The feds recently rounded up and charged a group of four, including a longtime senior scientist, with stealing trade secrets from Genentech in South San Francisco. But it’s the company they were allegedly working for — Taiwan’s JHL Biotech, closely partnered with Sanofi — that has inspired the big Roche subsidiary’s wrath.
In a detailed lawsuit filed in federal court, Genentech spelled out what it says was a scheme by JHL to steal a march on industry rivals in developing biosimilars of Rituxan, Herceptin and Avastin. And they are after an injunction to shut it down.
The detailed claim singles out Xanthe Lam — a senior scientist with 30 years experience at Genentech — and her husband, Allen Lam, as prime conspirators working for JHL.
Her work at the company touched on many of the blockbuster medicines Genentech has discovered and developed. Xanthe’s senior role gave her access to Genentech’s secure document repositories, and an array of other files and information that Genentech keeps secret in order to protect their value.
In 2013, the suit goes on to claim:
JHL founders Racho Jordanov and Rose Lin solicited Xanthe and her husband to help JHL develop biosimilar versions of four Genentech medicines: Rituxan, Pulmozyme, Herceptin, and Avastin. Allen Lam agreed to serve as a consultant for JHL in exchange for fees as well as founder stock options corresponding to tens of thousands of shares in the startup, and Xanthe began surreptitiously working directly for JHL, while still serving as Principal Scientist at Genentech.
Early on in 2013, says the suit, Xanthe told Genentech execs she was going on vacation for a month, but actually went straight to Taiwan with a Genentech laptop loaded with trade secrets. Then, in 2017, she’s accused of bringing ex-Genentech staffer James Quach into the conspiracy, after he had been fired for “performance-related” issues. Through Xanthe, he got into Genentech’s computer network and obtained more proprietary info, the suit alleges.
And it paid off.
At an astonishing pace for a biotech startup with fewer than 100 employees, JHL raised millions of dollars in private funding, went public on the Taiwan stock exchange, and managed to obtain approval from European regulatory authorities to launch a clinical trial of a Rituxan biosimilar in less than four years. By December 2016, JHL had inked a $236 million deal with French multinational pharmaceutical company Sanofi S.A. (“Sanofi”), and the two companies are now well on their way to marketing JHL’s version of Rituxan in China. JHL recently announced that it expects to start Phase III trials (typically the final stage of clinical testing required to support marketing approval) in Europe and in China during 2018.
Lawyers for Genentech say that Xanthe and her husband were also linked to four other companies in Taiwan that gained access to their trade secrets, which they learned during a company investigation of the two. And Xanthe and Quach, they add, willingly acknowledged their roles in the affair during interviews with company representatives.
Each stolen trade secret, standing alone, represents Genentech’s hard work and investment, and would aid a competitor looking for a shortcut to developing and marketing its own rival medicine. Taken together as a compilation, the stolen information provides a roadmap for JHL to produce biosimilar versions of Genentech’s medicines, thereby achieving through theft what Genentech accomplished through diligence, trial-and-error, hard-won know-how, and significant investment of time and money.
The lawsuit goes on to allege that JHL used the information they looted to create an unfair advantage for itself over Genentech, as well as everyone else making biosimilars of its three big franchise drugs. And the company wants the court to issue an injunction that forces JHL to return its trade secrets, shutting down the competitive threat while they seek compensation for the damage done.
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