Biotech co-founders admit to stealing trade secrets from Roche's Genentech, face possible prison terms

Roche Genentech
The latest guilty plea came weeks after two former Genentech employees pleaded guilty to trade secrets theft. (Roche)

After two former staffers at Roche’s Genentech pleaded guilty to stealing biologics trade secrets, their co-conspirators didn’t put up much of a fight before admitting to their roles in the scheme. The pair, former execs at Taiwanese company JHL Biotech, could now face prison sentences and hefty fines for the crimes.

Racho Jordanov and Rose Lin, the two co-founders and former top execs at JHL, pleaded guilty to charges of conspiring to steal trade secrets from Genentech and wire fraud, the U.S. Department of Justice (DOJ) said.

The two used the confidential, proprietary information to accelerate JHL’s development of biosimilars to Genentech’s top-selling biologic drugs and defrauded Sanofi into a licensing agreement, the feds say. Other charges will be dropped under the plea agreement.

The guilty pleas come weeks after former Genentech staffers Xanthe Lam and her husband Allen Lam admitted they stole trade secrets on blockbuster cancer drugs Avastin, Herceptin and Rituxan plus cystic fibrosis therapy Pulmozyme.

For their part, Jordanov and Lin were longtime Genentech employees before setting up their own shop, JHL, in 2012, the DOJ says. In January 2014, Lin tapped Xanthe, then a principal scientist at Genentech, to secretly work as JHL’s head of formulation.

To conceal Xanthe’s work for JHL, Lin paid Xanthe through her husband and instructed employees to refer to Xanthe as “Allen” in email communications, according to the DOJ. The info Xanthe stole allowed JHL to “cheat, cut corners, solve problems, provide examples, avoid further experimentation, eliminate costs, lend scientific assurance, and otherwise help” JHL develop its programs, U.S. federal officials said.

For example, in early 2014, Lin’s team used Genentech documents to create around 90 to 100 standard operation procedures to apply for a good manufacturing practices certification from local drug authorities, the DOJ said.

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In December 2016, Jordanov and Lin inked a Rituxan biosimilar collaboration deal with Sanofi in China. To pen the $101 million agreement, JHL concealed the trade secrets theft and falsely claimed that its biosimilar operations didn’t infringe upon rights of other companies.

In the plea agreement, Jordanov admitted that he suspected that some or all the information was illegally transferred but “made no effort to verify whether that was true,” the DOJ says. Between 2014 and 2018, the former JHL CEO personally used and instructed others to use the problematic Genentech documents, including for new JHL facilities.

After the criminal investigation had begun, Jordanov instructed employees using the Genentech materials to delete emails and related attachments from him, according to the DOJ.

RELATED: Genentech settles fight over cancer drug trade secrets with Taiwan's JHL

U.S. District Judge William Alsup will decide Jordanov’s and Lin’s sentences Dec. 7. The two face possible prison sentences and monetary punishments, the DOJ noted.

Back in 2019, Genentech and JHL settled a related civil case. Under the deal, the Taiwanese firm agreed to ditch the four biosimilar programs and destroy all related materials. After the scandal, JHL shuffled its leadership and rebranded as Eden Biologics, aiming to start with a clean slate while still maintaining a focus on biosimilars alongside its CDMO business.