In 2006, Alan Eisenman invested more than $1 million in Theranos, a then-promising medical diagnostic company founded by college dropout Elizabeth Holmes. Holmes had told him that her company was talking with Morgan Stanley about an IPO in 12–18 months and that the company would bring in $200 million in revenue by 2008.
For years, Eisenman and Holmes were in frequent communication, including quarterly calls with other investors and one-on-one conversations. He was impressed that the company had contracts with a number of pharmaceutical companies, including Pfizer and Novartis, and believed in its mission.
Eisenman is a retired financial planner from Texas, and he took the stand yesterday in Holmes’ criminal trial. Holmes is being charged with ten counts of wire fraud and two counts of conspiracy to commit wire fraud. Eisenman’s investment is one of the counts of wire fraud. For him, Theranos’ shine tarnished in 2010 when communications from Holmes and Theranos “dropped to zero,” Eisenman said.