The genomics startup 54gene has started to wind down operations, TechCabal reported on Wednesday.
The startup began the procedure in July 2023. Its website had been taken down by September, and the PR firm that had long served as its representative informed TechCabal that they were no longer employed by 54gene. This statement follows unverified rumours about the company’s closedown.
Co-founded by Dr. Abasi Ene-Obong in 2019, and helped 54gene secure $45 million over three fundraising rounds, the company’s goal was to help international pharmaceutical companies find better drugs by supplying them with critical genetic data on Africans.
“Less than 3% of genetic material used in global pharmaceutical research is from Africa…54gene has been at the forefront of bridging this divide in the global genomics market.” TechCrunch stated at the time.
However, less than four years after it was founded, the company went into disarray, and Ene-Obong resigned as CEO. Three CEOs have changed at 54gene in the past year, including Ron Chiarello, who was appointed in March 2023. Chiarello quit the position in July.
According to TechCabal, 54gene is looking for buyers to take over its assets, including the company’s biobank—a collection of biological samples that could be especially useful for research. While company sources believe these assets are valuable, it is unclear how far along they are with the sale process.
However, despite accusations that a number of creditors have not yet been paid, legal concerns will make closing the business more difficult. Former legal advisor for the business and former temporary CEO Teresia Bost filed a lawsuit against 54gene for “discriminatory behaviour and creating a hostile work environment.”
Following the abrupt departure of Dr. Abasi Ene-Obong in October 2022, Bost was appointed CEO.
Due to its success with COVID testing, 54gene expanded into diagnostics in 2021 and founded Seven River Labs. 7RiverLabs sample collection stations are already operational in Lagos, Abuja, Kano, and Port Harcourt, according to a 2021 Technext story. These collection facilities employ over 100 people. The expected returns did not materialise despite all of the investment in diagnostics.
Midway through 2022, the company ran out of cash and started implementing layoffs and salary cuts after initial attempts to secure new external finance failed. Although many accounts of what happened exist, it is evident that the organisation struggled to stay on course with its objective and that internal conflict could not be settled.
