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Pfizer sues ex-employees over trade secret theft

Two chemists are accused of taking information to start their own drug company

by Michael McCoy
February 4, 2022

Pfizer has filed a lawsuit against two former researchers, claiming they stole the pharmaceutical giant’s trade secrets and other confidential information before leaving the company, then used the information to set up their own competing firm.

The researchers, both PhD chemists, are Xiayang Qiu and Min Zhong. Both worked in drug discovery and development for Pfizer or predecessor companies for more than 20 years before resigning from Pfizer in June 2018.

According to the complaint, filed in Connecticut federal court, the two chemists were dissatisfied with their prospects at Pfizer and began scheming in late 2017 to leave the company and start their own firm. In the early months of 2018, the complaint says, they began amassing documents about Pfizer drug discovery programs, including compounds in development and other company secrets.

With other unnamed defendants, they formed their own company, Regor Therapeutics. They also formed a sister company, QILU Regor Therapeutics, with funding provided by the Chinese drug company Qilu Pharmaceutical.

In an email, a Regor media contact, Lauren Xuan, says the company is aware of the Pfizer suit. “We believe that the lawsuit is entirely meritless and will defend ourselves vigorously,” she writes.

The structure of danuglipron.

One object of the intellectual property theft, Pfizer’s complaint says, was information related to the company’s program to develop small-molecule agonists of glucagon-like peptide 1, or GLP-1, which stimulates insulin production. Several approved drugs treat diabetes and obesity by targeting a receptor on GLP-1, but with one exception they all must be injected. None of them are oral small molecules, which have good metabolic stability and are easy to manufacture.

Pfizer has two oral small-molecule GLP-1 receptor agonists in clinical trials. One, danuglipron, is in Phase 2 trials.

Pfizer’s complaint says both Qiu and Zhong had been working in different capacities on small-molecule GLP-1 receptor agonist technology when they left the company. “Zhong and Qiu could have continued to build on this important, life-saving work at Pfizer for years to come,” the complaint says, “but they made a different choice: to take Pfizer’s trade secrets and confidential information unlawfully to launch a competing company.”

Among the documents they took, the complaint alleges, are documents describing the co-crystal structure for a Pfizer small molecule interacting with the GLP-1 receptor, a trade secret that Pfizer says it spent millions of dollars to develop. “A competitor in possession of that information could, among other things, design and screen for active GLP-1 receptor agonist compounds on an expedited basis,” the complaint says.

And Pfizer says that is indeed what happened. In November 2018, Regor published patents on a set of small-molecule GLP-1 receptor agonist compounds that appear “strikingly similar” to ones Pfizer developed, the complaint says.

On Feb. 18, 2021, Regor revealed that it had raised $90 million in series B funding from investors.

Then on Dec. 10, 2021, Regor announced that it will receive $50 million from Eli Lilly and Company as part of a multi-year collaboration to discover and develop new therapies for metabolic diseases like diabetes and obesity. “In a little over three years, Regor has established a world-class research organization exemplified by our Computer Accelerated Rational Discovery platform,” Qiu said in a press release announcing the deal.


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