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.

ZS Per­spec­tive: 3 Pre­dic­tions on the Fu­ture of Cell & Gene Ther­a­pies

The field of cell and gene therapies (C&GTs) has seen a renaissance, with first generation commercial therapies such as Kymriah, Yescarta, and Luxturna laying the groundwork for an incoming wave of potentially transformative C&GTs that aim to address diverse disease areas. With this renaissance comes several potential opportunities, of which we discuss three predictions below.

Allogenic Natural Killer (NK) Cells have the potential to displace current Cell Therapies in oncology if proven durable.

Despite being early in development, Allogenic NKs are proving to be an attractive new treatment paradigm in oncology. The question of durability of response with allogenic therapies is still an unknown. Fate Therapeutics’ recent phase 1 data for FT516 showed relatively quicker relapses vs already approved autologous CAR-Ts. However, other manufacturers, like Allogene for their allogenic CAR-T therapy ALLO-501A, are exploring novel lymphodepletion approaches to improve persistence of allogenic cells. Nevertheless, allogenic NKs demonstrate a strong value proposition relative to their T cell counterparts due to comparable response rates (so far) combined with the added advantage of a significantly safer AE profile. Specifically, little to no risk of graft versus host disease (GvHD), cytotoxic release syndrome (CRS), and neurotoxicity (NT) have been seen so far with allogenic NK cells (Fig. 1). In addition, being able to harness an allogenic cell source gives way to operational advantages as “off-the-shelf” products provide improved turnaround time (TAT), scalability, and potentially reduced cost. NKs are currently in development for a variety of overlapping hematological indications with chimeric antigen receptor T cells (CAR-Ts) today, and the question remains to what extent they will disrupt the current cell therapy landscape. Click for more details.

Lat­est news on Pfiz­er's $3B+ JAK1 win; Pacts over M&A at #JPM22; 2021 by the num­bers; Bio­gen's Aduhelm reck­on­ing; The sto­ry of sotro­vimab; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

For those of you who attended #JPM22 in any shape or form, we hope you had a fruitful time. Regardless of how you spent the past hectic week, may your weekend be just what you need it to be.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 128,900+ biopharma pros reading Endpoints daily — and it's free.

A $3B+ peak sales win? Pfiz­er thinks so, as FDA of­fers a tardy green light to its JAK1 drug abroc­i­tinib

Back in the fall of 2020, newly crowned Pfizer chief Albert Bourla confidently put their JAK1 inhibitor abrocitinib at the top of the list of blockbuster drugs in the late-stage pipeline with a $3 billion-plus peak sales estimate.

Since then it’s been subjected to serious criticism for the safety warnings associated with the class, held back by a cautious FDA and questioned when researchers rolled out a top-line boast that their heavyweight contender had beaten the champ in the field of atopic dermatitis — Dupixent — in a head-to-head study.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 128,900+ biopharma pros reading Endpoints daily — and it's free.

Robert Califf, FDA commissioner nominee (Graeme Sloan/Sipa USA/Sipa via AP Images)

Rob Califf ad­vances as Biden's FDA nom­i­nee, with a close com­mit­tee vote

Rob Califf’s second confirmation process as FDA commissioner is already much more difficult than his near unanimous confirmation under the Obama administration.

The Senate Health Committee on Thursday voted 13-8 in favor of advancing Califf’s nomination to a full Senate vote. Several Democrats voted against Califf, including Sen. Bernie Sanders and Sen. Maggie Hassan. Several other Democrats who aren’t on the committee, like West Virginia’s Joe Manchin and Ed Markey of Massachusetts, also said Thursday that they would not vote for Califf. Markey, Hassan and Manchin all previously expressed reservations about the prospect of Janet Woodcock as an FDA commissioner nominee too.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 128,900+ biopharma pros reading Endpoints daily — and it's free.

Michel Vounatsos, Biogen CEO (World Economic Forum/Ciaran McCrickard)

Bio­gen vows to fight CM­S' draft cov­er­age de­ci­sion for Aduhelm be­fore April fi­nal­iza­tion

Biogen executives made clear in an investor call Thursday they are not preparing to run a new CMS-approved clinical trial for their controversial Alzheimer’s drug anytime soon.

As requested in a draft national coverage decision from CMS earlier this week, Biogen and other anti-amyloid drugs will need to show “a meaningful improvement in health outcomes” for Alzheimer’s patients in a randomized, placebo-controlled trial to get paid for their drugs, rather than just the reduction in amyloid plaques that won Aduhelm its accelerated approval in June.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 128,900+ biopharma pros reading Endpoints daily — and it's free.

CRO own­er pleads guilty to ob­struct­ing FDA in­ves­ti­ga­tion in­to fal­si­fied clin­i­cal tri­al da­ta

The co-owner of a Florida-based clinical research site pleaded guilty to lying to an FDA investigator during a 2017 inspection, revealing that she falsely portrayed part of a GlaxoSmithKline pediatric asthma study as legitimate, when in fact she knew that certain data had been falsified, the Department of Justice said Wednesday.

Three other employees — Yvelice Villaman Bencosme, Lisett Raventos and Maytee Lledo — previously pleaded guilty and were sentenced in connection with falsifying data associated with the trial at the CRO Unlimited Medical Research.

Susan Galbraith, AstraZeneca EVP, Oncology R&D

Can­cer pow­er­house As­traZeneca rolls the dice on a $75M cash bet on a buzzy up­start in the on­col­o­gy field

After establishing itself in the front ranks of cancer drug developers and marketers, AstraZeneca is putting its scientific shoulder — and a significant amount of cash — behind the wheel of a brash new upstart in the biotech world.

The pharma giant trumpeted news this morning that it is handing over $75 million upfront to ally itself with Scorpion Therapeutics, one of those biotechs that was newly birthed by some top scientific, venture and executive talent and bequeathed with a fortune by way of a bankroll to advance an only hazily explained drug platform. And they are still very much in the discovery and preclinical phase.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 128,900+ biopharma pros reading Endpoints daily — and it's free.

‘Skin­ny la­bels’ on gener­ics can save pa­tients mon­ey, re­search shows, but re­cent court de­ci­sions cloud fu­ture

New research shows how generic drug companies can successfully market a limited number of approved indications for a brand name drug, prior to coming to market for all of the indications. But several recent court decisions have created a layer of uncertainty around these so-called “skinny” labels.

While courts have generally allowed generic manufacturers to use their statutorily permitted skinny-label approvals, last summer, a federal circuit court found that Teva Pharmaceuticals was liable for inducing prescribers and patients to infringe GlaxoSmithKline’s patents through advertising and marketing practices that suggested Teva’s generic, with its skinny label, could be employed for the patented uses.

A patient in Alaska receiving an antibody infusion to prevent Covid hospitalizations in September. All but one of these treatments has been rendered useless by Omicron (Rick Bowmer/AP Images)

How a tiny Swiss lab and two old blood sam­ples cre­at­ed one of the on­ly ef­fec­tive drugs against Omi­cron (and why we have so lit­tle of it)

Exactly a decade before a novel coronavirus broke out in Wuhan, Davide Corti — a newly-minted immunologist with frameless glasses and a quick laugh — walked into a cramped lab on the top floor of an office building two hours outside Zurich. He had only enough money for two technicians and the ceiling was so low in parts that short stature was a job requirement, but Corti believed it’d be enough to test an idea he thought could change medicine.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.