Genentech, JHL Reach Agreement Over Stolen IP

Nearly one year after charges were filed against former Genentech employees accused of stealing trade secrets to benefit Taiwan-based JHL Biotech, a biosimilar drugmaker, the two companies have come to an agreement over the ill-gotten intellectual property – destruction.

On Thursday, Genentech and JHL Biotech entered into a Memorandum of Understanding that requires the Taiwanese company to abandon development and destroy all cell lines and cell banks associated with Genentech’s medicines Pulmozyme, Rituxan, Herceptin and Avastin. Additionally, JHL Biotech has been ordered to not disclose or share any of the confidential information that belongs to Genentech in any way. JHL agreed to cooperate with the agreement related to the stolen intellectual property, Genentech said in a statement sent to BioSpace. Also as part of the agreement, Genentech has the right to conduct unannounced audits to ensure compliance, the Roche subsidiary said.

Financial terms of the agreement were not disclosed. Founded in 2012, JHL Biotech develops biosimilar drugs primarily for marketing in China.

In 2018, four former Genentech employees who became consultants to JHL, were indicted for a conspiracy to steal information related to four Genentech drugs, Pulmozyme, Rituxan, Herceptin and Avastin, and provide that information to JHL. According to the indictment, Xanthe Lam, one of the four who was terminated by Genentech in 2017, gathered confidential clinical data about the drugs and sent them to her husband Allen Lam and the other two conspirators, Hohn Chan and James Quach. They, in turn, sent the information to JHL Biotech. The indictment also said that while employed at Genentech, Xanthe Lam secretly consulted with the Taiwan-based company. Xanthe Lam was also accused of giving Quach access to her work computer to gain access to Genentech’s secure document repository in order to steal proprietary manufacturing secrets.

Following the indictments against the four former employees, Genentech filed a civil complaint in U.S. District Court for the Northern District of California against the indicted individuals, as well as Taiwan-based JHL. The lawsuit also named JHL co-Chairman and Chief Executive Officer Racho Jordanov and Chief Operating Officer Rose Lin. When the lawsuit was filed, Genentech told BioSpace that Jordanov and Lin “solicited and accepted Genentech trade secrets and other confidential and proprietary information from both Xanthe and Allen Lam.”

Sean Johnston, Genentech’s general counsel and chief compliance officer, said the Memorandum of Understanding has secured the return of the company’s intellectual property and prevents any further dissemination and illegal use of them.

“Leveraging trade secrets and confidential and proprietary information from an employer or a competitor to create an unfair and illegal competitive advantage is a serious crime. Dishonest and illegal actions such as these threaten scientific innovation, obstruct fair competition, and undermine the hard work of our employees and people throughout the industry who act with integrity and in the best interests of patients every day,” Johnston said in a statement.