Mike Windle

Among the tech elite, there are few people more beloved than Elizabeth Holmes, the 31-year-old CEO of Theranos, a company she started in her Stanford dorm room that makes low-cost diagnostic blood tests. Theranos is one of the largest private companies in Silicon Valley, with a valuation of $9 billion, and Holmes has become the world's youngest self-made female billionaire.

She's also become a media darling—collecting profiles in the New Yorker and appearances on Charlie Rose, and headlining conferences across the tech circuit. (At a recent Vanity Fair party, the magazine reported, "a line no shorter than four-people deep constantly awaited Holmes, who had earlier discussed transforming the health-care industry.") Scientists and laypeople alike have praised Theranos's testing model, which uses low-cost tests to screen for everything from diabetes to hepatitis.

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But Holmes and Theranos are the subjects of a brutal article in the Wall Street Journal, which accuses the company of exaggerating the precision of some of its diagnostic tests, and using machines bought from other companies rather than its own technology for a large number of tests.

The article, by investigative reporter John Carreyrou, cites several former Theranos employees who claim that while Theranos offers more than 200 types of diagnostic tests, it only ran 15 of those tests on its own machine, called Edison, as of late last year, outsourcing the rest to machines developed by other labs. (Theranos disputed that figure, but wouldn't give the Journal a more recent one.) The article also claims that former Theranos employees doubted the Edison's accuracy, and raised concerns about a test last year that showed discrepancies with another company's machine:

In early 2014, Theranos split some of the proficiency-testing samples it got into two pieces, according to internal emails reviewed by the Journal. One was tested with Edison machines and the other with instruments from other companies.

The two types of equipment gave different results when testing for vitamin D, two thyroid hormones and prostate cancer. The gap suggested to some employees that the Edison results were off, according to the internal emails and people familiar with the findings.

According to one former employee who spoke to the Journal, one Theranos test gave potassium results so high "that patients would have to be dead for the results to be correct."

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Theranos fought back hard against the Journal's reporting. The company dispatched mega-lawyer David Boies to refute many of the allegations made by the former employees, and even went so far as to threaten a lawsuit against the widow of a former Theranos employee for speaking to the paper. It also pulled the unusually aggressive move of contacting health care providers and patients who had spoken to the Journal about their negative experiences with Theranos tests, and asking them "to sign prepared statements that said the Journal mischaracterized their comments."

Theranos and Holmes have been the subjects of hushed gossip and rumormongering in Silicon Valley for years. The company closely guards many details about the technology behind its tests, which require much less blood to be drawn than conventional tests, explaining that it considers it a trade secret. And that tendency toward secrecy has raised eyebrows in the scientific community, where the open peer-review process is often used to test and validate new procedures.

"I admit it's very intentional," Holmes told Inc. magazine about the company's secretive operations. "We don't call on our competitors and explain how our technology works."

There have been various attempts over the years to poke holes in Theranos' methodology, but none of them have quite stuck. In part, that's because Holmes is a fantastic speaker and showman, and in part, it's because Theranos is already trusted by large, established companies like Walgreens, with which it has a partnership.

As Silicon Valley companies go, Theranos is as seemingly impressive as they come—a healthcare start-up that is radically expanding access to preventative medicine through cutting-edge technology. But now, with doubts aired in the Journal about the most basic components of its $9 billion business, it's going to have to play defense. A lot of defense.

A spokeswoman for Theranos didn't respond to a request for comment. Several hours after the Journal's story went up, Holmes tweeted a link to a Theranos response page called "Our Lab," which challenged many of the Journal's assertions.

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Update: This morning, Holmes tweeted that the Journal's report on Theranos was "disappointing" and "full of falsehoods." She will reportedly appear on CNBC's "Mad Money" later today to speak about the report.