Medytox files complaint with ITC against Hugel over botox strain

South Korean pharmaceutical company Medytox Inc. has filed a complaint with the International Trade Commission (ITC) against Hugel Inc., alleging that the crosstown rival has poached its botulinum toxin strain.

Hugel, Korea’s largest manufacturer of botulinum toxin, more commonly known as botox, instantly rebutted Medytox’s claims, saying the accusations are “groundless.”

Medytox said on Friday it lodged the complaint with the ITC on March 30, asking the US trade panel to look into the case and impose an import ban on Hugel’s botox product into the US.

Medytox said Hugel has produced its botox product, Letybo, by misappropriating trade secrets belonging to Medytox and is preparing to export Letybo to the US.

The complaint targets Hugel, Croma-Pharma GmbH, its partner in the US and European markets, and Hugel America, their joint venture.

A Medytox official said its legal action against Hugel is led by a company that specializes in litigation and legal disputes. Medytox has hired global law firm Quinn Emanuel Urquhart & Sullivan LLP as its legal advisor to protect its intellectual property rights such as botulinum strains and manufacturing processes.

Shares of Medytox rose 4.4% to close at 136,700 won on Friday. Hugel fell 13.2% – its biggest daily percentage drop in nearly five months – to finish at 120,700 won.

SIMILAR ACTION AGAINST DAEWOONG

The complaint comes three years after Medytox filed similar legal action with the ITC against Daewoong Pharmaceutical Co., another Korean botox maker.

In January 2019, Medytox lodged a complaint with the US trade panel against Daewoong, saying the competitor used Medytox’s botox strain to make its product.

The ITC initially ordered a 21-month ban on imports of Daewoong’s botox product, Nabota, but later invalidated the ruling following a negotiated settlement of the matter between the two companies.

According to industry watchers, Medytox suspects all botox makers in Korea are using the botulinum strain that it has secured from a US university laboratory in 1979.

However, Hugel and Daewoong have said they obtained their botulinum strains independently and so different from that of Medytox.

DIM US BUSINESS OUTLOOK

Medytox’s action comes after its botulinum toxin-related technology transfer contract with AbbVie ended in September of 2021, clouding its business outlook in the US market.

Medytox licensed out its technology for its botox product candidate to Allergan plc, which is now part of AbbVie, in 2013 and granted the US biopharmaceutical firm the exclusive right to develop and commercialize the product in countries other than Korea.

The latest complaint by Medytox will also work against Hugel’s plan to launch its botox product, Letybo, in the US market after obtaining regulatory approval by the end of the first half of this year.

Established in 2001, Hugel is Korea’s largest maker of botulinum toxin products used to treat overactive muscle diseases and facial wrinkles. The company controls about half the Korean botox market.

Hugel currently sells its products in 27 overseas markets, including Japan, Taiwan and Vietnam.

In August of 2021, a consortium led by Korea’s energy-to-construction conglomerate GS Group acquired a 46.9%b stake in Hugel for 1.7 trillion won ($1.4 billion).

In February this year, GS Holdings Co. said it is investing more in Hugel to become the botox maker’s single largest shareholder with a 42% stake.

“Medytox is trying to block the rise of its rivals with false accusations. Its claims are groundless,” said a Hugel official

Write to Jae-young Han at jyhan@hankyung.com
In-Soo Nam edited this article.