Summary of Key Events
Qiu Xiayang, the founder of Rui Ge Medicine, was deposed by the company's directors in conjunction with the former COO Zhong Min due to his rejection of a dividend proposal from the investors amounting to $428 million: On July 7th, Qiu Xiayang was forcibly removed from the headquarters in Houston, and the president of the Boston division in the United States was also expelled at the same time. Subsequently, the investors issued documents bypassing the founder, suspending his CEO duties and freezing his account access, with Zhong Min taking control of all business operations. The conflict was triggered by disagreements over dividends following the receipt of a $850 million Series B financing round, but underlying issues had been brewing for some time—former COO Zhong Min had engaged in financial misconduct (forging addresses to evade taxes) and surveillance and eavesdropping activities. Essentially, it was a business battle between a scientist-founder who wanted to continue with research and development and investors who sought immediate profit.
I. The Coup: Founder Forced Out, Account Access Seized
On July 7th, Rui Ge Medicine experienced a swift power grab:
- Simultaneous Actions in Two Locations: At the Houston headquarters, former COO Zhong Min instructed several individuals (who claimed to be law enforcement officers but did not produce identification) to drag Qiu Xiayang out of his office; at the Boston division, the president Zhu Xiaotian was also removed by men in formal attire. The police were present but did not intervene, and the entire incident was recorded on surveillance.
- The Three-Step Plan to Seize Control: The investors' directors issued three documents: 1) Suspending Qiu Xiayang's CEO role at all global subsidiaries and appointing Zhong Min as his replacement, prohibiting him from entering the office, using the company systems, or accessing bank accounts; 2) Notifying all employees to follow Zhong Min's instructions only; 3) instructing cooperating banks to revoke Qiu Xiayang's account access rights.
- Complete Account Shutdown: Zhong Min directly contacted banks such as UBS and JPMorgan Chase to freeze all of Qiu Xiayang's account privileges, effectively becoming the sole person in charge of the company.
II. The Trigger: Dividend Disputes After the $850 Million Financing Round
The direct cause of the coup was a disagreement over the distribution of funds:
- A Bright Moment Turns into a Crisis: In September 2024, Rui Ge Medicine sold its tumor therapy pipeline to Roche's Genentech for an upfront payment of $850 million, with additional milestone payments to follow, bringing nearly $1 billion in cash to the company's accounts.
- Investors Want Profit, Founder Prioritizes Research: In May 2026, four investor directors proposed distributing $428 million (with $100 million to be distributed initially), but Qiu Xiayang, as a shareholder with veto power over dividends, refused, intending to reinvest the money in 30 new drug projects (half in early stages and half in clinical trials).
- Retaliation After Rejection: The proposed distribution of $100 million was withdrawn and later returned, leading Zhong Min to plot the coup a week later. Qiu Xiayang believed that the coup was a retaliation for his refusal to share the funds, with the ultimate goal of seizing the company's substantial cash reserves.
III. Underlying Issues: Long-Term Frictions
The conflict was not sudden; there were underlying issues between the parties:
- Financial Misconduct by the Former COO: Qiu Xiayang's team discovered that Zhong Min had forged his residential address to reduce state taxes, resulting in a loss of nearly $80,000 for the company, with an additional $30,000 being withheld by tax authorities. Although Zhong Min was later placed on paid suspension, the issue was not resolved.
- Suspicion of Surveillance and Eavesdropping: Zhong Min had installed surveillance software on company servers and hidden microphones in offices, stealing internal emails, financial data, and meeting records, potentially violating U.S. surveillance and computer fraud laws. These actions indicated a breakdown in trust between the two parties, with the $850 million financing round merely accelerating the conflict.
IV. A Common Problem in Biotech: The Business Battle Between Scientists and Entrepreneurs
Rui Ge Medicine's ordeal highlights a common challenge faced by many biotech startups:
- The Conflict of Minds: Founder Qiu Xiayang, a scientist, wanted to invest all funds in research and development, while the investors, as businessmen, sought immediate returns. This tension between long-term investment and short-term profit is prevalent in the biotech industry.
- Beyond Research: Building new drugs requires scientific expertise, but running a company also demands business acumen—balancing shareholder expectations, managing cash flows, and handling internal issues. Many scientist-founders excel in research but struggle with these non-scientific aspects of entrepreneurship.
- A Warning for the Industry: Rui Ge Medicine is not an isolated case; biotech companies must not only develop innovative drugs but also learn to navigate complex financial, managerial, and equity distribution challenges. Otherwise, even the most promising research can be undermined by internal conflicts.
The true details of this conflict remain unresolved, but it serves as a reminder to all tech entrepreneurs that technical prowess alone is not enough; understanding business principles is essential. Otherwise, what might seem like a triumph could turn into a fatal flaw.