Marc Harris, a 50-year-old man living in South Carolina, began to be "attacked" by ads of a startup called uBiome from last year. Mr. Harris has a rare gastrointestinal disorder and regularly learns about his illness on the internet. Therefore it is understandable when companies like uBiome come to him.
uBiome was founded in 2012, in a US $ 350,000 call campaign on Kickstarter. For the purpose of helping people do their own stool tests at home, they just need to send a sample of the product and the company will send the analysis results back to their intestinal bacteria, called microbiome. This can help patients understand the problem they are having.
However, it seems that Harris is not one of the lucky ones. He tried to participate in the test of uBiome, according to online advertising, in the hope that it could improve his gastrointestinal disease.
Harris thinks he will be called to a laboratory to participate in the testing process. But instead, uBiome sent a 6-item package to Harris to sample his own stool and return it. Besides, uBiome also sent an email to note that they will follow Harris microbiome over time.
After that, uBiome continued to send emails to remind Mr. Harris to return the samples. In the end, he sent two samples, but uBiome asked to send 6 samples of the item and he did not finish. As a result, uBiome doctors did not give the final result, Harris did not improve his condition.
Over the next few days, Harris was surprised to receive a bill for his tests, which cost up to $ 2,970 for a test of uBiome. And that's the way for a medical startup like uBiome to achieve rapid growth.
Stool test startups are priced at $ 600 million
uBiome was founded in 2012 by Jessica Richman and Zac Apte, a computer scientist and a biologist. The two founders have called for investment on Kickstarter site to get research money, with the aim of marketing a new type of test to explore the link between human health and microbiome – a collection of microbes. living in the intestine.
Two co-founders Zac Apte and Jessica Richman.
The startup then raised $ 100 million in investments by 8VC and Y Combinator, valued at up to $ 600 million last September. uBiome regularly uses the data as the number of samples sent back instead of the test results returned to the patient, as a measure of growth.
An employee of the company said, uBiome's growth strategy is to continuously invite patients (like Harris) to send samples of their products and charge insurance bills on each test.
uBiome also puts pressure on its doctors to approve testing of all samples sent back. According to the report, 100% of samples were approved, while there were many conditions for a patient to participate in this test of uBiome.
Even for patients who have no symptoms, their records are still approved for testing. According to internal sources, at least one uBiome doctor was dismissed and replaced, because he did not approve tests quickly enough.
According to Staff Care, a unit that introduces doctors who work for uBiome since 2017, doctors here are paid 180 USD per hour just to approve the tests. Many other doctors say, if you don't have any symptoms, proposing a $ 3,000 test is immoral.
The FBI entered the investigation, the founder and the board of directors were missing
The continuous billing of uBiome's expensive tests made insurance companies notice. By last April, the FBI had to go to the investigation. FBI agents searched uBiome's office and seized dozens of documents.
Not long ago, co-founders Jessica Richman and Zac Apte (CEO) took a break. As soon as the FBI investigated, uBiome announced that the two had resigned from the company's board of directors and did not know where they were. John Rakow, the company's general adviser, took on the role of temporary CEO.
FBI into uBiome investigation.
uBiome currently declined to comment, in addition to saying it would set up a council to investigate previous payment activities. The story of uBiome startup reminds us of another fraudulent example, which is Theranos with blood tests and is valued at more than 9 billion USD.
Theranos was once thought to create a revolution in blood testing, this startup claims to have created a new technology that can test quickly to diagnose only 1-2 drops of blood from the tip patient's hand. The founder Elizabeth Holmes was then likened to the female Steve Jobs.
Things began to collapse in October 2015 when the Wall Street Journal had a series of revelations about the fraudulent activity of Theranos. The investigative journalist of the newspaper found that Theranos's blood test device was unreliable and the company only used the device to spend a fraction of the 240 tests that it offered its customers. . All other tests are performed by blood test equipment purchased from other manufacturers.
Reference: forbes, cnbc