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.

Forge Bi­o­log­ics’ cGMP Com­pli­ant and Com­mer­cial­ly Vi­able Be­spoke Affin­i­ty Chro­matog­ra­phy Plat­form

Forge Biologics has developed a bespoke affinity chromatography platform approach that factors in unique vector combinations to streamline development timelines and assist our clients in efficiently entering the clinic. By leveraging our experience with natural and novel serotypes and transgene conformations, we are able to accelerate affinity chromatography development by nearly 3-fold. Many downstream purification models are serotype-dependent, demanding unique and time-consuming development strategies for each AAV gene therapy product1. With the increasing demand to propel AAV gene therapies to market, platform purification methods that support commercial-scale manufacturing of high-quality vectors with excellent safety and efficacy profiles are essential.

Mathai Mammen, FogPharma's next CEO

Math­ai Mam­men hands in J&J's R&D keys to lead Greg Ver­dine’s Fog­Phar­ma 

In the early 1990s, Mathai Mammen was a teaching assistant in Greg Verdine’s Science B46 course at Harvard. In June, the former R&D head at Johnson & Johnson will succeed Verdine as CEO, president and chair of FogPharma, the same month the seven-year-old biotech kickstarts its first clinical trial.

After leading R&D at one of the largest drugmakers in the world, taking the company through more than half a dozen drug approvals in the past few years, not to mention a Covid-19 vaccine race, Mammen departed J&J last month and will take the helm of a Cambridge, MA biotech attempting to go after what Verdine calls the “true emperor of all oncogenes” — beta-catenin.

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Cy­to­ki­net­ics’ ALS drug fails PhI­II, leav­ing the biotech with a sin­gle late-stage prospect

Cytokinetics’ candidate for the muscle disease amyotrophic lateral sclerosis, or ALS, failed a Phase III trial, the Bay Area biotech announced Friday morning.

At a second interim analysis of the trial, an independent review committee recommended that Cytokinetics discontinue its COURAGE-ALS trial for reldesemtiv, as it “found no evidence of effect” compared to placebo on the primary or key secondary endpoints.

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TScan Therapeutics' departing CEO David Southwell and CSO/COO Gavin MacBeath

TCR up­start an­nounces CEO ex­it, with CSO now act­ing re­place­ment

A public T cell biotech’s chief executive has decided to leave the company.

TScan Therapeutics said Friday morning that CEO David Southwell stepped down earlier this week, leaving both his chief executive and board member roles. Filling in is Gavin MacBeath, the company’s CSO and COO. He became the acting CEO on Tuesday, and will continue to remain CSO and COO, TScan’s announcement read.

Austin biotech Mol­e­c­u­lar Tem­plates lays off more than 100 staffers as pipeline nar­rows

Molecular Templates is ridding itself of a Phase I HER2 asset and fine-tuning its pipeline to focus on three programs and a preclinical Bristol Myers Squibb collaboration. With the narrowed scope on its so-called engineered toxin bodies, the Austin, TX biotech is laying off about half of its staff.

That’s a little more than 100 employees, per an SEC filing. Molecular’s layoffs, approved by its board Wednesday, add to the dozens of pullbacks in the industry in the first three months of 2023.

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Aptinyx eval­u­ates fu­ture of the com­pa­ny fol­low­ing two failed tri­als, 60% lay­offs

This year has been tough for Aptinyx — two failed trials, a 60% cut in its workforce, and now the company has brought on a firm to help evaluate the future of the company.

The press release noted it’s working with the firm Ladenburg Thalmann as its financial advisor to assist in exploring and evaluating “strategic alternatives” — a process that a growing group of struggling biotechs has embarked on, sometimes ending in a merger, asset sale or wind-down.

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Sar­to­rius to ac­quire French man­u­fac­tur­er for $2.6B+ in cell and gene ther­a­py play

The German life science group Sartorius will be picking up French contract manufacturer Polyplus for the price of €2.4 billion, or $2.6 billion.

On Friday, Sartorius announced the acquisition through its French subgroup, Sartorius Stedim Biotech, which will be acquiring Polyplus from private investors ARCHIMED and WP GG Holdings IV. Polyplus has 270 employees and produces materials and components that go into making viral vectors that are used in cell and gene therapies. This includes DNA/RNA reagents as well as plasmid DNA. Polyplus has locations in France, Belgium, China and the US.

Paul Stoffels, Galapagos CEO (Andrew Harnik/AP Images)

Gala­pa­gos sends some em­ploy­ees — and a re­search unit — off to drug dis­cov­ery CRO as part of re­org

Paul Stoffels has made it clear that he views cutting jobs at Galapagos as difficult but necessary — but he’s getting creative about it.

Galapagos, headquartered in Mechelen, Belgium, has struck an arrangement with French contract research organization NovAliX to transfer its drug discovery and research activities. While NovAliX is based in Strasbourg, it will take over running the site that Galapagos ran in Romainville, France.

CHMP gives thumbs-up for We­govy use in ado­les­cents, along with nine new drug rec­om­men­da­tions

The European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) recommended nine drugs for approval this week while also giving thumbs up for six expanded indications, including Novo Nordisk’s approved obesity medication Wegovy for younger people. Wegovy is already approved as an obesity treatment in the EU for adults, and the new indication would allow prescriptions for adolescents aged 12 and older.