- UBiome’s cofounders and co-CEOs Jessica Richman and Zac Apte have been placed on administrative leave, the company said on Wednesday.
- The move follows an FBI raid on uBiome’s offices in San Francisco.
- UBiome, a startup that sells tests that sequence your microbiome, has named John Rakow as interim CEO. Rakow is the company’s general counsel.
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UBiome’s cofounders and co-CEOs Jessica Richman and Zac Apte have been placed on administrative leave after an FBI raid on the company’s headquarters.
UBiome named John Rakow, its general counsel, as interim CEO and said in a news release on Wednesday that it plans to undertake an independent investigation into the company’s billing practices, overseen by its board.
“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 news release on Wednesday.
The FBI raided the San Francisco offices of uBiome on Friday. UBiome sells tests that sequence the microbiome, which is the assortment of bacteria and other microbes that live in our bodies. To date, the company has raised $105 million from investors.
The Wall Street Journal, which first reported the raid, reported that the FBI is investigating uBiome’s billing practices.
At the time, the FBI confirmed that its agents were “conducting court-authorized law enforcement activity” at the address of uBiome’s headquarters but declined to provide further information.
UBiome sells doctor-ordered tests, including SmartJane, its test that looks at the vaginal microbiome to test for sexually transmitted diseases and chronic vaginal infections, and SmartGut, which looks at the gut microbiome to test for gut conditions and metabolic disorders. Both can be covered by health insurance. UBiome also sells a direct-to-consumer test that doesn’t require a prescription called the “Explorer” test.
CNBC reportedthat uBiome routinely charged patients’ plans twice for tests. CNBC also reported that the health insurer Anthem had flagged the company for its over-billing practices. Anthem did not immediately return a request for comment.
Scientists have been working on ways to use the microbiome to unlock new treatments for difficult diseases. It’s led to new companies, both on the medical side and in agriculture, that are taking a variety of approaches to looking at the microbiome, which is often seen as the “forgotten organ.”