The $9 billion Silicon Valley biotech startup Theranos received a slew of positive press since unveiling its products to the public two years ago, following a decade of working in secret. The company purports to have developed a way to obtain quick blood test results based on only a tiny sample drawn at a local "wellness center" from the prick of a needle, no doctor visit or painful syringe stab required.

According to Theranos founder Elizabeth Holmes, her technology amounts to nothing less than a health-care revolution: a disruptive and lifesaving innovation that delivers cheaper, earlier, and less painful results.

But Theranos, and Holmes, has also been surrounded by a cloud of suspicion lately. Critics have asked for proof that the company's technology actually works, and that its results are accurate. Holmes — the world's youngest self-made woman billionaire at 31 — and her PR team have mainly responded by citing intellectual property concerns and suggesting that the seeds of doubt have been sown by incumbent laboratory companies such as Quest and Laboratory Corporation.

That's the context for today's explosive Wall Street Journal investigation on Theranos. For about half a year, reporter John Carreyrou tried to answer some of the questions well-meaning critics have been asking.

Instead, he kept hitting walls put up by the company's lawyers. The resulting story revealed an extremely paranoid Silicon Valley startup, and raised even more questions about the quality of the company's blood tests and Holmes's revolutionary claims.



A follow-up story in the Journal the next day answered some of them: According to a source familiar with the company, Theranos had actually stopped collecting blood from its tiny vials for all but one of its tests on a Food and Drug Administration order. Holmes confirmed this in an interview with Bloomberg.



This means the company was basically operating like a traditional lab behind the scenes, while touting a revolution in public.

Do Theranos's machines work?

First, there's the puzzle about Theranos’s "Edison machines." They're one of the company's flagship products, designed to run fast, high-quality blood tests using only a tiny drop of blood. But the Journal reports they're allegedly hardly being used by Theranos, and that the startup actually relies on older technology from other companies for the bulk of its testing.

What's more, former employees and doctors Carreyrou spoke to flagged concerns about the Edison machines' accuracy:

One former senior employee says Theranos was routinely using the device, named Edison after the prolific inventor, for only 15 tests in December 2014. Some employees were leery about the machine’s accuracy... In a complaint to regulators, one Theranos employee accused the company of failing to report test results that raised questions about the precision of the Edison system. Such a failure could be a violation of federal rules for laboratories, the former employee said.

In his follow-up, Carreyrou confirmed that the FDA recently asked Theranos to stop using its technology on all its blood tests, except for the one the regulator has approved (for herpes simplex 1). To the company's credit, it has been working with the FDA to validate other tests, though those results are still pending. And until they're approved, it seems Theranos is mostly just like a mainstream lab — taking blood through needles in patients' arms, using traditional technology — albeit one with a lot of hype and promises around it.

Theranos aggressively tried to shut down the Wall Street Journal investigation

There were other bizarre revelations in the Journal. Some parts of the Theranos website, which carried claims Carreyrou was probing, disappeared during his investigation. One former employee, Dr. Ian Gibbons, killed himself, and after the reporter spoke to his widow, "a lawyer representing Theranos sent her a letter threatening to sue her if she continued to make 'false statements' about Ms. Holmes and disclose confidential information."

The story goes on like this: Theranos repeatedly swings back at the Journal, even sending representatives to the homes of some of Carreyrou's sources to ask them to sign statements saying the newspaper "mischaracterized their comments."

Unsurprisingly, almost as soon as the story went up, the company published a statement denying many of the facts in the piece:

Today’s Wall Street Journal story about Theranos is factually and scientifically erroneous and grounded in baseless assertions by inexperienced and disgruntled former employees and industry incumbents. Theranos presented the facts to this reporter to prove the accuracy and reliability of its tests and to directly refute these false allegations, including through over 1,000 pages of statements and documents.

Holmes also turned to Twitter to discredit Carreyrou:

@KulkarniApoorv @WSJhealth How disappointing. Full of falsehoods. We even offered to show them our technology, and they declined. — Elizabeth Holmes (@eholmes2003) October 15, 2015

But critics weren't impressed by the replies, mainly because they don't address the allegations about the effectiveness of Theranos's products:

Lot of handwaving. Not at all a substantive rebuttal. Why not publish these docs then? https://t.co/8Fqzs0WaoC pic.twitter.com/rQGy9KfYCO — Farhad Manjoo (@fmanjoo) October 15, 2015

We're being attacked because we're changing the world! pic.twitter.com/z5iCEE42h0 — Farhad Manjoo (@fmanjoo) October 15, 2015

As Forbes's Matthew Herper points out, Holmes has been deflecting critics for too long. He implored her to change tactics:

Theranos' Elizabeth Holmes Needs To Stop Complaining And Answer Questions http://t.co/8QadRWqKo5 <--my take on @WSJ, with video of Holmes. — Matthew Herper (@matthewherper) October 15, 2015

Interestingly, Carreyrou said in his story that he did more than his due diligence:

Ms. Holmes, Theranos’s chairman and chief executive, declined interview requests from the Journal for more than five months. Last week, the company said she would be available to comment, but her schedule didn’t allow it before publication of this article.

We also asked Theranos to comment for this story, in particular about why the company wasn't directly responding to the concerns about the validity of its tests. A company spokesperson referred me to Theranos's already published statement.

So what does Theranos have to hide?

For one thing, it seems the company was hiding the fact that its revolution in blood testing technology is hitting some major regulatory barriers and has mostly stalled. Holmes told Bloomberg that this is just a transition phase, and that once all of its tests are validated, the blood testing revolution will continue.



Perhaps that's true. But these stories leave hanging in the air questions about whether Theranos's technology actually works as promised — questions the company has mostly avoided answering while it was rolling its tests out across the United States, until the FDA pushed back recently.



Cheaper, faster, and more efficient blood testing technology, if it lives up to Holmes's promises, really could have an impact. But until Theranos — which has come to be worth billions overnight — does a better job of responding to important questions, its credibility problem isn't going away.