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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: Twitter: Dereklowe

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October 10, 2013

A Leak at Lilly

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Posted by Derek

The Indianapolis Business Journal has reported that two ex-Lilly employees have been indicted on charges of stealing trade secrets:

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.

The story is puzzling in its details. These were apparently all "early stage" results across several therapeutic areas, which is hard to figure. If the information was from too early a stage, one wonders what the Jiangsu Hengrui Medicine Company would be able to make out of them, without spending a big pile of its own money, which I presume was not the plan. The article attaches a figure of $55 million to what was stolen, but I have absolutely no idea of how that was calculated. That must be a rough estimate of how much Lilly has spent on whatever it was; future value of these things is, naturally, a complete coin toss. We may also be looking at someone else's understanding of drug development, where everything short of picking the package color is considered early and/or brief. At any rate, Lilly's general counsel has said that the theft "does not significantly jeopardize our overall research and development pipeline", which makes you wonder why it was worth stealing in the first place. More on this as details come out. . .

Comments (11) + TrackBacks (0) | Category: The Dark Side


1. Anonymous on October 10, 2013 7:08 AM writes...

Perhaps Lilly have worked out that it's better to leak and then sue for theft of IP that *might* have value, rather than spending billions to show that it doesn't have any value?

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2. Angry Anon on October 10, 2013 7:20 AM writes...

Or maybe its just several Chinese nationals cheating to get ahead. I guess that a possibility as well, right?

Not to say that this is a cultural phenom.

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3. Twelve on October 10, 2013 7:32 AM writes...

If it's a coin toss, it's one where winning is tied to how often the coin ends up on its edge.

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4. Anonymous on October 10, 2013 8:09 AM writes...

How many scientists did Lilly lay-off and then walk off the site with the same valuable information between their ears?

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5. a. nonymaus on October 10, 2013 8:59 AM writes...

Should have kept them on staff and started using them as disinformation conduits.

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6. The Aqueous Layer on October 10, 2013 10:01 AM writes...

How many scientists did Lilly lay-off and then walk off the site with the same valuable information between their ears?

Lots. Same with every other pharma company. That little thing called your Employee Agreement, which forbids you from discussing proprietary information for x number of years after you leave is what is supposed to prevent you from disclosing what you know.

Realistically, if a company hires you and lets you blab about what you know, then uses that information, they've put themselves into some serious IP trouble as well.

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7. pgwu on October 10, 2013 10:05 AM writes...

This looks like the reverse of turd drugs going to pharma like the BioTurdCEO twitted. These two guys seemed to get some turd info probably collected from the internet (all those validation terms in the lawsuit), passed off as bargain for some vip positions.

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8. NoDrugsNoJobs on October 10, 2013 12:28 PM writes...

#7 - I like your take, interesting possibility?

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9. Ted on October 10, 2013 1:39 PM writes...

Lilly is managed by idiots. I found one of their program presentations on the hotel business center computer on my last business trip. It's hard not to notice a document that was saved to the desktop.

From the Lilly website:

"This drive for progress and innovation is what we are looking for in our people. We have created an open environment designed to stimulate the flow of information."

Maybe they should focus on some stimulatory inhibitors.


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10. Anonymous on October 10, 2013 4:57 PM writes...

#4. Read #1. Nothing has value in this business until it starts making money. Lilly's dire position in the world is proof of this

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11. 1 on October 13, 2013 12:42 PM writes...

I even suspect all of NSF and NIH research proposals also being sent to the people in CHINA! We have so many PIs (reviewers) and POs in all top places and where there is no check. We are playing in to their hands!

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