PHILADELPHIA – United States Attorney Jennifer Arbittier Williams announced that Gongda Xue, 52, a legal permanent resident of Switzerland and citizen of China, was convicted after trial of charges related to his participation in a conspiracy to steal trade secrets from GlaxoSmithKline (GSK) to benefit a Chinese pharmaceutical company named Renopharma.
Xue worked as a scientist at the Friedrich Miescher Institute for Biomedical Research (“FMI”) in Switzerland, which is affiliated with Novartis. His sister, Yu Xue, worked as a scientist at GSK in Pennsylvania. Both the defendant and his sister conducted research on potential anti-cancer treatments as part of their employment at these companies. Evidence presented at trial showed that the defendant knew that this research could prove incredibly valuable.
While working for their respective entities, the defendant and his sister both secretly formed their own companies in the hopes of profiting from their anti-cancer research for Novartis and GSK beyond their official compensation; Gongda Xue created Abba Therapeutics AG and Yu Xue and her associates formed Renopharma, Ltd. Yu Xue stole hundreds of GSK documents which contained GSK research into anti-cancer products and provided them to her Renopharma co-conspirators. Yu Xue and co-conspirators then re-branded these GSK products under development as Renopharma products and attempted to sell them for billions of dollars. Renopharma’s own internal projections showed that the company could be worth as much as $10 billion based upon the stolen GSK data.
The government showed that the defendant and his sister had a close relationship and repeatedly shared information. Yu Xue provided the defendant with documents which contained GSK confidential and trade secret information regarding the development and manufacturing of certain anti-cancer drugs. According to scientific expert witnesses who testified during the trial, these documents would be extraordinarily helpful to someone like the defendant who was in the process of forming his own biopharmaceutical company. Further, the defendant helped Renopharma by performing some research for it, while his sister assisted the defendant by performing computer modeling for his company. Knowing the illegal nature of his work, Gongda Xue agreed to destroy the results of the testing he performed for Renopharma.
Fortunately, the FBI was able to shut down the conspiracy and arrest the perpetrators before the stolen GSK information could be significantly monetized.
Yu Xue, her sister Tian Xue, and two other co-defendants who together with Yu Xue established Renopharma, Lucy Xi and Tao Li, have all pleaded guilty for their roles in this conspiracy. Yan Mei is a fugitive who currently resides in China.
“This defendant illegally stole trade secrets to benefit companies controlled by himself and his sister, both of which were financed by the Chinese government,” said U.S. Attorney Williams. “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.”
“When a company like GSK spends billions on research and development to bring new drugs to market, the theft of valuable trade secrets poses a significant operational threat,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “When those secrets are stolen on behalf of a global adversary, it also endangers the security of our nation and the stability of our economy. The FBI will continue to bring all our investigative resources to bear to hold accountable criminals like Xue and his codefendants who steal intellectual property to benefit themselves and the Government of China. Our relationships with private sector partners like GSK are critical to disrupting such costly activity and bringing those responsible to justice.”
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Robert J. Livermore and J. Jeanette Kang.