Pfiz­er or­dered to dis­close FBI com­mu­ni­ca­tions in trade se­crets case

A fed­er­al judge has or­dered Pfiz­er to hand over its com­mu­ni­ca­tions with the FBI in a trade se­crets case it brought against the founders of Re­gor Ther­a­peu­tics last year.

Pfiz­er filed suit last Feb­ru­ary against two for­mer em­ploy­ees, Xi­ayang Qiu and Min Zhong, who quit their Big Phar­ma jobs in 2018 to launch the Eli Lil­ly-part­nered start­up Re­gor. About five months af­ter leav­ing Pfiz­er, Qiu and Zhong ap­plied for patents on a set of com­pounds that plain­tiffs al­lege “ap­pear strik­ing­ly sim­i­lar to . . . com­pounds that Pfiz­er had de­vel­oped,” ac­cord­ing to court doc­u­ments.

Pfiz­er ac­cused the de­fen­dants of schem­ing to start a ri­val com­pa­ny while work­ing on its GLP-1 pro­gram and steal­ing trade se­crets. The com­pa­ny claimed to have re­cov­ered ev­i­dence in its foren­sic analy­sis that Zhong down­loaded a num­ber of con­fi­den­tial doc­u­ments in his fi­nal months at Pfiz­er, in­clud­ing in­for­ma­tion on the com­pa­ny’s GLP-1 tech­nol­o­gy, and pur­port­ed­ly saved them in an ex­ter­nal hard dri­ve be­fore delet­ing them, ac­cord­ing to a com­plaint.

“The Pfiz­er trade se­crets and con­fi­den­tial in­for­ma­tion that Qiu and Zhong stole es­sen­tial­ly gave De­fen­dants the play­book and the crit­i­cal un­der­ly­ing sci­ence and da­ta to de­vel­op their own sup­posed di­a­betes-and-obe­si­ty treat­ment, an un­law­ful head start that saved De­fen­dants sig­nif­i­cant mon­ey and years of de­vel­op­ment time,” the com­plaint states.

Re­gor lat­er de­nied the claims and ques­tioned why Pfiz­er wait­ed as long as it did af­ter Qiu and Zhong left Pfiz­er to bring the suit to court.

Be­fore fil­ing suit, Pfiz­er launched its own in­ves­ti­ga­tion in­to Qiu and Zhong’s com­pa­ny-is­sued lap­tops and email ac­counts and even­tu­al­ly turned to the FBI, which had pre­vi­ous­ly en­cour­aged com­pa­nies to share in­for­ma­tion on sus­pect­ed cas­es of trade se­cret theft.

How­ev­er, when de­fen­dants re­quest­ed to see 35 emails and text mes­sages be­tween Pfiz­er and the FBI, Pfiz­er claimed that the cor­re­spon­dence was “pro­tect­ed from dis­cov­ery by the work prod­uct doc­trine, and that thir­ty-one of the thir­ty-five were pro­tect­ed by the at­tor­ney-client priv­i­lege as well.”

De­fen­dants ar­gued that it waived any pro­tec­tions it did have by “re­ly­ing on and cit­ing its foren­sic in­ves­ti­ga­tion and re­lat­ed find­ings” in its ar­gu­ment and by vol­un­tar­i­ly shar­ing the doc­u­ments with the FBI.

Con­necti­cut fed­er­al judge Thomas Far­rish sided with de­fen­dants on Fri­day, rul­ing that Pfiz­er must pro­duce all 35 doc­u­ments by Feb. 17.

“With re­spect to Pfiz­er’s at­tor­ney-client priv­i­lege claims, the Court con­cludes that even if the in­for­ma­tion in the thir­ty-one e-mails and text mes­sages had once been pro­tect­ed, Pfiz­er waived that pro­tec­tion by dis­clos­ing it to the FBI,” the de­ci­sion states.

Pfiz­er said in a state­ment to End­points News on Tues­day that it’s dis­ap­point­ed in the court’s or­der “as we be­lieve the ma­te­ri­als at is­sue are pro­tect­ed by priv­i­lege.”

“This is a dis­cov­ery dis­pute and not a rul­ing on the mer­its of the case. The com­pa­ny re­mains con­fi­dent in its case and be­lieves the full ev­i­den­tiary record will prove that its trade se­crets were mis­ap­pro­pri­at­ed by the de­fen­dants,” the com­pa­ny con­tin­ued in an email.

Re­gor has not re­spond­ed to a re­quest to com­ment as of press time.

Eli Lil­ly inked a col­lab­o­ra­tion and li­cens­ing deal with Re­gor back in 2021 around meta­bol­ic dis­or­ders, giv­ing the Chi­nese biotech an up­front pay­ment of up to $50 mil­lion and up to $1.5 bil­lion in mile­stones.

Qiu and Zhong are still list­ed as Re­gor’s CEO and COO on the com­pa­ny’s web­site. Last April, the com­pa­ny an­nounced the launch of a Phase II tri­al in the US for its GLP-1 re­cep­tor ag­o­nist in pa­tients with type 2 di­a­betes mel­li­tus.

Has the mo­ment fi­nal­ly ar­rived for val­ue-based health­care?

RBC Capital Markets’ Healthcare Technology Analyst, Sean Dodge, spotlights a new breed of tech-enabled providers who are rapidly transforming the way clinicians deliver healthcare, and explores the key question: can this accelerating revolution overturn the US healthcare system?

Key points

Tech-enabled healthcare providers are poised to help the US transition to value, not volume, as the basis for reward.
The move to value-based care has policy momentum, but is risky and complex for clinicians.
Outsourced tech specialists are emerging to provide the required expertise, while healthcare and tech are also converging through M&A.
Value-based care remains in its early stages, but the transition is accelerating and represents a huge addressable market.

Clay Siegall, Morphimmune CEO

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Sen. Maria Cantwell (D-WA) (Drew Angerer/Pool via AP)

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