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

Genentech
Roche's Genentech has reached a settlement with JHL Biotech over allegations that the latter stole trade secrets to make copycats of its top-selling cancer drugs. (Genentech)

Genentech has called a truce with Taiwanese biosimilar firm JHL Biotech, which allegedly stole trade secrets to help it develop copycats to top-selling cancer drugs.

The Roche unit said the settlement requires JHL “to abandon development of and destroy” all cell materials related to the cancer drug brands involved—namely Rituxan, Herceptin, Avastin and Pulmozyme—and stop using or sharing them in any way. To make sure JHL complies, Genentech has the right to unannounced checkups.

According to an announcement JHL just posted, the Taiwanese firm “will reimburse Genentech for its legal fees and the cost of its investigation, but will not otherwise pay any damages.”

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“We expect to execute the formal settlement agreement in due course,” Genentech said.

Making peace with the company without any cash payments for punishment’s sake could mean Genentech is now shifting focus to the individuals involved.

The case first erupted last October, when a federal grand jury indicted former Genentech employees and an ex-JHL staffer for conspiring to steal trade secrets for JHL. Three ex-Genentech workers—former principal scientist Xanthe Lam, her husband Allen Lam and James Quach—allegedly worked with John Chan on the JHL side to funnel proprietary information. All four have pleaded not guilty to the charges.

Genentech soon filed a civil suit of its own detailing the alleged scheme and seeking an injunction and damages. In addition to the four people cited in the criminal suit, Genentech also 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 taking the lead as executive chairman and CEO.

RELATED: Citing 'brazen' trade secrets theft, Genentech sues indicted ex-employees and biosim maker

Xanthe Lam had been employed at Genentech for more than 30 years before leaving in 2017, according to Genentech. The company accused her of collecting confidential Genentech documents to help improve JHL’s documentation and processes for developing biosimilars.

“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,” Genentech’s general counsel Sean Johnston said in a statement. “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.”

Calling the settlement “the best path forward for the company,” JHL’s Huang said it “removes the costs and uncertainty associated with protracted litigation.” He insists that the majority of its biosimilar pipeline, as well as its CDMO business, won’t be affected.

After ceasing development of those Genentech copycats, JHL doesn’t have any clinical biosim candidates, according to its website. Its remaining preclinical assets include knockoff versions of Novartis’ asthma drug Xolair, Roche’s HER2 breast cancer drug Perjeta (which apparently is not implicated in the settlement), Amgen’s bone drug Prolia and Bristol-Myers Squibb’s CTLA-4 immuno-oncology agent Yervoy, among others.

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