Startups, Diagnostics

uBiome appoints general counsel as interim CEO; founders placed on leave

The appointment of John Rakow follows a raid on the company's offices in San Francisco last week connected with an investigation into allegations it had been double billing insurers.

uBiome founder and CEO Jessica Richman

A company that performs genomic sequencing based on microbes in the gut has appointed an interim CEO as its two founders and co-CEOs have been placed on leave following a raid by the FBI.

San Francisco-based uBiome said Wednesday it had appointed its general counsel, John Rakow, as interim CEO, while placing Jessica Richman and Zac Apte on administrative leave.

The move follows a raid on the company’s offices last week by the FBI, originally reported last week by The Wall Street Journal. CNBC reported that federal agents had broken down the company’s door, while employees were asked to hand over their computers. The raid is related to scrutiny by federal authorities – as well as California state authorities – into the company’s billing practices. The company had allegedly been double billing health insurance companies, charging health plans twice for tests that used the same sample without notifying them, CNBC reported.

A call to uBiome’s offices by MedCity News on Monday seeking further information about the raid was not returned.

In its announcement Wednesday, the company said that there would be an independent investigation into its billing practices that a special committee of its board of directors would oversee. Rakow began working with uBiome in the fall of last year.

“As interim CEO of uBiome, I want all of our stakeholders to know that we intend to cooperate fully with government authorities and private payers 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,” Rakow said in a statement.

The firm, which was founded in 2012, performs genomic sequencing that incorporates gut microbiota, as well as artificial intelligence and machine learning. Its products include the SmartGut microbiome test, used to detect gut conditions such as inflammatory bowel disease, irritable bowel syndrome, Crohn’s disease and ulcerative colitis. Meanwhile, SmartJame genotypes human papillomavirus strains and can identify four common sexually transmitted infections and microbes associated with bacterial vaginosis and other conditions.

Photo: Steve Jennings, Getty Images

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