Two California residents who set up a Taiwanese biopharmaceutical company sentenced for stealing trade secrets from Genentech

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Two California residents who co-founded a biopharmaceutical company in Taiwan were sentenced to just over a year in prison on Tuesday for wire fraud and stealing trade secrets from another company to gain a competitive advantage, officials said.

Rose Lin, also known as Rose Sweihorn Tong, 73, of South San Francisco, and Raco “Racho” Ivanov Jordanov, 74, of Rancho Santa Fe, co-founded JHL Biotech, Inc. in Taiwan in 2012 and were COO and CEO. of the company, respectively. Prosecutors said that between 2011 and 2019, they obtained or authorized and encouraged their employees to obtain and use confidential and proprietary information from Genentech, an American biotech company headquartered in south San Francisco. , in an effort to reduce costs and meet certain regulatory requirements, according to the United States Attorney’s Office for the Northern District of California.

The trade secrets removed from Genentech allowed JHL Biotech to “cheat, smooth over, solve problems, provide examples, avoid re-experimentation, eliminate costs, provide scientific assurance, and otherwise help JHL Biotech start, develop and operate his business”. the U.S. Attorney’s Office said in the declaration Tuesday.

Jordanov was sentenced to 12 months and one day in prison, plus 36 months of probation, including nine months of house arrest. Lin was sentenced to 12 months and one day in prison, plus 36 months of probation, officials said.

JHL Biotech, which changed its name to Eden Biologics in February 2021, develops and manufactures biosimilars – biologics that are essentially copies of original or reference biologics intended to expand access to drugs or other treatments .

JHL Biotech’s theft of Genentech’s confidential or proprietary information began when Jordanov hired former Genentech employees who secretly brought trade secrets with them from company to company, officials said. Jordanov admitted that he believed taking this information from Genentech violated employment contracts and nondisclosure agreements, but he made no effort to determine whether that was really the case or to discourage the practice. , prosecutors said.

Between 2014 and 2018, Jordanov sometimes used and told others at the company to use confidential or proprietary Genentech documents for JHL Biotech projects such as the development, construction and operation of new facilities. of the company, officials said. After the criminal investigation into JHL Biotech’s practices began, Jordanov told an employee to delete an email asking him to use Genentech’s materials, and told him to tell others to do the same, according to the prosecutors.

In a separate program, Lin brought in Xanthe Lam, a senior scientist who worked at Genentech, to secretly serve as a consultant for JHL Biotech, knowing that Lam was not allowed to do both jobs at the same time due to policies. of Genentech, officials said. . Lin instructed his employees to seek Lam’s help. She attempted to cover up the practice by paying Lam through her husband, Allen Lam, and instructing her employees to only contact Xanthe Lam through her husband’s email address, prosecutors say.

In a related case, Xanthe and Allen Lam pleaded guilty in July 2021 to conspiracy to commit trade secret theft by stealing confidential, proprietary and trade secret information from Genentech and giving it to JHL Biotech, officials said. .

When JHL Biotech was working to create a set of standard operating procedures in order to receive certain necessary certifications from the Taiwanese government, some employees used confidential and proprietary Genentech documents without Genentech’s knowledge or permission, said officials. Lin was responsible for ensuring that JHL Biotech met certification requirements and knew that its employees were illegally developing standard operating procedures. The company has developed up to 100 standard operating procedures using trade secrets stolen from Genentech, officials said.

In meetings in 2016 with Sanofi SA, a multinational pharmaceutical company with which JHL Biotech did business, Lin and Jordanov falsely claimed to the company that it had developed its biosimilars without stealing intellectual property from other companies. Sanofi SA agreed to a corporate transaction and invested about $101 million in JHL Biotech, officials said.

Lin and Jordanov were indicted by a federal grand jury in June 2021. They entered plea agreements and pleaded guilty to conspiracy to commit trade secret theft and wire fraud. Other charges such as money laundering and conspiracy to obstruct justice were dismissed when they were sentenced on Tuesday, officials said.

Genentech filed a civil lawsuit against JHL Biotech and the two parties agreed to a settlement in September 2019 that required JHL Biotech to halt development and clinical trials of certain products, Eden Biologics said in a statement.

Andy Picon (he/him) is a writer for the San Francisco Chronicle. Email: [email protected]: @andpicon

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