Ex-Genentech workers face theft charges
A former Genentech scientist and three former co-workers have been charged with stealing confidential drug formulas from the South San Francisco biotechnology giant and delivering them to a company in Taiwan to produce similar but cheaper products.
A federal grand jury indictment, unsealed Monday, charged Xanthe Lam, 66, a Genentech scientist from 1986 to 2017; her husband, Allen Lam, 68, a former quality control worker at Genentech, and former colleagues John Chan, 29, and James Quach, 58, with felony counts of stealing trade secrets and conspiracy.
All four pleaded not guilty Monday and were released on bond.
The indictment accused them of funneling Genentech formulas from 2012 through October
2017 to JHL Biotech, a Taiwanese company that develops and sells drugs known as “biosimilars.” Those are generic versions of pharmaceuticals that companies like Genentech market after approval by a government regulatory agency.
Allen Lam, Chan and Quach worked as consultants for JHL after leaving Genentech. Xanthe Lam has not worked for the Taiwanese company, but the indictment said she visited its facilities for four weeks in December 2013, and secretly downloaded Genentech documents to provide to her husband.
Xanthe Lam was also involved in JHL’s hiring of Chan in 2014, stayed in regular contact with him, and at one point provided a confidential Genentech document to him with the instruction, “Don’t show it to others,” the indictment said. It said she continued to download and transfer confidential information to JHL until Genentech dismissed her in the fall of 2017.
Genentech said it had reported the actions to federal prosecutors and cooperated in the investigation.
“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 company said.
William Osterhoudt, Xanthe Lam’s lawyer, said she is a respected scientist who holds a number of patents and is innocent of the charges.
She was “not working for a competitor” and “never realized a penny out of this supposed conspiracy,” Osterhoudt said. He contended the prosecution was “driven by Genentech, which is skeptical about these biosimilar startups .. which are able to produce wonder drugs, on which the patent has run out, at a lower cost.”