After raising $45 million in investment, genomics company 54gene has begun to wind down its activities.
In July 2023, the corporation began the process. By September, its website had become inaccessible, and the public relations firm that had represented the company for the most of its existence had distanced itself from 54gene.
Dr. Abasi Ene-Obong, a major factor in acquiring $45 million for the company through three fundraising rounds, co-founded 54Gene in 2019. According to TechCabal, the company’s purpose was to provide vital genomic data specific to African populations in order to improve the drug discovery methods of worldwide pharmaceutical businesses.
With Africa accounting for less than 3% of genetic material utilized in global pharmaceutical research, 54gene aimed to close this huge gap in the global genomics market.
However, in less than four years since its start, the corporation has fallen into disorder, prompting the CEO, Ene-Obong, to be replaced. The CEO position of 54Gene has changed three times in the last year, with Ron Chiarello taking over in March 2023 but leaving in July.
“Unfortunately, the company could not continue to operate financially, and it began to wind down in July,” Chiarello stated. This marks the first official confirmation regarding the closure of 54Gene from anyone affiliated with the company.
As part of its closure, 54Gene is aggressively looking for buyers for its assets, which include a biobank with significant biological samples for study. Although firm insiders believe these assets are valuable, the sale process remains uncertain and hindered by unresolved legal concerns and unpaid creditors.
However, legal concerns will complicate the company’s collapse, as some creditors are still owed money. Teresia Bost, 54gene’s former legal counsel and one-time interim CEO, filed a lawsuit against the corporation for “discriminatory behavior and creating a hostile work environment.”
In the midst of these developments, industry analysts are raising worries about the potential impact of 54Gene’s fall on the genomics and health tech sectors.
The abrupt demise of a large health-tech firm like 54Gene, which had successfully raised substantial money, may prevent worldwide investors from joining in similar initiatives, casting a cloud of doubt over a field that had previously held promise.
Abasi Ene-Obongn, the former co-founder and CEO of 54gene, just started Syndicate Bio, another genomics firm. Ene-Obong resigned from his position at 54gene after being accused of financial wrongdoing by staff.
