Oops—Layoffs of lab staff at uBiome force the company to halt sample testing: reports

A white box with the SmartGut sample collection kit in it
uBiome previously halted its physician-ordered tests, focused on the gut and women’s health, earlier this year after the FBI raided its headquarters as part of snowballing investigations into the company’s billing practices. (Image: uBiome)

A fresh round of layoffs at the struggling and scrutinized uBiome has left the at-home sequencing test provider without a lab director and other key staff—and with them, its ability to provide an at-home sequencing test.

The San Francisco-based company has put sample testing on hiatus after axing half of its employees at its California and Latin America locations earlier this week, according to a report from Business Insider. The indefinite pause affects uBiome’s sole remaining offering—its direct-to-consumer Explorer test, which examines gut microbiome bacteria to provide information on wellness, food and lifestyle choices.

uBiome previously halted its physician-ordered tests, focused on the gut and women’s health, earlier this year after the FBI raided its headquarters as part of snowballing investigations into the company’s billing practices. As of this writing, the Explorer test kit is still available for purchase through uBiome’s website, at prices ranging from $89 to $399.

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According to Business Insider, the company let go 114 of its 229 staff this week, just days after new management were brought in by the board of directors following the departure of its interim CEO. The cuts were described as mostly mid-level personnel in medical affairs, lab operations, finance and other departments, including Chief Operating Officer Nathaniel Walton and Lab Director Susan Zneimer.

RELATED: CEOs of uBiome take administrative leave following FBI raid

uBiome’s pair of founders and co-CEOs, Jessica Richman and Zac Apte, were placed on administrative leave in early May following the FBI’s search of its headquarters, where officers confiscated computers and other materials. The raid serves as a milestone in the ongoing probes by law enforcement agencies, state regulators and insurance companies into uBiome’s potential financial connections to doctors ordering its tests, according to reports.

RELATED: Turmoil persists at uBiome with new management overhaul amid FBI probe

Two months later, interim CEO and General Counsel John Rakow announced his departure from the company, and Richman and Apte resigned from the board of directors.

To fill the company’s C-suite in the interim, the board tapped three directors from the consulting firm Goldin Associates, which had been brought on to review the company’s operations following the FBI raid. They include CEO Curtis Solsvig, CFO Robin Chiu and COO Karthik Bhavaraju.

uBiome had previously raised $83 million from investors, including OS Fund, Y Combinator and others, with promises to begin the development of microbiome-focused therapeutics at a new Cambridge, Massachusetts location. Previous layoffs at the company included the loss of at least 50 of its 300 employees in January, according to a report from CNBC, as the company began its planned transition into a drug developer.

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