Trade secrets case sees biotech shutdown biosimilar production

The case emerged last year​, after an internal investigation conducted by Genentech, a subsidiary of Roche, concluded that Taiwanese company, JHL Biotech, had illegally obtained trade information in the development of its biosimilar pipeline.

It was announced at the end of last week that JHL and Genentech had reached a settlement agreement whereby the former company forfeited its development of biosimilars related to the case.

Genentech had accused JHL of conspiring with its former employees in the development of biosimilars to Rituxan (rituximab), Pulmozyme (dornase alfa), Herceptin (trastuzumab), and Avastin (bevacizumab).

With the announcement of a settlement agreement​, JHL confirmed that it would resolve Genentech’s civil claims by ceasing the development and clinical trials of biosimilar rivals to these products.

In addition, JHL will reimburse Genentech’s legal fees and the cost of its internal investigation but noted that it would not pay any damages.

In a statement, JHL’s CEO, James Huang, said, “We are pleased to have resolved these claims and put this chapter behind us. JHL remains well-positioned to capture growing market opportunities and implement our long-term strategic plan for sustainable growth, including focusing on executing the rollout of our biosimilar pipeline and the global expansion of our CDMO (contract development and manufacturing organization) business.”​

The decision leaves JHL’s pipeline with six pre-clinical biosimilar products. Previously, JHL had taken its biosimilars to Genentech’s products through to the authorization of Phase III clinical trials.

Cody Harris, a partner at Keker, Van Nest & Peters, which represented Genentech in the case, added, “Unlike the usual settlement, which brings work to a close, this one kicks off an extremely active phase in the case, in which we will thoroughly investigate JHL’s misconduct, ensure compliance with the settlement, and continue pursuing Genentech’s claims against the remaining individual defendants.”​

Manufacturing process at heart of case​

In October 2018, it was announced that four individuals alleged to be involved in the case had been charged with theft of trade secrets​.

The individuals involved, Xanthe Lam, Allen Lam, John Chan, and James Quach, all of whom are former Genentech employees, are charged with stealing confidential Genentech information to help JHL create biosimilar rivals.

Regarding the nature of the trade secrets allegedly stolen by former employees, Genentech’s case file against the company states, “JHL misappropriated Genentech’s proprietary protocols and systems for quality risk management; environmental control in its manufacturing facilities; calibration, validation and maintenance of manufacturing equipment; facility-wide testing, set-up and maintenance; and systems for document management and data integrity.”​

According to the case filed by Genentech, this allowed JHL to progress biosimilars ‘at lightning speed’ and allowed it to sign a partnership deal with Sanofi​ to commercialize a Rituxan biosimilar.