54gene co-founder and CEO Dr. Abasi Ene-Obong has stepped down from his leadership role, the African genomics company confirmed to TechCrunch today.
The company, which was founded three years ago, has named General Counsel Teresia L. Bost as interim CEO. She will be assisted by Chief Operating Officer Delali Attipoe, the company said. Ene-Obong, meanwhile, will retain his position on 54gene’s board of directors while transitioning to a new role as senior advisor.
Ene-Obong’s resignation and Bost’s rise come two months after 54gene laid off 95 employees, more than 30% of its workforce, in August. The layoffs affected employees, mostly contract workers (in laboratories and commercial services) recruited to work in 54gene’s COVID business line launched in 2020 to complement its flagship product: an African genome biobank.
Founded in 2019 by Ene-Obong, 54gene fills the void in the global genomics market where Africans represent less than 3% of the genetic material used in pharmaceutical research, despite being more genetically diverse than any other population. . The bold project has received over $40 million from investors including Adjuvant Capital, Y Combinator and Cathay AfricInvest Innovation Fund (CAIF) and has partnered with organizations like Illumina, Genentech and Parexel.
Global biotechs tend to take a long-term approach to making money; in fact, these businesses can still be worth billions with little or no revenue. For Washington-based but Africa-focused 54gene, its main source of income is working with pharmaceutical companies to co-develop drugs and drugs — and that takes time. A typical timeframe for a new drug, from inception to market entry, can take up to a decade, so it made sense for 54gene to turn its lab capabilities into COVID testing as a new revenue stream.
However, the decline in COVID testing has presented 54gene with new challenges: declining revenue and redundant roles. Although it has already laid off 95 employees, the company has confirmed that it will carry out a second round of layoffs following a restructuring in several departments. According to the YC-backed company, it wants to focus its resources on its core mission of researching African genomics and equalizing precision medicine. At the same time, its clinical diagnostic arm is taking a back seat.
Here is more information about the new management of the company:
Going forward, the primary focus will be on the unique genomics research the company has begun by further leveraging its genomics datasets derived from 54gene’s state-of-the-art biobank, which 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 significant work the company has invested in, while emphasizing the clinical diagnostics business line at the time.
It is unclear exactly why Ene-Obong is stepping down. Still, it’s not a stretch to assume that the company’s recent struggles are a contributing factor. Additionally, when the company went through its first round of layoffs, allegations of financial impropriety were leveled against him and his executives among a group of employees. But such claims are unfounded, at least for now. Interestingly, the former CEO’s resignation also comes a month after Ogochukwu Francis Osifo, co-founder and vice president of engineering, left in September.
In response to the question whether the company’s decision to let him go was performance-related or because the ex-CEO was moving on to new projects, 54gene said only, “Abasi has decided to step down as as CEO but will continue to support the company in its future 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 member of the team.
As 54gene enters a new phase, Ene-Obong, who has consulted with organizations such as Gilead and IMS Health in the past, believes the startup is in good hands as Bost and Attipoe “have a deep understanding of how 54gene works. “. Bost has over 20 years of in-depth knowledge and experience in the pharmaceutical, biotechnology and healthcare sectors with companies such as Celgene and Quartet Health, while providing strategic support in securities, corporate governance and financial matters. Attipoe, on the other hand, brings more than 15 years of experience in the pharmaceutical sector working with companies like Roche and Genentech.
Ene-Obong, discussing his exit and transition in a statement, said:
I have always believed that the extent of genetic diversity in Africa and other very diverse populations will have a significant impact on our understanding of biology and lead to better medicines and interventions for the world’s population, and I am proud of what has been achieved at 54gene. I would like to thank the 54gene Board of Directors for their support over the years, as well as the many talented scientists and technology professionals I have had the pleasure of working with at the company. I will continue to support the business and the scientific ecosystem, in particular the African genomics ecosystem. Teresia and Delali bring decades of experience building and scaling high-impact global pharmaceutical companies, and they also have deep knowledge of how 54gene works. I am thrilled to see them lead the company into its next phase.
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