Taiwan’s JHL to terminate biosimilars programs in Genentech trade secret settlement

JHL Biotech and Genentech have settled a civil suit involving allegations that the Taiwanese start-up stole the Roche unit’s trade secrets.

Under terms of the settlement, JHL Biotech Inc. (Zhubei, Taiwan) has agreed to “abandon development of and destroy all cell lines and cell banks associated with Genentech’s medicines Pulmozyme, Rituxan, Herceptin and Avastin, and cease from disclosing, using or sharing any confidential Genentech information in any way in its business,” according to Genentech’s description of a memorandum of understanding between the two companies.

JHL will reimburse Genentech for legal fees and the cost of its investigation, “but will not otherwise pay any damages,” James Huang, JHL executive chairman & CEO, said in a statement.

Genentech portrayed the settlement as a vindication of its assertions that a former employee, Xanthe Lam, stole and transmitted to JHL confidential Genentech documents relating to formulation development and raw material management. Acting on instructions from the FBI, Genentech monitored Lam’s activities for a year before she left the company to join JHL (see “Trading Blows Over Trade Secrets” & “Judge Skeptical of JHL’s Defense”).

“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,” Sean Johnston, Genentech’s SVP, general counsel and chief compliance officer, 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 who act with integrity and in the best interests of patients every day.”

The settlement with JHL does not affect Genentech’s pending civil suit against Lam and three other JHL employees: her husband, Allen Lam; James Quach; and John Chan. A criminal case is also pending in the U.S. District Court for the Northern District of California against the same individuals.

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