Approximately one year ago, a foreign media report titled “Former Genentech Employees Sued for Allegedly Leaking Confidential Drug Formulas to JHL Biotech” stated that four former Genentech scientists were alleged to have leaked Genentech’s confidential drug formulas to the Taiwanese biosimilar company JHL Biotech between 2012 and 2017.
According to a September 6 report by foreign media outlet Biospace, Genentech and Xikang Bio recently signed a memorandum of understanding. The agreement requires Xikang Bio to cease development and destroy all cell lines and cell banks associated with Genentech’s originator drugs Pulmozyme (dornase alfa), Rituxan (rituximab), Herceptin (trastuzumab), and Avastin (bevacizumab).
Furthermore, XiKang Bio was ordered to refrain from disclosing or sharing any confidential information belonging to Genentech in any manner. In a statement issued to the media, Genentech stated that XiKang Bio agreed to sign the agreement concerning the stolen intellectual property. According to foreign media reports, as part of the agreement, Genentech has the right to conduct unannounced audits to ensure compliance. However, the financial terms of the agreement have not been disclosed.
According to the original indictment, the individuals accused of stealing confidential documents are Xanthe Lam, a scientist who worked at Genentech from 1986 to 2017; her husband, Allen Lamu (who also formerly worked at Genentech); and two other former Genentech employees, John Chan and James Quach.
The indictment alleges that the four defendants disclosed Genentech’s confidential information from 2012 to October 2017 to Xikang Bio, and that Allen Lam, John Chan, and James Quach served as consultants for Xikang Bio after leaving Genentech.
The indictment alleges that although Xanthe Lam was not employed by XiKang Bio, she visited the company in December 2013 and secretly downloaded Genentech documents, which she then provided to her husband. Meanwhile, in 2014, Lam participated in John Chan’s recruitment at XiKang Bio, maintained contact with him, and instructed him not to disclose the materials to others. Their relationship remained excessively close until Genentech terminated her employment in the fall of 2017. Lam is further accused of allowing James Quach access to her work computer to obtain Genentech’s secure document repository, thereby stealing proprietary manufacturing trade secrets.
However, the defense counsel stated that Xanthe Lam is a respected scientist with multiple patents, who was not working for competitors and never intended to profit from the alleged conspiracy. The lawyer argued that Genentech’s lawsuit merely reflects skepticism toward biosimilar startups capable of producing off-patent original “blockbuster drugs” at lower costs.
After filing lawsuits against four former employees, Genentech sued four suspects and Xikang Bio in the U.S. District Court for the Northern District of California, also naming Xikang Bio’s Co-Chairman and CEO Racho Jordanov and COO Rose Lin as defendants.
In Genentech’s view, Racho Jordanov and Rose Lin solicited and accepted Genentech’s trade secrets and other confidential and proprietary information from Xanthe Lam and Allen Lam.
Sean Johnston, General Counsel and Chief Compliance Officer of Genentech, stated that the memorandum of understanding ensures the return of Genentech’s intellectual property and prevents any further dissemination and unauthorized use.
“Using trade secrets and the confidential and patented information of employers or competitors to create an unfair and illegal competitive advantage is a serious criminal offense. These dishonest and illegal acts threaten scientific innovation, hinder fair competition, and infringe upon the fruits of the hard work of employees and professionals across the industry, who act with integrity and in the best interests of patients every day,” Sean Johnston said in a statement.