Former biotech CEO from Rancho Santa Fe charged in trade secret theft scheme

Two co-founders of a Taiwan-based biotech company, including a Rancho Santa Fe resident, have been indicted in an alleged years-long scheme to steal trade secrets from Genentech that allowed them to accelerate manufacturing of generic versions of Genentech’s top cancer treatments.

The criminal charges handed up from a federal grand jury in San Francisco allege Raco Jordanov, 73, and Rose Lin, 72, were involved in a scheme to steal reams of Genentech documents detailing complex, proprietary drug manufacturing protocols and procedures.

Lin and Jordanov then used that intellectual property and standard operating procedures to open a rival biologics and cell-cloning manufacturing company — JHL Biotech.

Using Genentech’s intellectual property, JHL was able to reduce costs and accelerate timelines for making generic versions of Genentech biologics, including Rituxan, Herceptin, Avastin and Pulmozyme, according to the indictment.

Jordanov of Rancho Santa Fe is the former chief executive of JHL Biotech. Lin of South San Francisco is the ex-chief operating officer. Both pleaded not guilty Wednesday, July 7, in a federal court in Northern California. They are free on bail.

Founded in 2012, JHL Biotech was headquartered in Taiwan with offices in Wuhan, China, and Rancho Santa Fe. Today, it’s known as Eden Biologics. The company changed its name in February.

The indictment alleges that dating back to 2009, Lin recruited an accomplished Genentech scientist and her husband to steal confidential information from within Genentech. Others also were allegedly involved over the years.

About two years ago, four other people were charged in the scheme — including the husband and wife allegedly recruited by Lin. At least one of these people has pleaded guilty to lesser charges.

Genentech sued JHL Biotech following discovery of the alleged theft. The companies settled last year, with JHL agreeing to destroy all cell lines and other materials related to Genentech, as well as pay its legal and investigation costs.

The indictment alleges that Jordanov and Lin defrauded investors and strategic partners in JHL Biotech of over $100 million. The company was publicly traded on the Taiwan Stock Exchange. At its peak, the company had a market value of $916 million. But following the public disclosure of the alleged trade secret scheme, the value of the company plummeted

“According to the indictment, JHL Biotech was a nearly $1 billion Taiwanese unicorn built on a foundation of lies,” said Acting U.S. Attorney for Northern California Stephanie Hinds. “The indictment alleges defendants used confidential documents and trade secrets stolen from Genentech to build a competitor and enrich themselves.”

The indictment charges Jordanov and Lin with conspiracy to steal trade secrets, wire fraud, international money laundering, conspiracy to obstruct justice and related charges.

The Internal Revenue Service’s Criminal Investigations unit and the FBI led the investigation.

— Mike Freeman is a reporter for The San Diego Union Tribune