INDIANAPOLIS (WISH) - Two former Eli Lilly scientists are accused of divulging $55 million in trade secrets to a rival Chinese pharmaceutical company, according to federal court documents unsealed late Tuesday.
Guoqing Cao and Shuyu Li were indicted August 14, accused of selling the secrets to Jiangsu Hengrui Medicine, a Chinese pharmaceutical company that works as a direct competitor of Eli Lilly.
Both Cao and Li were born in China, but became U.S. citizens several years ago, their attorneys said.
U.S. District Court Judge Mark Dinsmore ruled late Tuesday that both should be held without bond in the Marion County Jail until trial. Prosecutors sought the ruling by arguing that both men presented a flight risk to China if released.
According to court documents, Cao and Li, who both lived in Carmel at the time, copied trade secrets concerning proprietary information on diabetes, cardiology and cancer medication development to external hard drives. On multiple occasions, the two also traded emails containing the trade secrets with each other, another former Eli Lilly employee who is not named in the indictment and has not been charged, and representatives at Hengrui, prosecutors allege.
Prosecutors stopped short Tuesday of saying the two had directly profited from the information.
“But, it is the theft of proprietary and confidential, protected information,” said U.S. Attorney Joe Hogsett. “As you heard in the hearing today, that information has value to it. Whether or not there was an actual profit motive from either defendant is still being investigated.”
The information amounted to approximately 10 years of research that Lilly executives believe is worth around $55 million, according to testimony given in federal court Tuesday by Eli Lilly Senior Vice President of Research and Development William Heath.
“These drugs take millions and millions of dollars to develop,” said Hogsett. “Oftentimes, it takes a long time to have them developed. And, even after years and dollars developing, they do not necessarily pan out commercially. But, these are ideas that were created exclusively by Eli Lilly and protected for the benefit of Eli Lilly and its customers. The law is clear. If you have a trade secret, the law protects it, absent certain exceptions. None are present here. And, as a result, we intend to prove those allegations in open court at an appropriate time.”
Eli Lilly Senior Vice President Michael Harrington called the alleged thefts “appalling and disappointing,” and vowed to seek justice.
“Lilly will aggressively pursue every legal remedy to protect and safeguard its scientific discoveries,” Harrington said in a statement. “This includes assisting law enforcement in prosecuting and holding accountable those attempting to steal Lilly’s valuable research. The confidential information these former employees are accused of stealing relates to early stage clinical development of potential new medicines. While very serious, the theft does not significantly jeopardize our overall research and development pipeline. Lilly has always taken extensive measures to protect its intellectual property. These safeguards continue to be reined and adapted in light of an ever-changing threat landscape.”
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