In the days following an FBI raid of its headquarters, uBiome’s board of directors has moved to replace its pair of co-CEOs with its top lawyer, for the time being.
The sequencing test provider’s general counsel, John Rakow, will serve as interim CEO, while uBiome founders Jessica Richman and Zac Apte take administrative leave, the board said in a statement.
In addition, a special committee of the board will launch its own investigation into the company’s billing practices—joining federal and state scrutiny as well as inquiries from insurance companies.
“As interim CEO of uBiome, I want all of our stakeholders to know that 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,” said Rakow, who first joined the company last October.
The probes—thrown into the spotlight when the FBI showed up to confiscate computers at uBiome’s San Francisco offices last week—center on the company’s possible financial connections with physicians tasked with ordering its suite of microbiome-focused panels, as well as whether insurers have been double-billed or overcharged for tests.
A number of large insurers—including Anthem, Aetna and Regence BlueCross BlueShield—have been looking into the uBiome’s practices alongside the California Department of Insurance, according to The Wall Street Journal, which first reported the FBI raid.
The test provider’s at-home offerings include assessments of gut bacteria wellness, chronic gastrointestinal and bowel conditions, upper respiratory infections, women’s health and sexually transmitted infections.
The company raised $83 million in a funding round late last year—from OS Fund, Y Combinator and others—to support its first steps into developing its own therapeutics, while signing on former Novartis CEO Joe Jimenez to its board of directors.