54gene co-founder and chief executive officer Dr. Abasi Ene-Obong has stepped down from his executive role, the African genomics company confirmed to TechCrunch today.
The three-year-old company has appointed General Counsel Teresia L. Bost as interim CEO. She will be supported by Chief Operating Officer Delali Attipoe, the company said. Ene-Obong, on the other hand, will retain his position on 54gene’s board while moving to a new role of senior advisor.
Ene-Obong’s resignation and Bost’s ascension comes two months after 54gene laid off 95 employees, or more than 30% of its workforce, in August. The layoffs affected employees, mostly contract staff (in labs and sales departments) recruited to work in 54gene’s COVID business line launched in 2020 to complement its flagship product: a biobank of the African genome.
Founded in 2019 by Ene-Obong, 54gene addresses the gap in the global genomics market where Africans make up less than 3% of genetic material used in pharmaceutical research despite being more genetically diverse than any other population. The audacious project has received over $40 million from investors such as Adjuvant Capital, Y Combinator and Cathay AfricInvest Innovation Fund (CAIF) and partnered with organizations like Illumina, Genentech and Parexel.
Biotechs globally tend to have a long-term approach toward making money; in fact, such companies can still be worth billions with little to no revenue. For the Washington-based but Africa-focused 54gene, its primary revenue path involves working with pharmaceutical companies to co-develop drugs and medicine–and that takes time. A typical time frame for a new drug from creation to market entry can take up to a decade, so it made sense for 54gene to turn its lab capabilities to COVID testing as a new source of revenue.
However, the decline in COVID testing has presented 54gene with fresh challenges: dwindling revenues and redundant roles. Though it has already let go of 95 employees, the company confirmed that it will conduct a second round of layoffs following restructuring across several departments. According to the YC-backed company, it wants to focus resources on its core mission of African genomics research and equalizing precision medicine. At the same time, its clinical diagnostic arm takes the back seat.
Here’s more information on the company’s new direction:
Going forward, the primary focus will be on the unique genomic research the company has started by further leveraging its genomic datasets derived from 54gene’s state-of-the-art biobank, that currently houses over 130,000 unique patient samples and corresponding genomic data, all with the objective of positioning the company to make contributions to precision medicine and drug discovery. This continues the meaningful work the company has invested in, whilst de-emphasizing the clinical diagnostic business line at the time.
It’s unclear exactly why Ene-Obong is stepping down. Yet, it’s not farfetched to assume that the company’s recent struggles are a contributing factor. Also, when the company carried out its first round of layoffs, allegations of financial impropriety were leveled against him and his executives from a group of employees. But such claims are unfounded, at least for now. Interestingly, the former CEO’s resignation also comes one month after Ogochukwu Francis Osifo, the company’s co-founder and VP, Engineering, left the company in September.
In response to whether the company’s decision to let him go was performance-related or because the ex-CEO was moving on to new projects, 54gene only said, “Abasi has decided to step down as the CEO but will continue to support the company in its go-forward plans such as strategic partnerships and fundraising. We cannot comment on what other new interests he will pursue if any, but we wish him well and still consider him a key team member.”.
As 54gene shifts into a new phase, Ene-Obong, who consulted for organizations such as Gilead and IMS Health in the past, believes the startup is in the best hands as Bost and Attipoe “have deep insight into the workings of 54gene.” Bost boasts more than 20 years of extensive knowledge and experience across pharmaceutical, biotechnology and healthcare industries with companies such as Celgene and Quartet Health while providing strategic support of securities matters, corporate governance and finance matters. Attipoe, on the other hand, brings more than 15 years of experience in the pharmaceutical sector working with firms like Roche and Genentech.
Ene-Obong, addressing his exit and the transition in a statement, said:
I have always believed that the scale of genetic diversity in Africa and other highly diverse populations will materially impact our understanding of biology and lead to better medicines and interventions for the global population, and I am proud of what has been achieved at 54gene. I’d like to thank the 54gene Board for their support over the years, and the many talented scientists and technology professionals I have had the pleasure to work with during my time at the company. I will continue to support the company and the scientific ecosystem, particularly the African genomics ecosystem. Teresia and Delali bring decades of experience in building and scaling high-impact global pharma companies, and they also have deep insight into the workings of 54gene. I am excited to see them take the company to its next phase.
54gene CEO steps down as the company looks to cut more jobs by Tage Kene-Okafor originally published on TechCrunch
