The Federal High Court in Lagos has halted the sale of assets belonging to genomics startup 54gene following a lawsuit filed by the company’s founder, Dr Abasi Ene‑Obong, against key investors.
The injunction prevents the transfer or disposal of the company’s intellectual property, including its biobank of genomic data from 100,000 Nigerians, valued at around $3 million. This dataset is considered one of the most significant collections of African genomic material and is central to ongoing debates about data sovereignty and ethical research governance.
Founder Accuses Investors of Forcing Company’s Collapse
In his petition, Dr Ene‑Obong alleges that major investors — Cathay AfricInvest Innovation Fund and Adjuvant Capital — engaged in actions that deliberately undermined the company’s survival.
According to court filings, the founder claims:
- The investors blocked a $110 million rescue deal.
- They reduced the company’s valuation from $170 million to $50 million.
- They imposed a 4× liquidation preference, ensuring investor payouts before common shareholders.
- They sidelined the board and rejected his buyout offers.
Dr Ene‑Obong maintains that these moves led directly to 54gene’s shutdown in 2023, less than four years after it was hailed as one of Africa’s most promising biotech startups.
Background: Rise and Fall of a Biotech Pioneer
Founded in 2019, 54gene aimed to close the global genomics research gap by ensuring African genetic data was represented in medical research. At its peak during the COVID-19 pandemic, the company was valued at around $170 million and had attracted millions in venture funding.
However, post-pandemic funding slowdowns, internal leadership changes, and disputes over corporate governance saw the company’s fortunes decline rapidly, culminating in its closure in late 2023.
Court’s Position and Next Steps
The Federal High Court’s injunction freezes 54gene’s assets until the full hearing of the case. Legal experts say the ruling underscores the sensitivity of genomic data governance in Africa, where debates over ownership, consent, and foreign investor control are intensifying.
The case is expected to set an important precedent for:
- Founder–investor power dynamics in African startups.
- Regulatory oversight of health data.
- Ethical commercialisation of indigenous genomic information.
Neither Cathay AfricInvest nor Adjuvant Capital has issued a public response to the allegations at the time of writing.
Why This Matters
The outcome of the case could shape how biotech ventures in Africa handle:
- Data sovereignty
- Investor relations
- Asset liquidation under financial distress
Given the global demand for diverse genomic datasets, the ruling will be closely watched by scientists, investors, regulators, and advocacy groups worldwide.
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