Microbiome testing service uBiome puts its co-founders on administrative leave after FBI raid

Published May 2, 2019

The microbiome testing service uBiome has placed its founders and co-chief executives, Jessica Richman and Zac Apte, on administrative leave following an FBI raid on the company’s offices last week.

The company’s board of directors have named John Rakow, currently the company’s general counsel, as its interim chairman and chief executive, the company said in a statement.

Directors of the company are also conducting an independent investigation into the company’s billing practices, which is being overseen by a special committee of the board.

It was only last week that the FBI went to the company’s headquarters to search for documents related to an ongoing investigation. What’s at issue is the way that the company was billing insurers for the microbiome tests it was performing on customers.

The FBI searched the offices of microbiome startup uBiome

“As interim CEO of uBiome, I want all of our stakeholders to know that we intend to cooperate fully with government authorities and private payors to satisfactorily resolve the questions that have been raised, and we will take any corrective actions that are needed to ensure we can become a stronger company better able to serve patients and healthcare providers,” Rakow said in a statement.

”My confidence is based on the significant clinical evidence and medical literature that demonstrates the utility and value of uBiome’s products as important tools for patients, health care providers and our commercial partners.” added Mr. Rakow.

It’s been a rough few weeks for consumer companies working on developing microbiome testing services and treatments based on those diagnosis. In addition to the FBI raid, the Seattle-based company, Arivale, was forced to shut down its “consumer program” after raising more than $50 million from investors, including Maveron, Polaris Partners and ARCH Venture Partners.

UBiome is backed by investors including Andreessen Horowitz, OS Fund, 8VC, Y Combinator, DNA Capital, Crunchfund, StartX, Kapor Capital, Starlight Ventures and 500 Startups.

uBiome is jumping into therapeutics with a healthy $83 million in Series C financing

Published September 21, 2018

23andMe, IBM and now uBiome is the next tech company to jump into the lucrative multi-billion dollar drug discovery market.

The company started out with a consumer gut health test to check whether your intestines carry the right kind of bacteria for healthy digestion but has since expanded to include over 250,000 samples for everything from the microbes on your skin to vaginal health — the largest data set in the world for these types of samples, according to the company.

Founder Jessica Richman now says there’s a wider opportunity to use this data to create value in therapeutics.

To support its new drug discovery efforts, the San Francisco-based startup will be moving its therapeutics unit into new Cambridge, Massachusetts headquarters and appointing former Novartis CEO Joseph Jimenez to the board of directors as well.

The company has a healthy pile of cash to help build out that new HQ, too, with a fresh $83 million Series C, lead by OS Fund and in participation with 8VC, Y Combinator, Dentsu Ventures and others.

The drug discovery market is slated to be worth nearly $86 billion by 2022, according to BCC Research numbers. New technologies — those that solve logistics issues and shorten the time between research and getting a drug to market in particular — are driving the growth and that’s where uBiome thinks it can get into the game.

“This financing allows us to expand our product portfolio, increase our focus on patent assets and further raise our clinical profile, especially as we begin to focus on commercialization of drug discovery and development of our patent assets,” Richman said.

Though its unclear at this time which drug maker the company might partner up with, Richman did say there would be plenty to announce later on that front.

So far, the company has published over 30 peer-reviewed papers on microbiome research, has entered into research partnerships with the likes of the Center for Disease Control (CDC) and leading research institutions such as Harvard, MIT and Stanford and has previously raised $22 million in funding. The additional VC cash puts the total amount raised to $105 million to date.