Former Lilly employees accused of selling secrets to Chinese company

TheIndyChannel Indianapolis – Two former Eli Lilly and Company employees are accused of stealing millions of dollars’ worth of secret research data about key drugs and funneling the information to a Chinese company.

Federal prosecutors say Guoqing Cao and Shuyu Li were senior researchers at Lilly who also had ties to a major Chinese drug producer located in Shanghai.

An indictment accuses them of stealing confidential information on drugs in Lilly’s research pipeline to treat cancer, diabetes and cardiovascular diseases.

Investigators say the pair illegally directed the trade secrets to the Chinese company, damaging Lilly to the tune of $55 million . . .

. . . .  A Lilly official identified the drugs at the heart of the case as among the company’s prospective crown jewels, although defense attorneys called that evaluation overblown. . . (read the rest)

Lilly scientists stole $55 million in trade secrets, indictment alleges (Indianapolis Business Journal)

Three former employees of Eli Lilly and Co. allegedly transferred trade secrets that Lilly values at more than $55 million to a competing Chinese drug company, according to an indictment unsealed Tuesday in federal court.

The indictment charges two Carmel residents, Guoqing Cao and Shuyu Li, with seven counts of theft and conspiracy to commit theft. It also describes the actions of a third man, referred to only as Individual #1, who also played a part in the alleged crime.

According to the indictment, Cao and Li, both of whom are scientists with doctoral degrees, e-mailed sensitive information about nine experimental drug research programs at Lilly to Individual #1, who is employed by Jiangsu Hengrui Medicine Co. Ltd., based in China.

U.S. Attorney Joe Hogsett and his deputy, Cynthia Ridgeway, characterized the alleged theft as a crime against the nation.

“If the superseding indictment in this case could be wrapped up in one word, that word would be ‘traitor,’” Ridgeway argued before Magistrate Judge Mark J. Dinsmore on Tuesday.

“Stolen trade secrets account for billions of losses for American companies throughout our nation,” Hogsett told reporters outside the federal courthouse downtown. . . (read the rest)

2 former Eli Lilly scientists indicted on charges of stealing trade secrets (Indianapolis Star)

Two former Eli Lilly and Co. scientists have been indicted by a federal grand jury on charges of stealing drug discovery trade secrets and passing them on to a competitor in China.

The indictment, unsealed Tuesday, charges that the two senior biologists stole nine trade secrets from 2010 to 2012 having to do with cancer, cardiovascular disease and diabetes research being done by Lilly.

An assistant U.S. attorney, Cynthia Ridgeway, told a federal judge that the actions by the two former scientists amount to traitorous behavior.

But in a preview of what could be a hard-fought legal case, an attorney for one of the defendants called the government’s case “over-reach” and questioned the value to Lilly of the information alleged to have been stolen.

The two bespectacled scientists, cuffed and manacled and wearing black-and-white striped prison jumpsuits, listened to the two-hour court proceedings without saying a word. A judge ordered them held in custody, refusing to release them on bail.

The 20-page indictment says that Guoqing Cao and Shuyu “Dan” Li, who are both Indianapolis-area residents, passed on the proprietary Lilly information to Jiangsu Hengrui Medicine Co. in Shanghai, one of China’s largest drug companies.

Jiangsu Hengrui competes with Lilly in China and recently won approval to market an injectible drug in the United States.

Both Cao and Li are Chinese nationals who earned Ph.Ds in the United States and became U.S. citizens. Both took jobs at Lilly as senior biologists. They were arrested Oct. 1. . . . (read the rest)

Two accused of divulging Eli Lilly secrets to Chinese company (WISH TV)

. . . . 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.” . . . (read the rest)