Two Former AllCells Employees Allegedly Took Confidential Info to Launch Cepheus Biosciences

January 23, 2017
By Alex Keown, BioSpace.com Breaking News Staff

SAN FRANCISCO – Bay Area’s AllCells LLC has filed a lawsuit against two former employees alleging they used confidential trade secrets to launch startup Cepheus BioSciences.

The complaint, filed in December in the U.S. District Court for the Northern District of California, alleges Jack Zhai and James Lee downloaded large amounts of data from AllCells, according to a report in the Northern California Record. The complaint alleges Zhai and Lee left with data that contained trade secrets and confidential information prior to leaving the company—in violation of the employee confidentiality agreement. They in turn used that data to launch Cepheus, according to the complaint. The company said it takes “substantial measures to protect its confidential information” and that both men were required to sign confidentiality agreements during their time employed at AllCells.

Not only does the complaint allege the two men use AllCells proprietary information to start a company, but it further says Cepheus has been soliciting AllCells’ customers as well.

Cepheus specializes in “in human primary cells derived from human normal and diseased blood, plasma and serum, which are used in preclinical aspects of drug discovery such as target discovery, validation, lead optimization, and toxicity testing,” according to the company website. Cepheus said its products “have been used in preclinical aspects of drug discovery such as target discovery, validation, lead optimization, and toxicity assays.”

The company has offices in both northern California and the Boston area. On its website, Cepheus indicates it holds integrity in high regard as part of corporate values.

“We are consistently open, honest, ethical and genuine,” the company said on its website.

AllCells is seeking a trial by jury, the Record reported.

While AllCells is battling its former employees, the company is also expanding. Based in Alameda, Calif., this morning AllCells announced it had expanded a second collection facility in Quincy, Mass. The clinic has started screening, qualifying, and accepting donors for fresh whole blood collections. In addition to fresh whole blood collections, the Quincy site will soon be expanding its fresh tissue collection capabilities to include leukapheresis - a process involving enrichment of white blood cells (leukocytes), whole bone marrow aspiration, and donor mobilization, the company said in its statement. Additionally, the Quincy site will serve as a secondary inventory location to provide cryopreserved isolated primary cell products such as stem/progenitor cells, PBMCs (peripheral blood mononuclear cells), T-cells, monocytes, B-cells, neutrophils, basophils, eosinophils, NK cells and others to regional clients, the company said.