Holmes jury learns how Theranos duped a savvy health care investor

Elizabeth Holmes, founder of Theranos Inc., left, arrives at federal court in San Jose, California, on Tuesday, Nov. 2, 2021.

Enlarge / Elizabeth Holmes, founder of Theranos Inc., left, arrives at federal court in San Jose, California, on Tuesday, Nov. 2, 2021. (credit: David Paul Morris/Bloomberg)

We’ve noticed a recurring theme in the criminal trial of Elizabeth Holmes: most of Theranos’ investors didn’t do their homework before writing a check. But yesterday, the jury heard from one who most definitely did.

Brian Grossman is chief investment officer and a managing partner for PFM Health Sciences, a San Francisco-based hedge fund that, as the name suggests, specializes in health care investments. Ultimately, his firm invested $96 million in Theranos, and that investment underpins one of the counts of wire fraud with which Holmes has been charged.

Grossman began his day on the witness stand by recounting a December 2013 meeting he had with Holmes and Theranos COO Ramesh “Sunny” Balwani at the company’s lab in Palo Alto. Holmes and Balwani gave a presentation in which they claimed that Theranos had spent a decade in clinical trials and that their technology could do “a thousand” different blood tests.

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