CSL: Former exec stole 'thousands' of secret files before joining rival Pharming

CSL says a former executive left for competitor Pharming with thousands of confidential documents. (Pixabay)

CSL has made strides in hereditary angioedema with Haegarda and other meds, but now the company says a competitor could get a leg up thanks to a former exec who allegedly stole thousands of proprietary documents.

In a Pennsylvania lawsuit earlier this month, CSL sued former exec Joseph Chiao for stealing key info on his way to Pharming, which markets Ruconest to treat angioedema attacks in patients with HAE. Chiao started talking with Pharming about potential employment in April, and by September, the competitor had offered him a job, CSL says. 

The former CSL exec turned in his resignation on September 23, but in the days before, he emailed to his personal account “highly sensitive, proprietary company information and trade secrets,” according to CSL's lawsuit. He also saved info on a USB drive, CSL says. 

Pharming “categorically denies having had any involvement in the alleged abstraction of proprietary information by Dr. Joseph Chiao from his former employer CSL," it said in a statement. But while it hasn't "received or seen" any confidential CSL info, it's suspended Chiao for the time being. The court has also issued an injunction so CSL can investigate the issue, Pharming says. 

RELATED: CSL chief says Haegarda launch timing, pricing were right on target 

CSL alleges Chiao stole marketing plans, medical affairs strategies, therapy outcomes, data, high-level business strategies and more. Chiao joined CSL in 2016 and in 2019 the company promoted him to an executive position within its medical affairs outfit. 

“Plainly, CSL Behring viewed Chiao as an important member of its HAE medical team, and it expected that he would honor his contractual and fiduciary duties to his employer,” the company said in the lawsuit. “Unfortunately, Chiao appears to have had other designs, both for himself and for the confidential material to which he had access as a CSL Behring employee.” 

During Chiao’s discussions with Pharming personnel, the CSL exec “appeared very willing,” to share the company’s trade secrets, the lawsuit says, citing text messages.  

After Chiao left, CSL investigated and found that he sent 68 emails to his personal account during his last month at the company. Most were on the Friday before his Monday resignation. He also copied 60 folders to a portable USB drive, the drugmaker said. 

Asked about the lawsuit at CSL’s recent annual meeting, CEO Paul Perreault said “it’s basically a case that’s in litigation or soon to go under litigation, and it was caught by our cybersecurity,” according to the Sydney Morning Herald.  

RELATED: Amid next-gen vaccine race, Merck says ex-employee bolted to Pfizer with 'thousands' of key documents 

Trade secrets lawsuits have cropped up recently involving some of the biggest players in pharma. Merck has accused a former executive of heading to rival Pfizer with “thousands” of documents as the drugmakers race to enter the next-gen pneumococcal vaccines market, which is expected to be worth billions of dollars. Pfizer is moving to dismiss and said the lawsuit is “the latest salvo in Merck’s years-long effort to challenge Pfizer’s pneumococcal conjugate vaccine patents.”

Roche's Genentech last year sued Taiwan’s JHL, arguing former employees downloaded confidential information to an external hard drive to help the company develop biosimilars to a Genentech blockbuster. The companies inked a settlement under which JHL will stop developing potential rivals and pay for Genentech’s legal expenses and investigation costs.

Additionally, Teva previously sued a former executive of providing her boyfriend—who was then-CEO at rival generics maker Apotex—with trade secrets. The companies settled in April 2018.