co-founder and chief executive officer of 54gene dr. Abasi Ene Obong has stepped down from its executive role, the African genomics company confirmed to australiabusinessblog.com today.
The three-year-old company has appointed General Counsel Teresia L. Bost as interim CEO. She is supported by the Chief Operating Officer Delali Attipu, the company said. Ene-Obong, on the other hand, will maintain his position on 54gene’s board of directors as he transitions into a new senior advisor role.
Ene-Obong’s resignation and Bost’s ascent come two months after 54gene laid off 95 employees, or more than 30% of the workforce, in August. The layoffs impacted workers, mainly contract workers (in labs and sales departments) who were recruited to work in the 54gene COVID business line launched in 2020 to complement its flagship product: an African genome biobank.
Founded in 2019 by Ene-Obong, 54gene is closing the gap in the global genomics market, where Africans make up less than 3% of the genetic material used in pharmaceutical research, despite being more genetically diverse than any other population then. The daring project has received more than $40 million from investors such as Adjuvant Capital, Y Combinator and Cathay AfricInvest Innovation Fund (CAIF) and partnered with organizations such as Illumina, Genentech and Parexel.
Biotech companies worldwide tend to make money in the long run; in fact, such companies can still be worth billions with little to no revenue. For Washington-based but Africa-focused 54gene, the primary revenue path is partnering with pharmaceutical companies to co-develop drugs and drugs — and that takes time. A typical time frame for a new drug from creation to market launch can take up to ten years, so it made sense for 54gene to leverage its lab capabilities for COVID testing as a new source of revenue.
However, the decline in COVID testing has presented 54gene with new challenges: declining revenues and redundant roles. While it has already let go of 95 employees, the company has confirmed it will make a second round of layoffs after restructuring several departments. According to the YC-backed company, it wants to focus its resources on its core mission of African genomics research and equalizing precision medicine. At the same time, the clinical diagnostic arm takes the back seat.
Here’s more information about the company’s new direction:
Moving forward, the primary focus will be on the unique genomic research the company has initiated by further leveraging its genomic datasets derived from 54gene’s state-of-the-art biobank, which currently houses over 130,000 unique patient samples and associated genomic data, all with the goal of positioning the company to contribute to precision medicine and drug discovery. This continues the meaningful work the company has invested in, while at the time it focused on the clinical diagnostics business line.
It is unclear exactly why Ene-Obong is stepping down. Still, it’s not far-fetched to assume that the company’s recent troubles are a contributing factor. Commenting on 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 CEO but will continue to support the company.” in its growth plans, such as strategic partnerships and fundraising. We can’t comment on what other new interests he may pursue, but we wish him well and still consider him an important team member.” Interestingly, the former CEO’s resignation also comes a month later. Ogochukwu Francis Osifothe company co-founder and VP, Engineering, left the company in September.
As 54gene enters a new phase, Ene-Obong, who has advised organizations like Gilead and IMS Health in the past, believes the startup is in the best of hands, as Bost and Attipoe “have a deep understanding of how 54gene works.” Bost brings more than 20 years of extensive 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, has more than 15 years of experience in the pharmaceutical sector and collaborates with companies such as Roche and Genentech.
Ene-Obong said in a statement regarding his departure and the transition:
I have always believed that the magnitude of genetic diversity in Africa and other highly diverse populations will materially influence our understanding of biology and lead to better medicines and interventions for the world’s population, and I am proud of what 54gene has achieved . I want to thank the 54gene board for their support over the years, and the many talented scientists and technology professionals I’ve had the privilege of working with during my time with the company. I will continue to support the business and scientific ecosystem, especially the African genomics ecosystem. Teresia and Delali have decades of experience building and scaling high-impact global pharmaceutical companies, and they also have a deep understanding of how 54gene works. I’m excited to see them take the business to the next stage.