Founders of poop-test­ing uBio­me, re­port­ed­ly on the run, charged by SEC with de­fraud­ing in­vestors

Fol­low­ing sev­er­al high-pro­file hic­cups a few years ago that in­clud­ed an FBI raid and ul­ti­mate­ly led to a bank­rupt­cy fil­ing, uBio­me saw its founders run in­to more trou­ble Thurs­day: se­cu­ri­ties fraud.

Jes­si­ca Rich­man

The SEC charged Jes­si­ca Rich­man and Zachary Apte, the co-founders of the poop-test­ing start­up uBio­me, with de­fraud­ing in­vestors out of $60 mil­lion through mis­lead­ing state­ments and false rep­re­sen­ta­tions of the com­pa­ny’s prospects. Ac­cord­ing to the SEC com­plaint, the charges stem from a 2018 Se­ries C round valu­ing the com­pa­ny that once ap­point­ed ex-No­var­tis CEO Joe Jimenez to its board at near­ly $600 mil­lion.

Reg­u­la­tors sub­mit­ted their fil­ing in fed­er­al court in San Fran­cis­co, and are seek­ing to bar Rich­man and Apte from serv­ing in fu­ture of­fi­cer and di­rec­tor po­si­tions. Thurs­day’s in­dict­ment de­scribes Rich­man and Apte as fugi­tives, per a Wall Street Jour­nal re­port.

Zac Apte

Found­ed way back in 2012, uBio­me burst on­to the scene with a pledge to crowd­source the se­quenc­ing and map­ping of the hu­man mi­cro­bio­me — the bac­te­r­i­al ecosys­tem in­side the gut that some sci­en­tists say has wide-rang­ing im­pacts on one’s health. The com­pa­ny pitched it­self as the next 23andMe, of­fer­ing to an­a­lyze stool sam­ples and re­turn health-re­lat­ed ad­vice.

It was an idea that cap­tured the imag­i­na­tion of the ear­ly-2010s era Sil­i­con Val­ley. By the time its In­diegogo fund­ing page closed in Feb­ru­ary 2013, uBio­me had raised over $350,000. The com­pa­ny al­so re­cruit­ed sev­er­al no­table sci­en­tists over the years, in­clud­ing ge­neti­cist George Church to its sci­en­tif­ic ad­vi­so­ry board.

uBio­me even­tu­al­ly ex­pand­ed their prod­ucts to in­clude vagi­nal health and STDs women face. And to os­ten­si­bly beef up a drug R&D plan, the com­pa­ny added Jimenez to its board in 2018, de­spite a scan­dal where Jimenez paid for­mer Pres­i­dent Don­ald Trump’s per­son­al at­tor­ney Michael Co­hen a $1.2 mil­lion con­tract.

But the house of cards be­gan to crum­ble when some re­searchers sound­ed alarms that the sci­ence be­hind the com­pa­ny didn’t all add up. They said that, like when 23andMe first start­ed, there sim­ply hadn’t been enough re­search in­to the mi­cro­bio­me to of­fer sweep­ing health ad­vice based on a stool sam­ple. 23andMe, af­ter fac­ing its own crit­i­cism, even­tu­al­ly gained FDA ap­proval for sev­er­al of its ser­vices.

Then in ear­ly 2019, uBio­me cut 55 jobs from its 300-per­son work­force. That was quick­ly fol­lowed by re­ports that April of an im­pend­ing FBI in­quiry in­to uBio­me’s busi­ness prac­tices, which ul­ti­mate­ly cul­mi­nat­ed in a raid of their of­fices. Of­fi­cials were con­cerned the start­up had al­leged­ly hound­ed doc­tors to ap­prove their tests with lit­tle over­sight and over­billed cus­tomers.

The SEC brought those con­cerns to light in its com­plaint. Reg­u­la­tors claim that in or­der to gen­er­ate rev­enue, Rich­man and Apte di­rect­ed uBio­me to fool doc­tors in­to or­der­ing un­nec­es­sary tests and, de­spite sev­er­al warn­ings from em­ploy­ees and their gen­er­al coun­sel, ig­nored the need for the tests to meet cer­tain health in­sur­ance com­pa­ny re­quire­ments.

De­fen­dants ig­nored these warn­ings and adopt­ed and ap­proved sev­er­al im­prop­er billing prac­tices that they knew, or were reck­less in not know­ing, fell be­low in­sur­er re­quire­ments and thus, once dis­cov­ered, would prompt in­sur­ers to re­ject re­im­burse­ment claims for uBio­me’s clin­i­cal tests. De­fen­dants en­gaged in de­cep­tive acts to con­ceal facts per­ti­nent to uBio­me’s prac­tices from the com­pa­ny’s gen­er­al coun­sel, the uBio­me board, pre­scrib­ing doc­tors, and in­sur­ers.

Af­ter the in­ves­ti­ga­tion be­came pub­lic, Rich­man and Apte left the com­pa­ny to make room for a new man­age­ment team. That Sep­tem­ber, uBio­me filed for Chap­ter 11 bank­rupt­cy, shift­ing to Chap­ter 7 liq­ui­da­tion a month lat­er in or­der to sell off its da­ta and IP.

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Mathai Mammen (Rob Tannenbaum, Endpoints News at BIO 2018)

Math­ai Mam­men makes an abrupt ex­it as head of the big R&D group at J&J

In an after-the-bell shocker, J&J announced Monday evening that Mathai Mammen has abruptly exited J&J as head of its top-10 R&D group.

Recruited from Merck five years ago, where the soft-spoken Mammen was being groomed as the successor to Roger Perlmutter, he had been one of the top-paid R&D chiefs in biopharma. His group spent $12 billion last year on drug development, putting it in the top 5 in the industry.

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Amid mas­sive re­struc­tur­ing, Bio­gen looks to re­duce phys­i­cal pres­ence in Boston

Biogen is putting a sizable chunk of office and research space in Kendall Square and Weston, MA up for sublease, marking another big change as the biotech grapples with the aftershock of a disastrous and controversial rollout for its Alzheimer’s drug.

The company calls it “part of Biogen’s overall implementation of the ‘Future of Work,’ which is allowing us to optimize our footprint and reduce the amount of space we occupy, taking into consideration new elements such as the hybrid work model,” the Boston Globe reported, quoting a spokesperson.

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Robert Califf, FDA commissioner (Tom Williams/CQ Roll Call via AP Images)

Hop­ing to ex­pand mon­key­pox vac­cine sup­ply, US paves the way for new route of ad­min­is­tra­tion

After making it clear that the US’ current monkeypox vaccine supply is insufficient, the FDA on Tuesday authorized a new route of administration that should increase the number of available doses by five-fold.

Regulators cleared Bavarian Nordic’s Jynneos vaccine for intradermal injection in adults older than 18. Unlike subcutaneous injection — the current method by which vaccine is delivered under the skin — an intradermal jab goes directly into the skin. It’s believed that this method requires less vaccine, since the dermis is rich in dendritic cells which specialize in taking up foreign antigens and presenting them to the immune system, according to Daniel Kuritzkes, chief of infectious diseases at Brigham and Women’s Hospital in Boston.

John Quisel, Disc Medicine CEO

Disc Med­i­cine goes pub­lic in re­verse merg­er with strug­gling Gem­i­ni Ther­a­peu­tics

After licensing a failed Roche schizophrenia drug last year, Disc Medicine is going public via a reverse merger with Gemini Therapeutics.

The combined company, while still named Disc Medicine, will trade under the stock symbol $IRON, in reference to Disc’s lineup of therapies for blood iron disorders. Alongside the merger, Disc has secured $53.5 million in another financing round, building on the $90 million Series B it raised in September.

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Illustration: Kim Ryu for Endpoints News

Why non-opi­oid pain drugs keep fail­ing — and what's next for the field

In 1938, Rita Levi-Montalcini was forced to move her lab into her bedroom in Turin, as Mussolini’s facist government expelled Jewish people from studying or working in schools in Italy. Levi-Montalcini, then just a few years out of medical school and using sewing needles as scalpels in her makeshift lab, would soon discover nerve growth factor, or NGF, in chicken embryos.

Her discoveries formed the basis of our understanding of the peripheral nervous system and how cells talk to each other, and Levi-Montalcini went on to win the Nobel Prize in 1986. Much later, NGF was hailed as a promising target for new pain therapies, with some analysts quoting an $11 billion market. However, the latest anti-NGF candidate, Pfizer and Eli Lilly’s tanezumab, was rejected by the FDA last year because of a side effect that dissolved bone in some of its patients.

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Samantha Du, Zai Lab CEO

Any­one still look­ing for a CD47? Zai Lab shelves PhI pro­gram af­ter re­view­ing 'com­pet­i­tive land­scape'

Over the past few years, the promise of blocking CD47 — a “don’t eat me” signal co-opted by cancer cells — has sent drugmakers big and small into a frenzy. But one biotech is now bowing out.

Zai Lab is deprioritizing ZL-1201, its CD47 inhibitor, scrapping plans for a Phase II trial. It will now “pursue out-licensing opportunities,” the company said in its Q2 update. The decision was based on a review of the competitive landscape, it added, without going into further details.

Bernhardt Zeiher, outgoing Astellas CMO (Astellas)

Q&A: Astel­las' re­tir­ing head of de­vel­op­ment re­flects on gene ther­a­py deaths

For anyone who’s been following discussions about the safety alarms surrounding the adeno-associated viruses (AAV) commonly used to deliver gene therapy, Astellas should be a familiar name.

The Japanese pharma — which bought out Audentes Therapeutics near the end of 2019 and later built a gene therapy unit around the acquisition — rocked the field when it reported three patient deaths in a trial testing AT132, the lead program from Audentes designed to treat a rare muscle disease called X-linked myotubular myopathy (XLMTM).

When the company restarted the trial, it adjusted the dose and instituted a battery of other measures to try to prevent the same thing from happening again. But tragically, the first patient to receive the new regimen died just weeks after administration. The therapy remains under clinical hold, and just weeks ago, Astellas flagged another safety-related hold for a separate gene therapy candidate. In the process of investigating the deaths, the company has also taken flak about the way it disclosed information.

Big questions remain — questions that can have big implications about the future of AAV gene therapies.

Bernhardt Zeiher did not imagine any of it when he first joined Astellas as the therapeutic area leader in inflammation, immunology and infectious diseases. But his ascent to chief medical officer and head of development coincided almost exactly with Astellas’ big move into gene therapy, putting him often in the driver’s seat to grapple with the setbacks.

As Zeiher prepares to retire next month after a 12-year tenure — leaving the unfinished tasks to his successor, a seasoned cancer drug developer — he chatted with Endpoints News, in part, to discuss the effort to understand what happened, lessons learned and the criticism along the way.

The transcript has been lightly edited for length and clarity.

Endpoints: I want to also ask you a bit about the gene therapy efforts you’ve been working on. Astellas has really been at the forefront of discovering the safety concerns associated with AAV gene therapy. What’s that been like for you?

Zeiher: Well, I have to admit, it’s been a bit of a roller coaster. We acquired Audentes. Huge amount of enthusiasm. What we saw with AT132 — that was the lead program in XLMTM — was just remarkable efficacy. I mean, kids who went from being on ventilators, not able to eat for themselves, sit up, do things like that, to off ventilators, walking, you know, really — one investigator called it this Lazarus-like effect. It was just really dramatic efficacy. And then to have the safety events that occurred. So they actually occurred within that first year of the acquisition. So we had the three patient deaths. Me and my organization became very, very much involved. In fact, Ed Conner, who had been the chief medical officer, he left after some of the deaths, but I stepped in as the kind of acting chief medical officer, we had another chief medical officer who was involved, and then we had a fourth death, and I became acting again for a period of time.

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HHS Secretary Xavier Becerra (Patrick Semansky/AP Images)

US weighs new route of ad­min­is­tra­tion for mon­key­pox vac­cine as cas­es climb — re­port

Less than a week after HHS Secretary Xavier Becerra declared monkeypox a national health emergency, reports have emerged that the US plans to extend its vaccine supply by opting for a different route of administration.

Officials are expected to call for intradermal injection of Bavarian Nordic’s Jynneos vaccine — the only shot approved specifically for monkeypox in the US — as opposed to subcutaneous injection, unnamed sources told both the New York Times and Washington Post on Tuesday.