<i> FBI agents boned up on lab lingo, but </i> erythropoietin <i> was a tongue twister</i> : Rival Helped Amgen Foil a Biotech Theft
John Stephen Wilson had the kind of entry-level research job that a lot of people didn’t really notice at Amgen, the Thousand Oaks biotechnology company. Some of Amgen’s top executives didn’t even know Wilson existed.
But that all changed two weeks ago when Wilson was arrested by the FBI in a Ventura restaurant. He was accused of trying to sell a briefcase full of key manufacturing blueprints for Amgen’s new wonder drug, erythropoietin (EPO), for $200,000 in cash to Amgen’s leading rival.
The undercover FBI agents who arrested Wilson took a crash course in biotech lingo so they could act out their parts as biotechnology professionals, but erythropoietin was a tongue twister. “We have a tough time even pronouncing that stuff,” explained Gary Auer, supervisor of the FBI’s Ventura office. So the agents tried to avoid mentioning it when they finally met Wilson.
Amgen values the documents at $50 million. “He knew exactly what he was looking for. He singled out very valuable material, “ said Lowell Sears, Amgen’s treasurer.
Whether all this is proved in court, of course, will have to wait for another day. But the FBI is convinced that it knows why Wilson tried to sell the documents. Wilson told the undercover FBI agents that he needed the money, Auer said. Why? Wilson was making an annual salary in the low $20,000s. And he wanted to “buy a house in Santa Barbara,” Auer explained.
Wilson, 33, was charged with interstate transportation of stolen property. Currently free on $15,000 bail, he faces, if convicted, a maximum 10-year prison sentence and a $10,000 fine. Wilson declined to comment on his case.
The FBI investigation lasted seven weeks, and it took the cooperation of two corporations and some ingenuity by the undercover agents before Wilson was finally arrested.
The espionage caper began when a letter signed “Pimpernel” arrived one day in June at the corporate offices of Genetics Institute, a biotechnology company in Cambridge, Mass., and Amgen’s leading rival. Wilson allegedly enclosed samples of secret information about EPO, Amgen’s first commercial drug.
Biotechnology analysts figure that Genetics Institute and its Japanese partner, Chugai Pharmaceutical, are at least a year behind Amgen in the race to market EPO, a new anti-anemia drug, in the United States. Closing that gap seems to have been part of the lure offered by “Pimpernel,” because the writer promised plenty more confidential Amgen information if Genetics Institute forked over $150,000, or 10,000 shares of stock.
Last week, shaken Amgen officials looked over the 500-plus pages of photocopied documents Wilson allegedly offered to sell and pronounced them genuine, a virtual “blueprint” on how to manufacture EPO, Sears said. “If they had fallen into the hands of someone not advanced in the manufacturing process of EPO, it would have helped them substantially,” Sears said.
The Wilson case points up the perils of so-called “intellectual properties,” especially for a fledgling company like Amgen that has bet its future on its ability to concoct new drugs. Amgen, begun in 1980 by a handful of scientists and investors, today is valued in the stock market at more than $500 million, a remarkable achievement given that only last month Switzerland became the first country to license EPO for sale.
Nevertheless, Wall Street is betting that Amgen’s gene-splicing scientists have their hands on a big moneymaker in EPO, which has won glowing reviews in the New England Journal of Medicine. In human tests, EPO alleviated chronic anemia in patients suffering from kidney disease by triggering production of red blood cells. The kidney patients regained much of their lost energy and didn’t need the frequent blood transfusions. Amgen scientists and biotechnology analysts believe that EPO also can help patients undergoing chemotherapy or those suffering from rheumatoid arthritis.
The Food and Drug Administration is widely expected to give Amgen approval to start selling EPO in the United States by year-end, and biotech analysts figure that the worldwide market for EPO may hit $400 million a year by the early 1990s, with Amgen likely to win a big chunk of the business--which makes the cooperation between Genetics Institute and Amgen in the Wilson case all the more impressive.
The companies are locked in two bitter lawsuits over competing patents to EPO, yet when Genetics Institute received Pimpernel’s letter, it told Amgen what was going on. Then Amgen called in the FBI.
What follows is an account of the case, according to the FBI:
Pimpernel’s letter listed a post office box in Ventura. So the FBI sent a letter on Genetics Institute stationery, with a Boston postmark, to the Ventura address that essentially said, “We’re interested, we’d like to know more.”
Early in their negotiations, the undercover FBI agents told Wilson that if they bought the documents it would be in cash. “We told him Genetics Institute is not giving its stock away,” Auer said.
At the time Pimpernel’s letter arrived at Genetics Institute, Wilson was still working at Amgen. He was hired by the company in July, 1987, to fill a research associate job in the manufacturing process department as Amgen was preparing to manufacture large quantities of EPO, in anticipation of winning FDA approval to sell the drug.
The job Wilson filled called for somebody with a background in biology, and it was a plus that he also knew something about computers, Sears said. Wilson had earned a bachelor’s degree in biology from New Mexico State University in 1977 and in 1985 earned an applied science degree in computer programming from the University of New Mexico.
According to Sears, when Wilson moved from New Mexico to Santa Barbara, he first looked for work with a computer software firm in the area, but when he couldn’t find one, he accepted the Amgen post. Amgen is at the stage where it is growing like a weed, with about 420 employees, and the old hands at the company have a hard time getting to know many newcomers.
Wilson worked at Amgen for one year and he did an “adequate” job, Sears said. Meanwhile, Wilson’s commute from Santa Barbara to Amgen’s Thousand Oaks office worked out to about 50 miles each way. So Wilson told Amgen this summer that he would be leaving to take a job with a computer software company in the Santa Barbara area, “it all made fine sense,” Sears said. Wilson worked his last day at Amgen on July 28.
Two weeks later, the FBI agents were closing in on a meeting with Wilson. The night before they were to get together, Wilson jacked up his price for the Amgen documents from $150,000 to $200,000, the FBI said. The FBI agents said fine.
On Thursday evening Aug. 11, the two FBI undercover agents finally met Wilson at a family restaurant in Ventura.
Forty-five minutes later, both sides agreed to make the deal. Then Wilson was arrested.
