February 18, 2016
By Alex Keown, BioSpace.com Breaking News Staff
NEW ORLEANS -- The once promising Renaissance RX, a personalized medicine firm specializing in genetic testing, is facing allegations of fraud in an employee lawsuit, the Advocate of Louisiana reported Wednesday.
Alison Diboll, who relocated to New Orleans from California to take a marketing position with Renaissance, filed a lawsuit Feb. 17 in Orleans Parish Civil District Court that alleges Renaissance promised her a competitive salary and other business perks, but never delivered. Instead, the company “fraudulently enticed Ms. Diboll into accepting their offer, breached their agreement with her, caused her to detrimentally rely on their promises and ultimately intentionally inflicted emotional distress on her,” her lawsuit said, according to the Advocate. In her complaint, Diboll said Renaissance executives delayed formalizing her contract until the company closed a $55 million investment deal with TPG Growth. When that investment was completed, Diboll said Renaissance opted to terminate her employment. No reason for the termination was provided in the Advocate article. Diboll was denied severance after her termination, according to the lawsuit.
The lawsuit names Tarun Jolly, the founder and chief executive officer of Renaissance, as well as executives Barry Griffith and Patrick Ridgeway. Diboll’s lawsuit accuses Renaissance of fraudulent inducement, breach of oral contract, intentional infliction of emotional distress and unjust enrichment, among other allegations, the Advocate said. She is seeking financial reparations.
It was shortly after that $55 million deal, which included TPG gaining a stake in the company, that financial woes hit Renaissance. In February 2015, just months after announcing an expansion, Renaissance turned around and cut staff after government funding was pulled from a Medicare study of 250,000 patients. The study would have created a database to track how patients react to various medications, mirroring a similar proposal by the National Institute of Health to track more than 1 million patients. However, after the government terminated the study, that slashed the company’s revenue stream. Medicare had committed to paying Renaissance as much as $600 for every patient participating, the Advocate said. The Medicare review came following a 2014 restructuring of the company.
In April 2015, a Rhode Island doctor filed a lawsuit against Renaissance, alleging the company funneled fraudulent and illegal Medicare tests through his office without his knowledge, the Louisiana Record reported. Dr. Scott Wilson said he initially agreed to participate in Renaissance’s testing, but ended his relationship with the company after about 30 tests. According to the Record, Wilson said his signature was “fraudulently attached to the forms of thousands of patients who were enrolled in the study and the resulting tests conducted on them that were worth an estimated $10 million to Renaissance Rx.” Even after terminating his relationship with the company, Wilson said Renaissance continued to use his name in promotional materials for at least eight months after their partnership ended.
In addition to its funding woes, former Renaissance interim CEO, David Guzan, filed a civil suit in January 2015 alleging he is owed more than $1 million in compensation, including unpaid wages, management fees, ownership interests in companies and damages, according to the Advocate.
