Genentech staff ‘funneled secrets to Taiwan biosimilar firm,’ prosecutors say

Legal and regulatory issues
Case centers on manufacturing protocols for Avastin, Rituxan, Herceptin and Pulmozyme (iStock/seb_ra)

Genentech is the latest biopharma company to be involved in an industrial espionage case, with three former researchers accused of passing sensitive information to a foreign rival.

An indictment disclosed this week claims that Genentech senior scientist Xanthe Lam, her husband Allen Lam and another Genentech worker named James Quach transferred trade secrets to Taiwanese biosimilar specialist JHL Biotech with the help of John Chan who worked for JHL.

A Bloomberg report says that Allen Lam worked in Genentech’s quality control department, while Quach was an engineer employed by the company at its South San Francisco campus. Collectively, they are accused of conspiring to steal trade secrets, along with various counts of theft of trade secrets and computer fraud, but all four have pleaded not guilty to the charges and been released on bond, it says.

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The news comes a few weeks after two scientists working for GlaxoSmithKline in Philadelphia admitted conspiring to steal trade secrets from the company and pass them on to Chinese company Renopharma after an FBI-led investigation. At the time, the enforcement agency said it was “determined to stand up for the innovators creating products that improve people’s lives, by investigating and holding accountable those who would steal trade secrets.”

JHL Biotech’s website shows that it has a number of biosimilars of Genentech drugs in its pipeline, including versions of the Roche unit’s three top-selling cancer drugs: Avastin (bevacizumab), Rituxan (rituximab) and Herceptin (trastuzumab).

The indictment suggests that all three of these drugs were involved, along with cystic fibrosis therapy Pulmozyme (dornase alfa), with the transferred information relating to manufacturing protocols.

Allen Lam, Quach and Chan all became consultants for the Taiwanese company between 2013 and 2017, according to the indictment, while Xanthe Lam is accused of secretly working on behalf of JHL while still employed at Genentech. She worked at the biotech from 1986 until the fall of 2017, it says, but spent a month at the Taiwanese firm in 2013.

During that time and afterwards she was involved in “downloading, collecting and transferring Genentech confidential documents relating to formulation development and raw material management,” it is claimed.

Genentech tells us that while employed by JHL, John Chan and other JHL employees, including the company’s co-founders, co-chairman, president and CEO Racho Jordanov and chief operating officer Rose Lin, "solicited and accepted Genentech trade secrets and other confidential and proprietary information from both Xanthe and Allen Lam."

"We reported these illegal activities to the U.S. Attorney’s Office and have cooperated with and will continue to work with law enforcement officials in their ongoing criminal investigation of these matters," said a spokesperson for the company. 

"In addition, following the arrests, Genentech filed a civil complaint in U.S. District Court for the Northern District of California against the indicted individuals, JHL, and Racho Jordanov and Rose Lin."