Two co-founders of a Taiwan-based biotechnology firm were handed prison sentences on Tuesday for conspiring to steal trade secrets from Roche’s Genentech.
A San Francisco federal court sentenced Racho Jordanov, co-founder and former CEO of JHL Biotech, Inc. and Rose Lin, another co-founder COO, to one year and one day each in federal prison, according to the U.S. Attorney’s Office of the Northern District of California. They both pleaded guilty to conspiring to commit trade secret theft and wire fraud.
JHL Biotech, Inc., which last year changed its name to Eden Biologics, Inc., is a biopharmaceutical startup based in Zhubei City in Taiwan’s Hsinchu County. According to the plea agreement, between 2011 and 2019, Jordanov hired former Genentech employees who provided confidential and proprietary documents from the company to speed up and reduce the costs of making generic versions of Genentech products.
The documents provided by the former Genentech employees enabled JHL Biotech “to cheat, cut corners, solve problems, provide examples, avoid further experimentation, eliminate costs, lend scientific assurance, and otherwise help JHL Biotech,” according to the U.S. Attorney’s Office. Between 2014 and 2018, Jordanov personally used and instructed others to use Genentech’s confidential documents and information on its technology transfer procedures and processes to build a manufacturing facility in Wuhan, China.
In 2014, Lin arranged for Xanthe Lam, a principal scientist working full-time at Genentech, to secretly work as the head of formulation for JHL Biotech without signing a contract. Lin helped to conceal the fact that Lam was working for JHL Biotech by paying a consultancy fee through her husband, Allan Lam, and directing staff to communicate with Xanthe via Allan’s email.
The scheme ultimately helped JHL defraud the French pharmaceutical company Sanofi into a license agreement worth about $101 million. In December 2016, Jordanov and Lin entered into a collaboration agreement with Sanofi in China to create a biosimilar of the drug Rituxan. To obtain the $101 million agreement, JHL concealed trade secret theft and falsely claimed that its biosimilar activities did not violate the rights of other companies.