Another Shakeup at uBiome: Interim CEO Quits
Two months after taking over as interim chief executive officer of Bay Area-based uBiome, John Rakow is stepping down from the company that has been under scrutiny from the Federal Bureau of Investigation (FBI).
First reported by the Wall Street Journal, uBiome informed investors of Rakow’s decision to resign from his post in a letter over the weekend. In April, uBiome became the subject of an FBI investigation over allegations of illegal billing practices. The FBI raided the offices of uBiome following intense scrutiny of the lab-testing company’s billings involving Medicare. After the FBI raid, the company’s co-founders and co-chief executive officers were placed on administrative leave and Rakow, who had been serving as general counsel, was placed at the helm. In its report this morning, the Journal said that not only had Rakow stepped down from the company, but the co-founders and former co-CEOs Jessica Richman and Zac Apte resigned their positions from the company board of directors.
Now the beleaguered company is turning to the consulting firm Goldin Associates for its next spate of leaders. Goldin is the consulting firm managing an internal probe of the company’s billing practices. The Journal reported that three members of that company’s team will take on the leadership at the Bay Area company. Curtis Solsvig will serve as interim CEO, Robin Chiu will serve as interim CFO and Karthik Bhavaraju will serve as interim COO, the Journal reported, citing the letter sent to shareholders.
When Rakow took over as interim CEO in May, he told shareholders that uBiome leadership will cooperate with the FBI investigation, as well as an investigation by the California Department of Insurance into the billing practices. At the time, Rakow said he wanted to ensure that the allegations against the company are fully resolved and noted that uBiome is ready to take any corrective actions needed. Reasons why Rakow abruptly stepped down from his position at uBiome were not disclosed.
Founded in 2012, uBiome uses advanced technology to analyze the microbiomes on the human body. The company has four primary consumer products, SmartGut, SmartJane, Explorer and Explorer Plus. Explorer is a consumer product that helps people understand the role that food and lifestyle can play in gut wellness. SmartGut is a stool test that identifies microbes in the gut for patients with chronic gut conditions such as IBD, IBS, Crohn’s Disease and ulcerative colitis. SmartJane is a women’s health test that genotypes all 19 clinically relevant strains of HPV, identifies four common sexually transmitted diseases (chlamydia, gonorrhea, syphilis, and mycoplasma genitalium), and surveys more than 20 vaginal microbes associated with bacterial vaginosis and other conditions.
Earlier this year, uBiome was named one of the top five companies to emerge from incubators in the Bay Area. The company came out of StartX, Y Combination and 500 Startups. As of January, it had raised more than $109 million to support its technology. Last year alone, the company raised $83 million in Series C financing.
Little has been disclosed about the FBI investigation and the company’s billing practices, particularly as they related to Medicare. Billing government plans for tests that are not deemed medically necessary may violate federal laws. There have also been complaints that physicians in California were ordering uBiome tests for patients without prior consultation.