uBiome Has a Leadership Problem Amid FBI Woes

Happy Monday, readers!

The Wall Street Journal and Business Insider report that uBiome, a lab testing and gut science startup that’s brushed up against FBI investigations over alleged billing shenanigans, is grappling with yet another set of executive shakeups.

John Rakow, the company’s general counsel who’s served as interim CEO for all of two months, is reportedly leaving the company. He will be replaced by three directors who will oversee operations, according to FierceBiotech; company founders and former co-CEOs Jessica Richman and Zac Apte, who were relegated to board positions following the initial FBI raid firestorm, will also reportedly resign from the board.

An FBI raid earlier this year led to increased scrutiny of uBiome by insurers and other regulators—including massive organizations like Anthem, Aetna, and the California Department of Insurance. The allegations include charges of fraudulent billing and potentially troubling relationships between the company and the physicians who ordered its tests.

uBiome, for its part, has initiated internal investigations into those allegations (the very investigations leading to the recent leadership shakeups). For now, its interim leadership will consist of a trio from the consulting firm Goldin Associates.

Read on for the day’s news.

Sy Mukherjee

@the_sy_guy

sayak.mukherjee@fortune.com

DIGITAL HEALTH

Elizabeth Holmes, ahead of 2020 trial, says the media is why Theranos came tumbling down. Elizabeth Holmes and former second-in-command Sunny Balwani will be heading to federal court in July 2020 over the pair's alleged fraud as leaders of Theranos, the blood testing startup that came tumbling down following detailed reports from the Wall Street Journal alleging major deception by Holmes and Balwani. Holmes' lawyers have chosen an interesting tact in the case: Blame the messenger for ostensibly "exerting influence on the regulatory process in a way that appears to have warped the agencies’ focus on the company and possibly biased the agencies’ findings against it." (The Hill)

INDICATIONS

Pfizer's Viagra fails in quest to be a children's hypertension drug. Sildenafil, the active ingredient in the drug more commonly known as Viagra, is has a history in the heart treatment world. After all, researchers were attempting to create a heart medication when they stumbled upon the compound's other, err, enhancing effects—and it's actually approved as a treatment for pulmonary hypertension among some people. But the treatment won't be winning an add-on indication for treatment of pulmonary hypertension in infants following a failed phase 3 trial. Sometimes, the best laid plans of blockbuster drugs stumble, too. (Endpoints News)

THE BIG PICTURE

Ten states, D.C. sue for stricter asbestos rules. Ten U.S. states and the District of Columbia on Monday (led by California and Massachusetts) are suing the Environmental Protection Agency to implement more stringent asbestos rules after the EPA declined the suing parties' request to collect more data on the issue. The EPA has previously argued it is already aware of the dangers associated with the carcinogenic substance, making the new data collection moot. (Reuters)