Plot thickens around Legend Biotech, GenScript with founder Frank Zhang's arrest
Two months after Legend Biotech made the startling disclosure that founder and then-CEO Frank Zhang was placed under “residential surveillance,” its parent company revealed that he’s been formally arrested.
Zhang — who, since founding GenScript 18 years ago, has taken the CRO public and groomed Legend Biotech in-house until the J&J-partnered CAR-T player was mature enough for its own Nasdaq listing — is severing his final ties with both. He is resigning as board chair/non-executive director of GenScript and director of Legend.
The circumstances around the customs investigations and the arrest remain opaque.
But the companies are ready to move on. GenScript has installed Meng Jiange, its VP of investor relations, as the chair, while adding former chief strategy officer Zhu Li and Wang Xuehai, VP of the China Pharmaceutical Enterprises Association, to the board. Zhu is also joining Legend’s board.
“While no charges have been filed against him, Dr. Zhang decided that to avoid unnecessary distraction to Legend Biotech, his resignation would be in the interests of Legend Biotech and its shareholders,” a statement from Legend read.
In an HKEX filing, GenScript reported it had learned about his arrest on Friday from a family member who sent over “a copy of a notice of arrest issued by (the) Customs Anti-Smuggling Department of Zhenjiang” dated Nov. 20. The suspected offense had to do with “smuggling goods prohibited by the import and export regulations under the laws of the PRC.”
Two other employees who had handled import and export activities have also been arrested, it wrote. There was no word on what the goods might be.
Jefferies analyst Biren Amin has previously suggested, based on a chat with Legend, that the potential violation surrounded GenScript’s export of blood and genetic samples out of China.
Ying Huang, the former CFO, is now overseeing all that as CEO while GenScript co-founder Sally Wang serves as board chairwoman.