Changes continue at microbiome testing company following an FBI raid.
uBiome was founded in 2013 by Jessica Richman and Zach Apte with $350,000 raised from a crowdfunding campaign. The company first offered the consumer test Explorer and then the targeted tests SmartGut and SmartJane, which were designed to evaluate gut and vaginal health, respectively, as well as a test to for microbes that may contribute to flu symptoms.
Since it was established, uBiome raised a total of $83 million in venture funding, formed academic partnerships with UC San Francisco and Harvard University and attracted top industry talent, including ex-Novartis CEO Joe Jiminez, to is board.
However, the situation has changed drastically since then. The tests SmartGut and SmartJane were taken off the market in May following a raid of uBiome’s office by the FBI in May. The agency is investigating uBiome’s billing practices. According to the Wall Street Journal, insurers are no longer paying for the tests because uBiome was suspected of using improper billing codes and charging for unnecessary tests.
Initially, the co-founders stepped aside from their roles as co-CEOs, with John Rakow, the company’s general counsel, serving as interim CEO and promising to “cooperate fully with government authorities and private payors to satisfactorily resolve the questions that have been raised.”
More recently, a special board committee formed in the wake of the FDA raid to conduct an internal investigation decided to make more sweeping changes. Richman and Apte have resigned from the board, and Rakow has been replaced by an interim management team of turnaround experts from consulting firm Goldin Associates: Curtis Solsvig as CEO, Robin Chu as CFO and Karthik Bhavaraiu as COO.