A New Orleans native who relocated from California to be chief marketing officer for once-promising biotech startup Renaissance RX alleges her brief stint there was a ploy to help the company lure outside investment before it was stymied by a federal review into its government billing practices.
Alison Diboll alleges in a lawsuit, filed Wednesday in Orleans Parish Civil District Court, that Renaissance promised her “a competitive salary, equity and other standard perks.” Instead, the lawsuit alleges the company “fraudulently enticed Ms. Diboll into accepting their offer, breached their agreement with her, caused her to detrimentally rely on their promises and ultimately intentionally inflicted emotional distress on her.”
The 39-page complaint rehashes a series of allegations against Renaissance that surfaced in the past year. The company, which grew from five employees in the New Orleans BioInnovation Center to nearly 800 nationwide, used genetic testing to help doctors tailor medications for individual patients.
Nearly all of Renaissance’s employees were let go amid a Medicare review that froze its primary revenue stream beginning in late 2014.
The federal review — considered a safeguard against fraud — cut off the company’s cash flow for its main effort, a 250,000-patient registry designed to catalog adverse drug effects and shed light on how patients respond to a particular dose regimen based on their genes. Medicare had committed to paying Renaissance as much as $600 for every patient participating.
Diboll’s attorney, Joseph Peiffer, of New Orleans, notes in the lawsuit that Renaissance executives Barry Griffith and Patrick Ridgeway had previously run another biotech firm, Natural Molecular Testing Corp., which fell apart amid its own Medicare review.
A Renaissance spokeswoman did not immediately return a request for comment Wednesday.
After Diboll was brought on board, she alleges that Renaissance executives kept delaying formalizing her contract until the company closed on its deal with TPG Growth, an arm of global investment giant TPG, which in late 2014 invested $55 million in the firm, according to the lawsuit. At that point, Renaissance decided it no longer needed her, the suit claims.
Afterward, Diboll sought severance but was rebuffed. She alleges that Renaissance’s lawyers threatened to “destroy her professional and personal reputation” if she took legal action.
The lawsuit lists Dr. Tarun Jolly, Renaissance’s founder and CEO, as well as Griffith and Ridgeway as defendants.
Along with the federal inquiry, a Rhode Island physician, who signed on to enroll his patients in Renaissance’s registry, has alleged in a separate lawsuit that Renaissance had committed “widespread potential legal and regulatory violations.”
Diboll’s lawsuit, which seeks a jury trial and financial damages, accuses Renaissance of fraudulent inducement, breach of oral contract, intentional infliction of emotional distress and unjust enrichment, among other allegations.
Follow Richard Thompson on Twitter, @rthompsonMSY.