Genomics startup 54Gene has commenced the process of winding down its operations following the acquisition of $45 million in funding. This process was initiated in July 2023, and by September, the company's website had become inaccessible. Additionally, the public relations agency, which had long represented the company, disassociated itself from 54Gene.
Established in 2019, 54Gene was co-founded by Dr. Abasi Ene-Obong, a key figure responsible for securing $45 million in funding through three rounds. The company's mission was to provide crucial genomic data specific to African populations with the aim of enhancing drug discovery processes for international pharmaceutical firms, as reported by TechCabal.
With less than 3% of genetic material used in global pharmaceutical research originating from Africa, 54Gene aimed to bridge this significant gap in the global genomics market. However, in less than four years since its inception, the company faced internal turmoil, resulting in the replacement of CEO Ene-Obong. Over the past year, 54Gene saw three changes in its CEO position, with Ron Chiarello assuming the role in March 2023 but departing in July.
"Unfortunately, the company could not sustain its operations financially, and it began the winding-down process in July," stated Chiarello, marking the first official confirmation of 54Gene's closure from a company insider.
As part of its shutdown, 54Gene is actively seeking buyers to acquire its assets, including a biobank containing invaluable biological samples for research. While these assets are highly regarded by those within the company, the progress of the sale process is complicated by ongoing legal issues and unpaid creditors.
Legal challenges are expected to further complicate the company's closure, as several creditors claim to have outstanding debts. Teresia Bost, the former legal counsel and one-time interim CEO of the company, filed a lawsuit against 54Gene, alleging "discriminatory behavior and a hostile work environment."
In the midst of these developments, industry experts express concerns about the potential repercussions of 54Gene's downfall on the genomics and health tech sector. The abrupt collapse of a prominent health tech player like 54Gene, which had successfully attracted substantial funding, may deter global investors from engaging in similar ventures, casting a shadow of uncertainty over a sector that once held great promise.
It is worth noting that Abasi Ene-Obong, the former co-founder and CEO of 54Gene, has recently launched Syndicate Bio, another genomics company. Ene-Obong stepped down from his role at 54Gene amid allegations of financial impropriety made by employees.