Court halts 54gene asset sale at the request of its founder, who alleges that investors led to the company's downfall
In a dramatic turn of events, Nigerian biotech startup 54gene finds itself in the midst of a high-stakes legal battle. The dispute, which involves founder Dr. Abasi Ene-Obong and its largest investors - the Cathay AfricInvest Innovation Fund and Adjuvant Capital - centres around allegations of forced collapse and unilateral decisions that led to the company's downfall.
At the heart of the controversy is the sale of 54gene's valuable biobank, containing biodata from approximately 100,000 Nigerians, for a reported $3 million. This price is far below the company's peak valuation of $170 million. Ene-Obong alleges that the investors demanded four times their initial investment back before any sale proceeds could be shared.
The Federal High Court in Lagos has granted an injunction halting the sale of 54gene’s assets, including its biobank, pending further legal proceedings. The court action comes as the dispute focuses on determining the valuation of the biobank, the ownership and transferability of intellectual property, participant consents, and data governance obligations associated with 54gene's assets.
Before shutting down in 2023, 54gene had built Africa's largest independent biobank, collecting genetic material across 300 ethnic groups. The startup, once considered one of Africa's most promising biotech startups, raised over $45 million and played a key role in scaling Nigeria's COVID testing infrastructure.
Ene-Obong, who has filed a lawsuit against the investors, accuses them of blocking contracts that could've revived revenue and threatening him with false fraud allegations. After his resignation, the investors transferred the company's assets and IP into its Nigerian subsidiary.
Cathay AfricInvest has not issued a statement regarding the ongoing legal dispute, while Adjuvant Capital claims it cannot comment on ongoing court matters but asserts that it acts in the best interests of its portfolio companies.
Ene-Obong's mission for 54gene was to harness African genomic insights for better health, with a focus on the highest standards of ethics and community trust. In response to the ongoing legal battle, he has co-founded Syndicate Bio, a new genomics venture with Jumi Popoola and Estelle Dogbo, to build genomic datasets across Africa and other diverse regions.
The legal case over 54gene's biobank and intellectual property is still ongoing, and until judgment is passed, these assets remain frozen. The outcome of this legal showdown could have significant implications for global medicine through African DNA.
- The ongoing legal dispute, centered around forced collapse and unilateral decisions, in turn, involves the valuation of 54gene's biobank, a critical asset in the field of African genomic research, and the ownership of the associated technology.
- As the controversies surrounding 54gene's biobank and intellectual property unfold, the founding team is already venturing into new beginnings, establishing Syndicate Bio to procure genomic datasets across Africa and diverse global regions, maintaining the focus on ethics and community trust that defined 54gene's mission.
