When news broke on Monday that former CEO and Co-founder of 54Gene, Dr Abasi Ene-Obong has stepped down from his role, there have been speculations as to the reason he is leaving the company he co-founded and has led for 4 years, given the startup’s recent and alarming troubles.
But, nothing seemed sure.
In a follow-up email with this reporter, the former CEO’s reps all but confirmed that the development was due to the company’s present struggles which it needed to “get through”.
Asked if the board has lost faith in his abilities to lead the company out of its present challenges, Dr Ene-Abasi, while describing it as a “difficult decision”, replied that the company is currently undergoing a transition which would be better served if he stepped down as its chief executive.
“As the Founder, I have invested my life in building the company over the past four years. It was a difficult decision, But the company is at a pivotal transition and new leadership will help the company get through this,” he said.
The former CEO has been reduced to a senior advisory role within the health technology company after being replaced by Teresia Bost, a legal practitioner.
While that might seem like an office of some consequence, Dr Ene-Abasi’s comment on his resignation sounded like a man saying a rather early and really sad goodbye to the company he has built and nurtured, and possibly didn’t expect to stop leading so soon.
More importantly, it more or less expressed that he was leaving, rather than still serving. As reported by Techcrunch, the co-founder was quoted to have said:
“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.”
An important question, however, remains; why is 54Gene, a very specialised health technology company, now being led by a general counsel, who is a Doctor of Law?
Staff layoff, lab shutdown and more layoffs
The CEO’s resignation is coming just 2 months after the genomics company laid off 95 employees, representing about 30% of its workforce. It also comes barely a month after its co-founder and Vice President of Engineering, Ogochukwu Osifo announced his exit from the company. But why?
Africans are more genetically diverse than any other population around the world. Yet, they make up less than 3% of genetic material used in pharmaceutical research for the production of drugs and medicines, vaccines, etc. This huge differential in the global genomics market 54Gene is trying to bridge. While this is quite revolutionary, it also comes with its own challenges.
First is the problem of scaling and bringing in revenue. According to Techcrunch, companies like this, especially one focused on Africa, take a very long to start making considerable revenue.
And, with more than $45 million in investor revenue, you can expect that the company doesn’t have a very long time. Thus, it made sense that during the Covid-19 pandemic, the company ventured into Covid-19 testing to make money and employed more hands to help.
With the worst of the pandemic over, it is only reasonable to shut down that business and let the employees working there leave.
Indeed, Techcrunch noted that 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. There are also reports that the company has shut down its diagnostic lab, the 7RiversLab barely a year after its launch.
It was a very smart business while it lasted, and smarter still that the company drew the curtain on it.
More questions about 54Gene
Thus, as many analysts agree, it is hardly a reason to force a change of guard at the top. It, however, gets interesting with reports that the company is further looking to carry out another round of layoffs as it looks to restructure across several departments and refocus its resources on its core mission of African genomics research.
For a company that raised $25m in Series B funding just over a year ago, it is almost befuddling that the company would be looking to downsize across its departments. More so since the core purpose of that funding was to expand its capabilities in sequencing, target identification and validation, and for precision medicine clinical trials enabling drug discovery in Africa.
To buttress this focus, part of that last funding was channelled into hiring new senior team members like Peter Fekkes of Novartis of FogPharma and H3 Biosciences as Vice President, Drug Discovery; Colm O’Dushlaine formerly of Regeneron Genetic Center and the Broad Institute of Harvard and MIT as Vice President – Genomics and Data Science; and Jude Uzonwanne who held multiple roles at the Monitor Group, Bain and Company, and the Bill and Melinda Gates Foundation as Chief Business Officer.
Then there were the claims of financial impropriety levelled against the former CEO and members of his executives by employees.
While this claim remains unverified to the public, it is noteworthy that the company has had to slash its core workforce, two executives had to leave in very short order, with the company overlooking the Vice-Presidents to replace its former CEO, a medical doctor, with Teresia Bost, a General Counsel, who is a Doctor of Law.
Indeed the company is at a pivotal transition and requires new leadership to steer it through.
Is it possible then that the choice of who this leadership rests on is a pointer to the kind of situation the company now finds itself in and which it is looking to get away from?
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!