A Nashville-based biotech startup promising to revolutionize concussion diagnosis is facing securities fraud allegations from investors who claim they were misled about a saliva-based testing device that has yet to receive regulatory approval or demonstrate clinical validity.

Head Genetics Inc., founded in 2022 by branding executive George Gallo and pharmaceutical veteran Fabian Maclaren, is now the subject of active litigation in both Texas and Illinois, with investors Solidaris Capital LLC and Cirrus Investments LLC are alleging fraud in connection with what court documents describe as a "failed charitable deduction securities offering."

The Head Genetics lawsuit, filed December 10, 2024, in Dallas County, Texas, with additional proceedings in Cook County, Illinois, centers on what plaintiffs term the "Tech2head Recovery" securities offering. The case involves multiple defendants, including Head Genetics, Carita Investments L.L.C., and Mark Bianchi, with court records showing numerous discovery motions and emergency filings that suggest complex financial disputes and broken investor relationships.

THE COMPANY'S AMBITIOUS CLAIMS

Head Genetics markets itself as developing a revolutionary saliva-based concussion assessment device that would transform how brain injuries are diagnosed. The company's website touts the device as "easy to use & non-invasive" and "inexpensive & fast," claiming it uses "AI-assisted CDC protocol telehealth assessment" with materials that are "BPA Free, FDA approved, premium materials."

Head Genetics markets itself as developing a revolutionary saliva-based concussion assessment device that would transform how brain injuries are diagnosed. The company's website touts the device as "easy to use & non-invasive" and "inexpensive & fast," claiming it uses "AI-assisted CDC protocol telehealth assessment" with materials that are "BPA Free, FDA approved, premium materials."

The company cites compelling market statistics: 70 million cases of concussion occur annually worldwide, with 40% remaining undiagnosed. Head Genetics positions itself to capture a share of the traumatic brain injury diagnostic market, which it claims is approaching $1.75 billion and expected to reach $3 billion by 2028.

However, a significant discrepancy emerges in the company's timeline. While Head Genetics was incorporated in 2022, its website claims the "PROJECT STARTED: 2013," creating a nine-year gap that raises questions about the continuity and ownership of the technology.

REALITY CHECK: NO FDA APPROVAL, NO FUNDING, NO TRIALS

Despite its bold marketing claims, Head Genetics faces substantial gaps between promises and regulatory reality. No FDA approval or clearance has been found for the company's concussion device, nor are there any active clinical trials registered on ClinicalTrials.gov under the company's name.

Perhaps most striking for a medical device company, Head Genetics has raised zero external funding, according to the Tracxn database. This is particularly concerning given that medical device development typically requires $10-50 million in capital for clinical trials, FDA approval processes, and commercialization efforts.

The company's claim of "FDA approved, premium materials" appears to conflate material safety with device approval—a distinction that regulatory experts say is crucial. Having FDA-approved materials is fundamentally different from having an FDA-approved diagnostic device, which requires rigorous clinical validation and regulatory review.

LEADERSHIP BACKGROUNDS RAISE QUESTIONS

The founding team brings extensive commercial experience but limited apparent expertise in medical device regulation. George Gallo, who serves as CEO and co-founder, has spent 20 years in branding, packaging, digital marketing, and e-commerce, working with high-profile clients including LVMH, Target, and Fendi. However, there is no apparent background in medical devices or regulatory affairs in his public profile.

Co-founder Fabian Maclaren claims 17 years of experience in the biotech and pharmaceutical sectors, with previous roles as CEO at Essential Citizen Inc. and Genesis Laboratories Inc. His LinkedIn profile boasts of successful exits, including a "$500M exit" of a four-year-old brand, though these claims could not be independently verified through public records.

Neither founder appears to have published medical research or demonstrated the specialized regulatory experience typically required to navigate the FDA's complex approval pathway for diagnostic medical devices.

CROWDED COMPETITIVE LANDSCAPE

Head Genetics is entering an increasingly competitive market where several companies have already achieved significant regulatory and commercial milestones. Banyan Biomarkers received FDA clearance for its blood-based traumatic brain injury test in 2018 and has been commercially available for years.

In the saliva-testing space specifically, Penn State University and Quadrant Biosciences received a patent for their saliva-based concussion test in late 2022, with commercialization expected in 2023. More recently, HeadFirst, a company at the University of Waterloo's startup incubator, has been developing its own saliva-based test with academic backing.

Major diagnostics companies, including Abbott, are also developing point-of-care biomarker tests, bringing substantial resources and regulatory expertise that Head Genetics lacks.

INDUSTRY EXPERTS WEIGH IN

Medical device industry experts express skepticism about Head Genetics' prospects. The combination of no external funding, active securities litigation, and absence of regulatory milestones creates what one industry observer called "a perfect storm of red flags."

"It's highly unusual to see a medical device company operate for three-plus years without any external funding," said a biotech investment analyst who requested anonymity. "The FDA pathway for diagnostic devices is lengthy and expensive. Without clinical data, commercialization appears years away, assuming they can resolve their legal and funding challenges."

RED FLAGS FOR HEAD GENETICS INVESTORS

The Head Genetics case presents multiple warning signs that industry experts say should concern potential investors and partners:

• Zero external funding raised despite being in a capital-intensive sector
• Active securities fraud litigation alleging investor deception
• No regulatory approvals despite claiming a decade of development
• The leadership team lacks specialized medical device regulatory expertise
• Timeline inconsistencies that raise credibility questions
• Absence of clinical partnerships or academic collaborations
• Website marketing that may overstate product readiness

The ongoing securities litigation makes future fundraising extremely difficult, as investors typically conduct thorough due diligence that would uncover pending legal disputes. The reputational damage from fraud allegations, whether ultimately proven or not, creates additional barriers to attracting institutional investment.

The Head Genetics case highlights the challenges facing early-stage medical device companies and underscores the importance of investor due diligence in the biotech sector. While the concussion diagnostic market represents a significant opportunity, it is driven by increased awareness of traumatic brain injury risks in sports and the military.