Tyler Shultz Celebrates Former CEO Elizabeth Holmes’ Guilty Verdict by Popping Champagne with Family Members

Another Former Theranos Clinical Laboratory Director Testifies in Holmes’ Fraud Trial about Irregularities with Proprietary Edison Blood-Testing Technology

Pathologist Kingshuk Das, MD, tells jurors he voided 50,000 to 60,000 blood-tests from a two-year period due to unreliable results

As the prosecution in the criminal fraud trial of ex-CEO Elizabeth Holmes closes in on resting its case, a fourth and final former Theranos laboratory director took the stand to describe the problems he encountered when overseeing the startup’s medical laboratory operations.

Los Angeles, Calif., board-certified clinical pathologist Kingshuk Das, MD, testified that he reported directly to Holmes and repeatedly warned her about problems and errors with the company’s Edison blood-testing technology, CNBC reported. While describing the proprietary technology’s reliability issues, Das spoke of one conversation with Holmes in which he pointed out that female patients were receiving test results showing abnormal levels of prostate-specific antigen, or PSA, which typically is associated with the male prostate gland.

“Females should generally not have PSA detectable,” Das said during testimony. He “recalled that Holmes offered an alternate explanation, citing ‘an article or two’ claiming rare breast cancers might cause PSA results in women,” CNBC reported.

Assistant US Attorney Robert Leach, JD then asked Das, “Was that explanation satisfying to you?”  

“It seemed implausible,” Das replied.

According to CNBC, Das—who worked at Theranos from March 2016 until June 2018—testified that he “voided every test on the Edison devices from 2014 and 2015” and that he had “explained to Holmes that ‘these instruments were not performing from the very beginning.’

During his testimony, Das explained, “I tried to present it in a more understandable format. I recall [Holmes] offering an alternative explanation,” CNBC reported.

Das testified that “Holmes told him it wasn’t an instrument failure but rather a quality control and quality assurance issue,” CNBC reported.

According to The Wall Street Journal (WSJ), corrected reports were issued to doctors for an estimated 50,000 to 60,000 voided results.

CMS Audit: Theranos Lab Posed ‘Immediate Jeopardy to Patient Health and Safety’

Das said his first task at Theranos was responding to a letter of proposed sanctions following a 121-page deficiencies report from the Centers for Medicare and Medicaid Services (CMS). CMS had audited Theranos’ lab in the fall of 2015 prior to Das’ hiring.

The CMS report stated, “As a result of the survey, it was determined that your facility is not in compliance with all of the conditions required for certification in the CLIA program. … The deficient practices of the laboratory pose immediate jeopardy to patient health and safety,” CNBC reported.

Dark Daily covered these actions by CMS in “CMS Notifies Theranos of CLIA Sanctions That Include Revoking Clinical Laboratory’s CLIA License and a Two-Year Ban on Holmes, Balwani, and Dhawan.”

Kingshuk Das, MD

Former Theranos Laboratory Director pathologist Kingshuk Das, MD, testified in the Elizabeth Holmes fraud trial that, when he was hired, he was not told the laboratory had previously been inspected by the Centers for Medicare and Medicaid Services and found deficient. He testified in federal court that he ultimately voided an estimated 50,000 to 60,000 clinical laboratory test results due to the unreliability of the proprietary Edison blood-testing devices. (Photo copyright: LinkedIn.)

Testimony of Four Former Theranos Lab Directors

Das is the fourth Theranos laboratory director to take the stand. He joined the startup in 2016 and was laid off in 2018.

Previous reporting in Dark Daily and our sister publication The Dark Report covered court testimony from the three lab directors who preceded Das (click on names to be taken to those stories):

Rosendorff provided some of the trial’s most explosive news when it was revealed that he was the whistleblower behind The Wall Street Journal’s exposé into Theranos that first raised questions about the startup’s technology and operations.

Defense Claims Holmes Did Not Intentionally Mislead Investors

As noted in The Verge, Holmes’ defense strategy centers on convincing jurors she did not intentionally mislead investors, patients, physicians, and clinical laboratories about Theranos’ proprietary technology, but that she simply failed to achieve the goals she set for Theranos.

“Trying your hardest and coming up short is not a crime,” defense lawyer Lance Wade, JD, told jurors in his opening statement, The Verge reported. “And by the time this trial is over, you will see that the villain the government just presented is actually a living, breathing human being who did her very best each and every day. And she is innocent,” Wade added.

While Holmes is not expected to take the stand in her own defense, prosecutors used her own words against her last month when they played audiotapes for the jury of telephone calls Holmes made to investors in 2013. According to KRON4-TV in San Francisco, Holmes told investors Theranos’ revenues would reach $140 million in revenue in 2014, though the company had not recorded any revenue the two prior years.

Legal analyst Michele Hagan, JD, a former San Francisco Assistant District Attorney, told KRON4-TV the audiotapes are likely to impact the jury.

“It’s very powerful testimony when you can use the defendant’s own words, and these audiotapes can incriminate her,” Hagan said.

Holmes, 37, faces maximum penalties of 20 years in prison and a $2.75 million fine if convicted of two counts of conspiracy to commit wire fraud and 10 counts of fraud, plus possible restitution, the Department of Justice has said. Balwani’s criminal fraud trial is scheduled to begin in January 2022.

With the prosecution just inches away from resting its case, clinical laboratory managers and pathologists will not have to wait long to learn if Holmes’ defense team mounts a defense against fraud charges or allows the case to be turned over to the jury.

—Andrea Downing Peck

Related Information:

In Elizabeth Holmes Trial Ex-Theranos Employees Cite Culture of Fear and Isolation

Theranos Lab Deficiencies Posed ‘Immediate Jeopardy’ to Patients, 2016 Government Audit Warned

What We Learned This Week in the Trial of Elizabeth Holmes

Theranos Voided 50,000 to 60,000 Tests, Former Lab Director Says

Theranos Hired Its President’s Dermatologist as Lab Director in 2014, Testimony Shows

Former Lab Director Said Theranos Prioritizes Public Relations and Funding Over Patient Care

Hot Startup Theranos Has Struggled with its Blood-Test Technology

Elizabeth Holmes Hired a Bunch of Experts So She Could Ignore Them

Theranos Trial: Investor Details Frustration with Holmes over Lack of Information

‘Failure Is Not a Crime,’ Defense Says in Trial of Theranos Founder Holmes

Elizabeth Holmes Trial: Audio Tapes Released by Prosecutors

Elizabeth Holmes Audio Tapes Released by Prosecutors

Corporate Executives and Mega-Rich Investors Testify in Elizabeth Holmes’ Federal Fraud Trial That They Were Misled by Theranos’ Claims about the Edison Blood-Testing Device

Prosecutors in Elizabeth Holmes’ Federal Fraud Trial Question Witnesses about Theranos’ Edison Technology and the Inaccurate Medical Laboratory Test Results It Produced

Third CLIA Lab Director Testifies in Trial of Elizabeth Holmes

Former Theranos Lab Director and Staff Testify in Ongoing Elizabeth Holmes Fraud Trial That They Voiced Concerns about Reliability and Accuracy of Edison Blood-Testing Device

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