In late April, FBI agents searched the company’s headquarters in an investigation allegedly into the comapny’s billing practices, according to the Wall Street Journal.
The Journal reported that an FBI spokeperson stated that, “I can confirm that special agents from the FBI San Francisco Division are present at 360 Langton Street in San Francisco conducting court-authorized law enforcement activity. Due to the ongoing nature of the investigation, I cannot provide any additional details at this time.”
The company has suspended its cofounders, Jessica Richman and Zak Apte. The company’s general counsel, John Rakow has been named as interim CEO has been named. In addition to the billing problems, Richman is also alleged to have lied about her age so that she could be included in articles showcasing young entrepreneurs.
The company advertised to consumers that the cost of the tests is covered by most health insurers as an out of network expense. But consumers complained via posts on the Better Business Bureau website that they had in fact been billed thousands of dollars for multiple tests when their insurers balked at covering the costs.
Sale of kits suspended
The company offers four kits. Two are sold through health care practitioners. They are called SmartGut, a kit to analyze fecal sample available in packs of six to see how the gut microbiome changes over time, and SmartJane, targeted for women to analyze vaginal flora, HPV, and STIs.
The company also offers a kit called Explorer, a direct to consumer microbiome kit that offers what the company calls “a wellness product that offers a broader view into your microbiome, providing more comprehensive information about your microbiome for wellness, using a patented combination of full metagenomic and marker-based sequencing.”
UBiome also adverstises a fourth product called SmartFlu, which purports to tell clinicians quickly which virus or bacteria may be related to symptoms of an upper respiratory tract infection via a nasal swab.
UBiome said it has suspended clinical activity in SmartGut and SmartJane, but is still offering its Explorer product, which is priced at $399 for a 4-test subscription. There was no word on the availability of the SmartFlu test.
Code of ethics published
The company has also published on its website a document called a Code of Conduct and Business Ethics, dated May 2019. The code covers relationships with consumers, competitors and regulatory and law enforcement agencies. The documnet includes a hotline for submitting complaints, which can be done anonymously.
The company claims to have six issued patents—and over 100 pending applications— that cover uBiome’s data, which has been cited in more than 20 peer-reviewed publications and presentations. It also claims its data has been used by researchers in more than 200 research institutions around the world, including the US Centers for Disease Control and the US National Institutes of Health.
In an internal e-mail obtained by CNBC the company said it is conducting its own internal investigation. It also emphasized that the suspension of the sale of the two test kits does not compromise its belief in their scientific validity or utility. A uBiome spokeswomen told tech site Gizmondo in an e-mail that “We are cooperating fully with federal authorities on this matter. We look forward to continuing to serve the needs of healthcare providers and patients.”
UBiome did not respond to a request for further comment for this article.