Genscript and Legend Biotech Founder arrested for stealing IP from the Chinese government.
Two months after stepping down from the role of Chief Executive Officer of Legend Biotech, Fangliang “Frank” Zhang has been arrested and detailed for smuggling genetic goods from the People’s Republic of China. He has subsequently resigned from his position on the board of directors of the company.
Zhang, who established Legend Biotech in 2015 as a subsidiary of Genscript, a company he also co-founded, had been under residential surveillance in connection with an investigation by the Customs Anti-Smuggling Department of Zhenjiang in China since September 2021. As of November 23, no charges have formally been made against Zhang, based on a Legend's statement, but he was taken into custody in the country. In the statement, Zhang voluntarily resigned from his role at the company “to avoid unnecessary distraction to Legend Biotech.”
Zhang's arrest was for "the suspected offense of smuggling goods prohibited by the import and export regulations under the laws of the PRC," according to a GenScript release. He was arrested alongside two employees who previously handled the import and export activities of the group. The two other employees are also yet to be formally charged.
According to the South China Morning Post, the probe into Zhang and the other GenScript employees are based on the "special inspections of the management of human genetic sources – organs, tissues, and cells." Human genetic resources are strongly regulated by the Chinese government. The Post reported that foreign organizations and individuals are not permitted to preserve or collect China's human genetic goods. According to a report from China's State Council, the goods are not also permitted to be exported for use abroad. The investigation into the allegations is headed by China’s ministry of science and technology in conjunction with related authorities.
Li Zhu, chief strategy officer at GenScript Biotech, was tapped to fill Zhang's position on the board. Prior to joining GenScript, Zhu was a director of molecular biology at California-based Clontech Laboratories, Inc. He was also the president and CEO of Genetastix Corporation Inc., a biotech firm that specialized in yeast-based antibody discovery from 2000 to 2005.