Settlement Reached in Genentech v. JHL Biosimilar Trade Secrets Case

On September 5, JHL Biotech announced that it has reached a settlement agreement with Genentech to resolve the parties’ lawsuit regarding JHL’s alleged misappropriation of trade secrets relating to Genentech’s Rituxan® (rituximab), Herceptin® (trastuzumab), Avastin® (bevacizumab), and Pulmozyme® (dornase alfa) products. As we previously reported, in October 2018, Genentech filed a civil suit against JHL and four former Genentech employees, alleging that the former employees had stolen and sold Genentech’s trade secrets to the Taiwanese company.  The district court entered a preliminary injunction against the defendants earlier this year.  While the financial terms of the settlement have not been disclosed, JHL states that it has agreed to “immediately forgo further development and clinical trials of products named in the settlement, other than as required for patient safety and compliance with applicable regulations[,]” and “will also reimburse Genentech for its legal fees and the cost of its investigation, but will not otherwise pay any damages.”  The settlement, however, “will have no impact on JHL’s ability to continue development of the remainder, and majority, of our biosimilar pipeline or on our ability to continue to expand our CDMO business.”  It has been reported elsewhere that the parties’ memorandum of understanding, which has yet to be executed as a formal settlement agreement also requires JHL to destroy all cell lines and cell banks associated with these products, and that Genentech will have the right to audit JHL to ensure continued compliance with the terms.

The alleged trade secret theft and other related claims are also the subject of a criminal case, scheduled for trial in April 2020.  Genentech’s civil lawsuit against the accused former employees, which remains pending, is postponed until the criminal case is resolved.