Chinese Biotech Accuses Rival of Industrial Espionage

In a federal lawsuit, Shanghai-based I-Mab has accused US drug developer Inhibrx of stealing its trade secrets by infiltrating an arbitration hearing posing as an expert witness. The hearing was related to a development agreement I-Mab was trying to exit. In its complaint, I-Mab alleges that it was involved in a years-long dispute with its one-time partner Tracon Pharmaceuticals over the agreement. Tracon believed that I-Mab’s move to leave was illegal and sought $200m in damages. The hearing was held in Delaware, where Tracon enlisted expert witness Dr. Brendan Eckelman to testify on its behalf. Eckelman specialises in the kind of antibody drugs I-Mab was working on. According to I-Mab’s complaint, Eckelman pretended to be impartial but was, in fact, working for Inhibrx and used the arbitration hearing to gain access to I-Mab’s proprietary research and steal trade secrets.   Both Inhibrx and I-Mab are biotech companies focused on immunotherapy treatments for cancer and other challenging ailments. It’s a red-hot area of science where trade secrets are zealously guarded, and investment is substantial. The cost of developing cutting-edge cancer drugs can run into hundreds of millions of dollars, and even the slightest legal advantages can mean billions in extra funding and distribution deals. 

Biopharma I-Mab Accuses Inhibrx of Trade Secret Violation

I-Mab, a biopharmaceutical company renowned for developing potential treatments for cancer, has accused Inhibrx and its co-founder and chief science officer, Eckelman, of violating the Trade Secrets Act. The allegations stem from Eckelman’s role in a December 2021 arbitration proceeding in which Tracon participated. I-Mab claims that Eckelman, who was formerly associated with I-Mab’s rival, was granted access to confidential information to serve as an expert witness for Tracon.

Although Tracon was not obligated to disclose the identities of potential expert witnesses prior to the arbitration hearing, I-Mab claimed that it discovered Eckelman’s identity only after reviewing a report submitted by Tracon. According to I-Mab’s suit filed in early 2022, Eckelman’s position and Inhibrx’s involvement in the case amounted to a violation of the Trade Secrets Act. However, I-Mab has not named Tracon in the lawsuit.

I-Mab alleged that Inhibrx’s conduct was particularly egregious because both firms were working on cancer-fighting drugs that targeted identical molecular targets, further intensifying competition between the two companies. Despite I-Mab’s request for clarification and cooperation, both Tracon and Eckelman remained unresponsive, according to I-Mab.

No comment was provided by a lawyer representing Eckelman and Inhibrx in the case. Likewise, Tracon’s chief executive was unavailable for comment.

Lawsuit Between I-Mab and Inhibrx Continues in Court

The legal dispute between I-Mab and Inhibrx over allegations of trade secret theft continues in court. Lawyers representing Inhibrx and Eckelman had argued for the case to be dismissed, claiming that I-Mab’s motivation was to discredit Eckelman’s testimony in the Tracon arbitration proceeding and that the two companies were not direct competitors.

The arbitrator in the dispute between I-Mab and Tracon ruled in favor of I-Mab, allowing them to pay a termination fee of $9 million plus interest and legal costs to leave the partnership. However, the judge in the case between I-Mab and Inhibrx ruled that the two companies were indeed direct competitors, with I-Mab listing Inhibrx as such in documents filed with the Securities and Exchange Commission.

The judge also noted that Eckelman’s argument that he was unaware of I-Mab’s activities prior to signing a document claiming he did not work for a competitor was not convincing, as a simple Google search would have revealed otherwise. “Dr. Eckelman did no such due diligence, which under the circumstances, is hard to understand,” the judge said in his decision.

The case continues in court as both sides present their arguments and evidence.

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