Genomics startup 54gene, which raised an impressive $45 million across three funding rounds to advance African genomics, is now winding down its operations, a shocking twist that has left the industry buzzing with questions. Here's a detailed look at the rise and fall of 54gene:
- Founded in 2019 by Dr. Abasi Ene-Obong, 54gene aimed to address the glaring disparity in global pharmaceutical research. Less than 3% of genetic material used in global pharmaceutical research originates from Africa, leaving a massive gap in genomic data.
- In a surprising turn of events, the company initiated its shutdown process in July 2023. By September, its website was offline, and its PR agency had severed ties with 54gene.
- 54gene has experienced a tumultuous year with three CEO changes, including Ron Chiarello, who took the helm in March 2023 but left in July.
- Chiarello confirmed that financial challenges led to the company's closure, but the fate of its valuable assets, including a biobank, remains uncertain.
- The company faces legal complications, with unpaid creditors and a lawsuit from its former legal counsel, Teresia Bost. Bost alleges discriminatory behavior and a hostile work environment.
- Dr. Abasi Ene-Obong's sudden departure in October 2022 added to the company's woes. His exit followed a fundraising round despite substantial revenue from COVID-19 testing and a $25 million funding round a year earlier.
Missteps in Diagnostics
- In 2021, 54gene ventured into diagnostics, creating Seven River Labs after its success with COVID testing. However, it encountered financial issues.
- The company's spending to launch Seven River Labs was criticized, and despite substantial investments, expected returns failed to materialize.
- By mid-2022, 54gene faced financial constraints, leading to salary cuts and layoffs.
- Industry observers fear that 54gene's failure may deter global investors from funding the sector.
- When a flagship company that has raised significant funds in a sector experiences a sudden downfall, it sends ripples of uncertainty through the industry.
The rise and fall of 54gene serve as a cautionary tale in the genomics and health tech sector, underlining the challenges and complexities of navigating a capital-intensive field with high expectations and fierce competition. 🧬💼
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