After three of its former employees allegedly stole trade secrets for its oncology blockbusters, Roche's Genentech unit is running a full-court press in pursuit of justice. Now, one of the defendants charged with funneling those secrets to a biosimilar challenger will accept a reduced charge to aid federal prosecutors.
James Quach, a former Genentech employee among four defendants charged with stealing and sharing trade secrets on the drugmaker's cancer drugs with JHL Biotech, pleaded guilty Friday to a reduced misdemeanor charge after offering "superseding information" to the FBI.
Quach was one of three ex-Genentech workers, including former principal scientist Xanthe Lam and husband Allen Lam, charged by a federal grand jury in October 2018 with working with JHL staffer John Chan to funnel proprietary information on cancer blockbusters Rituxan, Avastin and Herceptin as well as cystic fibrosis med Pulmozyme.
All four previously pleaded not guilty to the charges before Quach's plea deal. The defendants face computer fraud and conspiracy charges that carry up to five years in prison.
In September, Genentech reached a settlement deal with JHL requiring the Taiwanese company “to abandon development of and destroy” all cell materials related to the cancer drug brands involved and stop using or sharing them in any way. To make sure JHL complies, Genentech has the right to unannounced checkups.
The Taiwanese firm agreed to "reimburse Genentech for its legal fees and the cost of its investigation, but will not otherwise pay any damages," the company said in a statement at the time.
After the grand jury leveled its charges in 2018, Genentech filed a civil suit of its own detailing the alleged scheme and seeking an injunction and damages. In addition to the four cited in the criminal suit, Genentech named former JHL co-chairman and CEO Racho Jordanov and co-founder and former Chief Operating Officer Rose Lin as defendants. Both have disappeared from JHL’s leadership team, with James Huang now acting as executive chairman and CEO.
In its retelling, Genentech said the Lams engaged in a "brazen" scheme to loot the drugmaker's secrets, eventually involving Quach, who was fired from Genentech in April 2017. In its suit, Genentech said Xanthe Lam gave Quach access to the company’s password-protected network from which he downloaded “hundreds of confidential manufacturing protocols and procedures.”
Calling the settlement “the best path forward for the company,” Huang said at the time the deal “removes the costs and uncertainty associated with protracted litigation.” Huang said the majority of the drugmaker's biosimilars pipeline, as well as its CDMO business, wouldn't be affected by the deal.