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The Dark Side

Selling Sanofi’s Compounds on the Side

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.

49 comments on “Selling Sanofi’s Compounds on the Side”

  1. Tim says:

    “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.

  2. chubbycheeks says:

    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….

  3. IchDich says:

    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…

  4. You're Pfizered says:

    You mean I can’t do this?
    Um, be right back. Got some computer file cleaning up to do….

  5. A Nonny Mouse says:

    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!

  6. Fred McGriff says:

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

  7. Anonymous says:

    ………………………and how is this different than how our “external partners” do it?

  8. PDF says:

    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.

  9. Curt F. says:

    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?

  10. Curt F. says:

    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”.

  11. processchemist says:

    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.

  12. luysii says:

    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”.

  13. cynical1 says:

    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?

  14. 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.

  15. Lu says:

    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

  16. Hap says:

    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.

  17. anonimous says:

    Touche!!
    From a former Soviet

  18. Trityl Group says:

    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”…

  19. wwjd says:

    @ 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.

  20. MoMo says:

    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.

  21. Just sayin' says:

    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.

  22. John says:

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

  23. Dylan says:

    “and a maximum fine of at least $250,000”
    Not to be pedantic, but which is it?

  24. Dickweed Jones says:

    @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.

  25. milkshake says:

    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…

  26. KW's hairdresser says:

    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!

  27. @22John says:

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

  28. curious says:

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

  29. Jean-Luc Picard says:

    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.

  30. don't worry says:

    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,” …

  31. UKPI says:

    Abby Pharma offers ‘Customer synthesis’…I’ll have some of that!

  32. Sheri says:

    “What, just what, was this person thinking?”
    Yeah, I couldn’t tell the gender of this person either.
    Yuan anybody?

  33. Anonymous says:

    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

  34. Anonymous says:

    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…

  35. CR says:

    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.

  36. Recdep/Minirec says:

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

  37. Ricardo Rodriges says:

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

  38. anchor says:

    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.

  39. Mark says:

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

  40. chirality says:

    #39
    “it is loose-loose situation.”
    I couldn’t say it better. On second thought, I actually could.

  41. MOM says:

    So I guess Sanofi has one job opening now?

  42. HelicalZz says:

    #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

  43. anonymous says:

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

  44. Anonymous says:

    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.

  45. anonymous says:

    @44:
    If you’re going to make sarcastic remarks, at least spell all the words correctly…

  46. cliffintokyo says:

    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?

  47. @47 cliffintokyo says:

    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!

  48. kj says:

    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…

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