Brian Grossman had 20 years of experience in the healthcare space — but his firm, PFM Health Sciences, invested $96 million in Theranos anyway. On the stand, he explained that his firm had relied on Elizabeth Holmes’ information about Theranos, as well as financial models provided by the company, to make the call.
Taken as a whole, Grossman’s testimony in US v Elizabeth Holmes was damning. Unlike the investors from family offices, he’d visited Theranos’ facilities, had his blood drawn, and sent emails with extensive due diligence questions. He had experience in healthcare. He’d checked out Walgreens’ public statements about the company. But because he’d relied on Theranos’ representations of its technology, he was misled — and he singled out Holmes as being the source of much of the misleading information.
Holmes told him that Theranos could match anything its much-larger competitors, Quest Diagnostics and Labcorp, could do. That was “a really big statement” about how much the company had accomplished, Grossman said.