US calls on 2 S.Korean pharmaceutical companies for swift end to legal battle

Following its lawsuit against Daewoong Pharmaceutical, South Korea's Medytox Inc. is waging an all-out legal war against domestic counterpart Hugel Inc. over allegedly stealing trade secrets related to the botulinum toxin strain, better known as Botox.

The US International Trade Commission (ITC) rejected Hugel's request to end Medytox's lawsuit, thus the legal battle between Hugel, South Korea's top maker of botulinum toxin, and No. 2 Medytox is expected to have major repercussions on both the domestic and American markets.

The Washington-based ITC on Wednesday released the opinion of its attorney in charge of the case on the commission's official website, saying Hugel's request for early termination was inappropriate.

"Due to the delayed approval by (South Korea's) Ministry of Trade, Industry and Energy of the submission of documents to the ITC, the lawsuit schedule was delayed in a huge blow to our corporate management," Hugel said in acknowledging the ITC's request for an early end to the lawsuit.

Submission of documents related to botulinum toxin, a substance under national supervision, requires ministry approval.

The ITC ruling is expected to trigger an intense legal battle between Medytox and Hugel with the commission as the arena. Under the schedule released by the ITC, a preliminary ruling will be handed down in January next year and the final ruling in May of the same year, with effectuation coming two months later.

The industry is closely following the ITC lawsuit between Medytox and Daewoong Pharmaceutical because the ITC lawyer's decision had a significant impact on the ruling. At the trial between both companies in Washington in February 2020, the lawyer's opinion submitted to the presiding judge agreed that Daewoong Pharmaceutical used Medytox's botulinum strain. In July of the same year, an ITC administrative judge ruled that the defendant stole Medytox’s trade secrets.

In October last year, Hugel applied for approval from the US Food and Drug Administration for its botulinum toxin drug Botulax, under the export name of Retivo, which the company says improves glabellar wrinkles. The approval is expected within this year's second quarter but could also be affected by the ITC lawsuit.

A Hugel source said, “Because none of our products have received FDA approval in the US, the case is different from previous lawsuits,” alluding to the need to wait until the judge's ruling.

Medytox, on the other hand, says the truth should come out through a lawsuit, with a company source saying, "Hugel stole Medytox's trade secrets such as those related to its botulinum toxin strain and the manufacturing process."

Hugel denies this, saying it discovered the strain in canned food.

Hugel's leading share of the South Korean botulinum toxin market is an estimated 40%, while No. 2 Medytox's is in the 30% range. If Medytox wins the ITC lawsuit, the company is highly expected to expand its domestic market share.

Write to Yoorim Kim at youforest@hankyung.com