Corante

About this Author
DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

Chemistry and Drug Data: Drugbank
Emolecules
ChemSpider
Chempedia Lab
Synthetic Pages
Organic Chemistry Portal
PubChem
Not Voodoo
DailyMed
Druglib
Clinicaltrials.gov

Chemistry and Pharma Blogs:
Org Prep Daily
The Haystack
Kilomentor
A New Merck, Reviewed
Liberal Arts Chemistry
Electron Pusher
All Things Metathesis
C&E News Blogs
Chemiotics II
Chemical Space
Noel O'Blog
In Vivo Blog
Terra Sigilatta
BBSRC/Douglas Kell
ChemBark
Realizations in Biostatistics
Chemjobber
Pharmalot
ChemSpider Blog
Pharmagossip
Med-Chemist
Organic Chem - Education & Industry
Pharma Strategy Blog
No Name No Slogan
Practical Fragments
SimBioSys
The Curious Wavefunction
Natural Product Man
Fragment Literature
Chemistry World Blog
Synthetic Nature
Chemistry Blog
Synthesizing Ideas
Business|Bytes|Genes|Molecules
Eye on FDA
Chemical Forums
Depth-First
Symyx Blog
Sceptical Chymist
Lamentations on Chemistry
Computational Organic Chemistry
Mining Drugs
Henry Rzepa


Science Blogs and News:
Bad Science
The Loom
Uncertain Principles
Fierce Biotech
Blogs for Industry
Omics! Omics!
Young Female Scientist
Notional Slurry
Nobel Intent
SciTech Daily
Science Blog
FuturePundit
Aetiology
Gene Expression (I)
Gene Expression (II)
Sciencebase
Pharyngula
Adventures in Ethics and Science
Transterrestrial Musings
Slashdot Science
Cosmic Variance
Biology News Net


Medical Blogs
DB's Medical Rants
Science-Based Medicine
GruntDoc
Respectful Insolence
Diabetes Mine


Economics and Business
Marginal Revolution
The Volokh Conspiracy
Knowledge Problem


Politics / Current Events
Virginia Postrel
Instapundit
Belmont Club
Mickey Kaus


Belles Lettres
Uncouth Reflections
Arts and Letters Daily
In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

In the Pipeline

« Fun With Epigenetics | Main | The Research Works Act: One (Two!) Against and One For »

January 18, 2012

Selling Sanofi's Compounds on the Side

Email This Entry

Posted by Derek

Now here is an amazingly stupid move: a medicinal chemist at Sanofi (Yuan Li) downloaded a large set of proprietary compounds from the company's files, and founded another company on the side to sell them.

Strangely enough, someone at Sanofi noticed that their in-house compounds were appearing for sale at Abby Pharmtech, of Newark, Delaware. (Better take a look at that web site while you can). It is supposedly the US subsidiary of Xiamon KAK, of Xiamen, China. According to this criminal complaint (thanks to Pharmalot for the link), Sanofi found (in May and June of last year) 6,000 of their internal compounds showing up on SciFinder as available from Abby. A search of Li's computer at Sanofi showed all sorts of useful stuff - a listing of 144,000 compounds in a file called "Abby Pharmtech" (complete with internal Sanofi registration codes), tax forms showing her as a partner and co-founder of Abby (confirmed by IRS records), and so on.

The penalty? There's been a plea agreement (again, thanks Pharmalot), and sentencing is scheduled for April 23. There's a maximum potential prison term of 10 years, and a maximum fine of at least $250,000 - all that is up to the judge. This is in addition to restitution to Sanofi ($131,000) and a very high likelihood of immigration proceedings. It is safe to say that this master plan has not worked out too well.

What, just what, was this person thinking? How lucrative could this idea have possibly been, compared to the risks? And how could they have imagined that this would fly at all - that no one at Sanofi would ever notice that stuff from their own files and lab notebooks was now for sale? You just never know what people can get up to.

Comments (49) + TrackBacks (0) | Category: The Dark Side


COMMENTS

1. Tim on January 18, 2012 12:00 PM writes...

"What, just what, was this person thinking?"

I suspect that this person, due to cultural differences between Western and Asian societies, did not have full understanding that "theft of trade secrets" is a crime in the United States. This behaviour is business as usual in China and other places.

Permalink to Comment

2. chubbycheeks on January 18, 2012 12:02 PM writes...

Perhaps it's no surprise that the contact address for Abby Pharmtech shows up on Google Maps Streetview as a suburban residence. Ok, so here's the plan. I'll keep a file on my Sanofi work computer called "Abby Pharmtech", I'll file the IRS forms, AND I'll use my home address. No one will ever find out! Sheesh....

Permalink to Comment

3. IchDich on January 18, 2012 12:09 PM writes...

I like the "professional feel" of the website, e.g. how under the listed "pyrroles", there is not a single pyrrole, and the "search-button" is Chinese...

Permalink to Comment

4. You're Pfizered on January 18, 2012 12:23 PM writes...

You mean I can't do this?

Um, be right back. Got some computer file cleaning up to do....

Permalink to Comment

5. A Nonny Mouse on January 18, 2012 12:23 PM writes...

Reminds me of a European generics company that (some years ago) sold 10 tons of captopril into China. They had to supply a complete Drug Master File to the health ministry. It was the last that they sold and within 6 months there were several suppliers of the intermediates and these were using the company's internal reference code to sell them!

The company sent someone over to China to find out what was happening and they were told that they obviously did not understand the system and had not paid the ministry officials their bribe and so they had sold the information on to get their money!

Permalink to Comment

6. Fred McGriff on January 18, 2012 12:43 PM writes...

Occupy Pharma! This IS the 1% of compounds! The inequity that exists between classes of compounds is IMMORAL! Free Yuan!

Permalink to Comment

7. Anonymous on January 18, 2012 12:50 PM writes...

...........................and how is this different than how our "external partners" do it?

Permalink to Comment

8. PDF on January 18, 2012 12:57 PM writes...

Another funny thing in their website is the missing bonds in several molecules as well as hydrogen atoms in amines and alcohols groups. How can we expect them to respond to “tough R&D challenges” if they don’t even bother to correctly draw chemical structures. These cultural differences to explain theft of trade secrets doesn´t convince me anymore. It’s just common sense that you should not steal anything under any condition. Sadly we will keep hearing news like this about chinese stealing intellectual property ,not just by hacking but even under our noses. How can they so easily get away? Yes, she was caught but the damage is already done.

Permalink to Comment

9. Curt F. on January 18, 2012 1:00 PM writes...

Assuming Yuan is not an American citizen, would the prosection be more likely to ask for jail time in a case like this, or just to seek immediate deportation?

Permalink to Comment

10. Curt F. on January 18, 2012 1:08 PM writes...

I found a LinkedIn profile of a Yuan Li that works at Sanofi. Feel free to contact them if you are interested in finding someone who has a specialty as an "operation liaison".

Permalink to Comment

11. processchemist on January 18, 2012 1:23 PM writes...

Not so smart, Yuan. The smart move (a widely validated procedure) was to go back to China and start there this abby thing, But I don't think this means there's a cultural issue with China. Fore sure this story tell us that stupids have a chance of employement in big pharma.

Permalink to Comment

12. luysii on January 18, 2012 1:39 PM writes...

I practiced for a few years near a large state prison, and saw a prisoner every few weeks or so. There weren't any Dr. Moriarity's among them. Most seemed dull, with only 10% having even normal intelligence. Perhaps it was the prison environment that did it to them, but more likely they were all as dumb as Yuan Li.

What does this say about how much smarts you need to be a medicinal chemist? As my late grandmother said to me when I was giving her lip at age 16 -- "You're so smart, you're dumb".

Permalink to Comment

13. cynical1 on January 18, 2012 2:12 PM writes...

According to the criminal complaint, she put up compounds on their website that had not been disclosed or patented but were being developed. Does this still count as public disclosure then? Once your structure is out there on a website, it's in the public domain right? So can Sanofi even patent these compounds now that they were published on the site or are they protected since it was an illegal disclosure by an employee with a brain the size of a chickpea?

Permalink to Comment

14. Curious Wavefunction on January 18, 2012 2:22 PM writes...

So she had a folder on her computer explicitly named "Abby Pharmtech"? She seems to be an embarrassment not just to pharma employees but to all self-respecting IP thieves.

Permalink to Comment

15. Lu on January 18, 2012 2:27 PM writes...

1. Tim on January 18, 2012 12:00 PM writes...
I suspect that this person, due to cultural differences

Aha! This explains why every time I place an order with Genscript I get emails from LifeTein to get the same stuff cheaper

Permalink to Comment

16. Hap on January 18, 2012 2:34 PM writes...

How do people sell books or newspapers in China? I mean, they're not really property, no? I somehow think that if I tried to sell my boss's books for my own profit in China, or copy and sell my own, I'd be lucky if fired was all that I was.

I don't really think this is a "cultural misunderstanding of intellectual property" issue, but a "I was stupid and greedy and didn't think I'd actually get caught" issue.

Permalink to Comment

17. anonimous on January 18, 2012 2:53 PM writes...

Touche!!

From a former Soviet

Permalink to Comment

18. Trityl Group on January 18, 2012 2:57 PM writes...

The Abby Pharma web site is priceless. Especially their "About Us" page:
“We provides a broad line of products and services which parallel the drug discovery in pharmaceutical and biotechnology R&D.”

Yep, "parallel"...

Permalink to Comment

19. wwjd on January 18, 2012 3:02 PM writes...

@ cynical1

I believe it would be considered public disclosure of the composition of matter (it showed up in a Scifinder search), but you should still be able to get patents on the method of use and pharmaceutical preparation of the compound since uses were not disclosed.

Permalink to Comment

20. MoMo on January 18, 2012 3:05 PM writes...

More evidence that communism is eroding our purity of essence.

But the Gods of Pharma are smiling on this one, at least Sanofi stood up to this erosion, although they may miss an opportunity to actually do something with their compounds.

Permalink to Comment

21. Just sayin' on January 18, 2012 3:27 PM writes...

I looked up Yuan Li's LinkedIn profile (at least I think it was the correct one) before it got redacted...what a waste of a career! At age 29 she was already an "operations manager/research investigator" at Sanofi despite having only an M.S. (sorry, I didn't mean to sound condescending). Even if she were laid off from Sanofi, her youth and impressive credentials would've been advantageous in finding a new job, especially in China.

Permalink to Comment

22. John on January 18, 2012 4:22 PM writes...

Her Linkedin file is not available. Someone got a backup?

Permalink to Comment

23. Dylan on January 18, 2012 4:29 PM writes...

"and a maximum fine of at least $250,000"

Not to be pedantic, but which is it?

Permalink to Comment

24. Dickweed Jones on January 18, 2012 4:45 PM writes...

@13 and 19
I wouldn't be too concerned about patents. If this collection of compounds is representative of Sanofi's corporate database, they are in far bigger trouble than we thought.

Permalink to Comment

25. milkshake on January 18, 2012 5:29 PM writes...

I think she is paying the hefty restitution to Sanofi not only to cover legal expenses but also to repay the development cost of four intermediates that are included in database and which Sanofi has been reportedly developing. If the compounds were new and unpublished and if they were important intermediates in making active drug substance, Sanofi could have them patented in the future as a composition of matter as to deter generic manufacturers after the active drug substance patent expiration.

It is hard to put figure on (potential) future losses and I presume the Sanofi lawyers were angry and the initial figure reported to FBI was higher. The plea bargain includes a 130k settlement with Sanofi so I suppose the amount was negotiated down a bit. This case has been going on for a while and she seems to have a competent legal representation unlike the dude nailed by Frontier Scientific recently, for stealing their procedures for his brother in law in India - that industrial espionage case is going on trial next month and he has a public defender, and a case that is in many respects worse...

Permalink to Comment

26. KW's hairdresser on January 18, 2012 5:31 PM writes...

Oh! Say it aint so, Joe! Theft of IP from Chinese scientists! I be shocked!

I once worked with a guy who was running a import/export business right from the lab (the contraparty being China..in case you are wondering). He got busted because he was using the lab phone to conduct "business" and racked up a bazillion in phone charges.

The whole industry is such a joke!

Permalink to Comment

27. @22John on January 18, 2012 6:10 PM writes...

Perform a Google(TM) Search, then look at the cached file, which may pop up to the right of the search result.

Permalink to Comment

28. curious on January 18, 2012 6:24 PM writes...

Would any ex-Sanofi folks from the Bridgewater site care to comment or dish out details about this epic failure in industrial espionage?

Permalink to Comment

29. Jean-Luc Picard on January 18, 2012 6:28 PM writes...

Copied verbatim (misspellings and whatnot) from Abby Pharmtech's website:

Instructions for First-time Customer If this is the first time you place an order with us, please contact us first to set up an account.
Please provide:
a signed purchase order form (requested via phone or email),
your shipping and billing address,
customer name and contact information (phone number, fax numbers and email address).
Payment Methods
We accept checkes, money orders and wire transfers.
For checks or money orders. Please make it payable to Abby Pharmatech.
For wire transfers, please call us for our bank information.

Permalink to Comment

30. don't worry on January 18, 2012 6:29 PM writes...

IP loss?Joke! Read the following news from Wall Street Journal:

The U.S. is rapidly losing high-technology jobs as American companies expand their research-and-development labs in China and elsewhere in Asia, the National Science Board said Tuesday.

Global, U.S.-based companies such as 3M Co., Caterpillar Inc. and General Electric Co. have spent billions of dollars in recent years to expand their overseas research labs. Such companies aim to tap a broader pool of scientific talent, tailor products to overseas markets and curry favor with foreign governments by doing more research abroad.

3M is expanding labs overseas "in preparation for a world where the West is no longer the dominant manufacturing power," ...

Permalink to Comment

31. UKPI on January 18, 2012 6:50 PM writes...

Abby Pharma offers 'Customer synthesis'...I'll have some of that!

Permalink to Comment

32. Sheri on January 18, 2012 6:58 PM writes...

"What, just what, was this person thinking?"

Yeah, I couldn't tell the gender of this person either.

Yuan anybody?

Permalink to Comment

33. Anonymous on January 18, 2012 7:09 PM writes...

Interesting but not entirely surprising. China doesn't respect US intellectual property much and this is just an example of an outcome. Here's the PDF of the criminal complaint that was filed.

http://www.justice.gov/usao/nj/Press/files/pdffiles/2012/Li,%20Yuan%20Information.pdf

Permalink to Comment

34. Anonymous on January 18, 2012 7:24 PM writes...

I'd bet she may be now regretting the pursuit of US citizenship. 10 yrs max. in the slammer argggh...not going to be fun especially in NJ. It could be worse..if the crime was done in Essex or Passaic counties in NJ. You know what I'm talking about...

Permalink to Comment

35. CR on January 18, 2012 8:04 PM writes...

Interesting that I received an email from LinkedIn that one of my contacts has a change in Profile "Headline". That would be Ms. Yuan Li and the headline was changed to "blank". LInkedIn moves fast once information is on the internets.

Permalink to Comment

36. Recdep/Minirec on January 18, 2012 10:02 PM writes...

Apparently Ms. Yuan Li has become an unperson (or, in TronSpeak, derezzed) on LinkedIn.

Permalink to Comment

37. Indy on January 18, 2012 10:52 PM writes...

Here's a good news on this with a bit more specs.

http://www.nj.com/news/index.ssf/2012/01/former_nj_research_chemist_ple.html

Permalink to Comment

38. Ricardo Rodriges on January 19, 2012 5:59 AM writes...

This happens in a daily basis ... I am surprised people are surprised.

Permalink to Comment

39. anchor on January 19, 2012 8:07 AM writes...

So we all concur that it was stupid of her to do what she did. I take comfort in the fact that she was caught and the long arm of the justice system here in the USA prevailed and all ended peacefully! My point was, with outsourcing in full sway to China and India, what would have happened if this incidence happened in these two countries? What if some Chinese national in China was pilfering the structure/intermediate at the outsourced facilities of Sanofi-Aventis (or any other multinational company for that matter) site in China to the Chinese companies, based in China? Knowing what we know about the judicial system in China, Sanofi would have packed off with empty hand or am I wrong in my thinking? Similar thing happened to German firm (Siemens?) that was booted out, before China revealed to the Globe its version of bullet train. When it comes to China (or India) it is loose-loose situation.

Permalink to Comment

40. Mark on January 19, 2012 9:26 AM writes...

Sanofi is a French company. Does any French blame outsourcing to the US?

Permalink to Comment

41. chirality on January 19, 2012 10:00 AM writes...

#39
"it is loose-loose situation."
I couldn't say it better. On second thought, I actually could.

Permalink to Comment

42. MOM on January 19, 2012 10:16 AM writes...

So I guess Sanofi has one job opening now?

Permalink to Comment

43. HelicalZz on January 19, 2012 12:16 PM writes...

#13,

My first thought also was about 'disclosure' and potential for loss of IP. Throw the book at Yuan Li (but probably don't use the Aldrich catalog).

Zz

Permalink to Comment

44. anonymous on January 19, 2012 8:28 PM writes...

@42 Mom:
Have you considered a (second) career in comedy????
Brillant comment!!! Kudos.

Permalink to Comment

45. Anonymous on January 19, 2012 10:22 PM writes...

Pig Pharma is not loyal to the employees that generate the IP that generates the revenue. So what is surprising about employees who are not loyal to Big Pharma?

Doesn't make it right, but its not surprising at all.

Permalink to Comment

46. anonymous on January 20, 2012 11:34 PM writes...

@44:

If you're going to make sarcastic remarks, at least spell all the words correctly...

Permalink to Comment

47. cliffintokyo on January 21, 2012 8:38 AM writes...

Probably some house-cleaning at Sanofi US coming up, followed by redundancies in the HR Dept...
is there any point in having a company ethics code if you are going to employ ayshans, however 'smart' they appear to be?
FBI on site at pharma R&D centers in the future, anybody?

Permalink to Comment

48. @47 cliffintokyo on January 22, 2012 3:57 PM writes...

Dude, what's your beef with "Ayshans" anyway? Don't you know that greedy white folks are the ones selling out pharma and other industries in the West? At least Abby Pharmtech will give you a free order of crab rangoons if you buy enough compounds!

Permalink to Comment

49. kj on May 16, 2012 11:16 AM writes...

I'm actually in the IP/IS field. This doesn't even rank in the top 100 stupidest IP theft schemes I've dealt with...

Permalink to Comment

POST A COMMENT




Remember Me?



EMAIL THIS ENTRY TO A FRIEND

Email this entry to:

Your email address:

Message (optional):




RELATED ENTRIES
XKCD on Protein Folding
The 2014 Chemistry Nobel: Beating the Diffraction Limit
German Pharma, Or What's Left of It
Sunesis Fails with Vosaroxin
A New Way to Estimate a Compound's Chances?
Meinwald Honored
Molecular Biology Turns Into Chemistry
Speaking at Northeastern