Genapsys Lawsuit!
Yesterday we talked about Roche’s history in next-gen sequencing, reviewing the 7 other investments they’ve made in this space. and the statements they made about performance then and now.
The problem is companies often make ambitious claims about accuracy of unreleased platforms. And this has made folks pretty suspicious…
Genapsys seems potentially another case of “fudging the data” or as the lawsuit below puts it “astounding and egregious” “fraudulent conduct”!
The claim comes from Foresite capital case documents1 against Genapsys and CEO Esfandyarpour. It’s pretty juicy…
The scope and nature of the fraudulent conduct in this case is astounding and egregious, to a degree rarely seen in civil cases. Internal evidence produced by the Defendants reveals that they engaged in brazen scientific and financial fraud. To obtain Foresite’s money, for example, Esfandyarpour directed his employees to manipulate scientific data, including the test results generated in response to Foresite’s due diligence study. He also directed them to manipulate the financial reports they provided to Foresite, reports that were fundamentally inconsistent with GenapSys’s own internal financial information. Defendants lied repeatedly about the success of GenapSys’s technology, demand for its products, and its financial condition - all in an effort to portray GenapSys as a biotech company that was beyond the proof of concept stage and ready for commercial launch. In reality, nothing could have been further from the truth.
The document contains slides from the Genapsys pitch deck, showing near Q30 125bp reads: