Microbiome Startups Pushing into the Clinical Lab Space

Startup companies testing patients’ gut bacteria attracted approximately $1 billion in venture capital

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REPUTABLE CLINICAL LABORATORY COMPANIES HAVE A NEW COMPETITOR in what has been called the Wild West of microbiome startups. 

Some of the companies in this nascent industry have been hailed for developing health breakthroughs while others have been indicted for fraud, according to Kaiser Health News. Either way, these companies are serving up a cautionary tale for consumers, KHN noted. 

Among the companies in this space are those that provide individualized diet regimens based on analyzing consumers’ microbiome, or gut bacteria. Consumers pay hundreds of dollars for tests not covered by insurance, hoping to get answers to health problems ranging from irritable bowel syndrome to obesity, the health news service added. 

A financial database for investors called Pitchbook Data has identified more than a dozen direct-to-consumer providers offering gut-health tests, KHN noted.

A Worrying Trend

Early reporting on this industry shows a worrying trend of new lab entrants seeking to sell consumers tests that analyze the human microbiome, which is an inexact area of science and medical care. 

Perhaps most concerning for clinical laboratories is that these companies not only advertise to consumers, but they also send sales representatives to physicians’ offices, perhaps crowding out the time doctors might reserve for sales calls from highly-reputable clinical laboratories that have long histories of serving physicians and their patients. 

Companies peddling human microbiome tests also are sending sales professionals to chiropractors, homeopaths, naturopaths, and other providers treating patients seeking more information on their health. 

Consumer Interest

As these companies proliferate, established clinical lab companies can expect to get questions from many consumers, and perhaps physicians, about whether long-standing clinical labs can offer these same tests of individuals’ gut specimens. 

Clinical labs also may get questions about the reliability, accuracy, and utility of microbiome tests. 

Another concern for reputable clinical labs is that startup companies testing patients’ gut bacteria attracted approximately $1 billion in venture capital between 2015 and 2020, KHN reported, citing data from Crunchbase, a tech company that collects and publishes information on public and private companies. 

Note that venture capitalists have been attracted by what they consider to be promising research and consumers’ embrace of at-home testing.

“Not all companies in this relatively new industry are equal. While some are developing peer-reviewed studies to promote their offerings, others are peddling murky science, KHN reported. 

“A lot of companies are interested in the space, but they don’t have the research to show that it’s actually working,” Christopher Lynch, Acting Director of the Office of Nutrition Research at the National Institutes of Health (NIH), told KHN. “And the research is really expensive.”

To examine the value of studying the human microbiome, the NIH is planning to spend $160 million to launch a nutrition for precision health research effort early in 2022. In this effort, the NIH plans to enroll one million Americans to study how diet, genes, metabolism, and other factors affect the microbiome, KHN reported. 

Microbiome Testing Firms

Other companies seeking to run tests for individuals who want to know more about their gut microbes include Viome, a company that says its advisory board includes holistic medicine advocate Deepak Chopra, and George Church, PhD, the Robert Winthrop Professor of Genetics at Harvard Medical School who developed the first direct genomic sequencing method, which resulted in the first genome sequence. Church also helped to start the Human Genome Project in 1984 and the Personal Genome Project in 2005.

Another company in this arena is ZOE, which says it is backed by cutting edge science and researchers who work in collaboration with scientists from Massachusetts General Hospital, King’s College London, Stanford Medicine, and the Harvard T.H. Chan School of Public Health. 

Microbiologists and clinical pathologists understand that the human microbiome is one of the exciting new fields in laboratory medicine. Microbiome testing has great potential for use as a diagnostic tool. At the same time, it can be expected that a number of “quick buck” operators will seize the opportunity to sell microbiome tests of questionable value to consumers. For these consumers, caveat emptor is good advice!

Feds Charge uBiome with $60 Million Fraud

FURTHER RESEARCH MAY HELP SEPARATE THOSE COMPANIES with clinically useful human microbiome laboratory tests from those companies that are not reputable.

In the latter group is the microbiome testing company uBiome, a biotechnology developer in San Francisco that was among the first to offer fecal sample testing to consumers. Founded in 2012, uBiome offered at-home, direct-to-consumer tests for health-conscious individuals seeking to learn more about the bacteria in their gut.

However, in April 2019, the Federal Bureau of Investigation (FBI) raided uBiome’s headquarters on allegations of insurance fraud and questionable billing practices, CNBC reported. The company was alleged to have billed patients for tests multiple times without consent, the network added. 

Kaiser Health News reported that uBiome filed for bankruptcy after the FBI raid. In addition, Kaiser Health News noted that uBiome had marketed its tests as being clinical in nature and sought reimbursement from insurers for almost $3,000 per test. 

That’s when uBiome’s business tactics came under scrutiny. (See, “Medical Laboratory Testing Company uBiome Raided by FBI for Alleged Insurance Fraud and Questionable Business Practices,” Dark Daily, Aug. 9, 2019.)

Finally, in March 2021, the U.S. Securities and Exchange Commission charged uBiome’s cofounders, Jessica Richman and Zachary Apte, of defrauding investors of $60 million. According to The Wall Street Journal’s podcast, The Journal, investigators considered the pair to be fugitives when they relocated to Germany after the charges were announced.

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