Extradited Scientist Found Guilty of Stealing GSK Secrets

Courtesy of Matt Rourke/AP/Shutterstock

Biochemist Yu Xue, Courtesy of Matt Rourke/AP/Shutterstock

Two years after Gongda Xue was extradited to the U.S. from Switzerland to stand trial for charges of stealing trade secrets from GlaxoSmithKline, the former scientist has been found guilty in a Philadelphia courtroom.

On Monday, Xue, who worked for Novartis affiliate Friedrich Miescher Institute for Biomedical Research and was a legal resident of Switzerland, was convicted of conspiracy to steal trade secrets, theft and wire fraud, the U.S. Department of Justice announced. Xue was part of a ring of Chinese researchers who were stealing confidential data from western pharma companies like GSK in order to kick start their own companies based in China.

Along with Gongda Xue, the Department of Justice has prosecuted his sister Yu Xue, a former GSK scientist linked to the Chinese startup Renopharma. Both Xue siblings conducted anti-cancer research for their respective companies, and both were illegally stealing data and sharing it with each other in hopes of using that information to support startup companies they both founded.

While Yu Xue was part of the Renopharma team, Gongda Xue had formed his own company, Abba Therapeutics, which was based in Switzerland, where he had been working. The government said both Renopharma and Abba were benefitting from ill-gotten research from both GSK and Novartis. According to the government, Gongda Xue stole FMI research into anti-cancer products and sent that research to his sister, Yu Xue.  She, in turn, took GSK research into anti-cancer products and sent that to Gongda Xue, the government said.

At FMI, Gongda Xue performed basic research for publication in journals. At GSK, Yu Xue performed research relating to that company’s anti-cancer drugs under development. Evidence presented at trial showed the defendant knew that GSK’s research could prove incredibly valuable and that it was proprietary and confidential. 

U.S. Attorney Jennifer Arbittier Williams condemned Xue for the theft of trade secrets.

“The lifeblood of companies like GSK is its intellectual property, and when that property is stolen and transferred to a foreign country, it threatens thousands of American jobs and disincentivizes research and development. Such criminal behavior must be prosecuted to the fullest extent of the law,” Williams said in a statement.

Xue’s conviction follows his sister’s 2018 guilty plea to a conspiracy charge that sent her to prison for eight months. Tao Li, another scientist accused of stealing intellectual property from GSK for Renopharma, also pleaded guilty in 2019. Li was a Renopharma director. Lucy Xi, another former GSK employee, also pleaded guilty to IP theft. Tian Xue, a sister to Gongda and Yu, pleaded guilty to a money-laundering conspiracy for agreeing to launder the financial gains Renopharma expected from developing cancer drugs based on the GSK research.

Yan Mei, another Renopharma director, remains a fugitive in China.

The U.S. government alleges Renopharma was supported by the Chinese government in its efforts to rebrand GSK-developed drugs for its own use. The government’s allegations are based on emails seized from Yu Xue’s computer, where she had identified two Chinese officials who would invest in Renopharma. Renopharma’s own internal projections showed the company could be worth as much as $10 billion based on the stolen GSK data, the Department of Justice said.

For the last several years, the U.S. government has warned of IP theft from agents of the Chinese government.  A 2017 report issued by the FBI noted that intellectual-property theft by China costs the U.S. as much as $600 billion annually.

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