Former Walgreens Boots Alliance Inc. executive Wade Miquelon had a lot of reasons to be excited about the blood-testing startup he met with in early 2010.
Mr. Miquelon, the Walgreens chief financial officer from 2008 to 2014, traveled to Silicon Valley from Illinois that year for a meeting with Theranos Inc. founder Elizabeth Holmes and her top deputy, Ramesh “Sunny” Balwani. There he heard a pitch similar to what other Theranos investors and business partners were told: the startup could run around 95 percent of all conventional lab tests on its proprietary testing devices, and results were ready in 15 or 20 minutes.
Mr. Miquelon, now the chief executive officer of Jo-Ann Stores Inc., a fabric and craft retailer, testified Tuesday in the ongoing criminal fraud trial of Ms. Holmes. He will resume testimony Wednesday as the prosecution’s 11th witness to try and build the government’s case that Ms. Holmes knowingly misled investors and patients about the capabilities of Theranos’s blood-testing technology.
Mr. Miquelon said Walgreens was initially drawn to Theranos’s claim that it had disrupted the traditional lab business with small testing devices that could be placed in a pharmacy or clinic and quickly return results to patients, rather than relying on large, expensive machines that occupy sprawling real estate.
Ms. Holmes wanted to launch a partnership with Walgreens starting in April 2010, according to Mr. Miquelon’s testimony, just as Theranos was also working toward a deal with Safeway Inc. to put its blood-testing devices inside grocery stores. Theranos and the drugstore chain went on to cement a deal in 2013 to create dozens of Theranos blood-testing centers in Walgreens stores.
Ms. Holmes also told Walgreens executives that three pharmaceutical companies had performed due diligence on Theranos technology, according to court testimony. That became an important piece in Walgreens’s decision to strike a partnership with Theranos, Mr. Miquelon said.
“This was one of the most exciting companies that we had seen, maybe not just in lab but in general,” Mr. Miquelon said.
The relationship unraveled after Theranos missed key partnership deadlines, culminating in a lawsuit filed by Walgreens in 2016 alleging Theranos misled it about the startup’s technology.
In earlier court testimony, former Theranos lab employees said Theranos’s proprietary machines weren’t capable of running the majority of the lab tests the company offered, so they instead often used off-the-shelf commercial analyzers.
Prosecutors have alleged that Ms. Holmes’s claim of having her technology validated by pharmaceutical companies was outright false, including a forged document with a Pfizer Inc logo.
One of the diligence reports that Ms. Holmes sent to Walgreens, which prosecutors presented in court Tuesday, included the logo of pharmaceutical company Schering-Plough Corp. In the second line of the report, the word institute was misspelled in the company’s name as “Schering Plough Research Institute.”
