Medytox wins Botox face-off, but there's a wrinkle
The five-year "Botox war" between Medytox and Daewoong Pharmaceutical is nearing an end, with Medytox emerging victorious in a key battle.
According to both companies, the U.S. International Trade Commission (ITC) made an initial determination Monday. It concluded that Daewoong’s botulinum toxin product, Nabota, was made with bacteria and intellectual property stolen from Medytox.
Nabota was approved by the U.S. Food and Drug Administration (FDA) in February 2019 and is currently sold as Jeuveau.
Daewoong slammed the determination an “apparent misjudgment,” and said it will prepare an appeal as soon as it receives official documents.
The ITC has jurisdiction in the matter due to the fact that a component of the violation involved the importation of materials into the United States for sale domestically. It is seen as a good venue for complaints as it is normally faster than courts.
For Korean companies, it can also be a preferred alternative as the ITC demands rigorous discovery which can compel companies to release information that might not be revealed in a domestic Korean case.
The preliminary decision relates to a complaint filed by Medytox and Allergan, its U.S. partner, in January 2019, in which the companies claimed Daewoong violated section 377 of the U.S. Tariff Act by stealing botulinum toxin strains and production methods to develop Nabota. An investigation was initiated in March 2019.
A final determination will be published in November, but the Monday ruling is significant in that initial determinations are rarely overturned before the final statement is published.
Botulinum toxin, which is popularly known by Allergen's Botox brand name, is a substance that paralyzes muscles to reduce wrinkles.
Medytox was the first Korean company to succeed in mass-producing the product, in 2006. Having entered the market in 2014, Daewoong took a small share inside the country, but last year its Nabota became the first Korean botulinum toxin product to obtain an FDA sales approval.
Medytox accused Daewoong of stealing botulinum toxin strains shortly after Nabota’s release. Beginning in 2016, it filed law suits against its rival in Korea and the United States. Civil and criminal suits against Daewoong are still ongoing in Korea.
Daewoong said Tuesday the ITC relied on Medytox experts on “controversial” scientific issues and wrongly misjudged the rival’s claims to be true, despite the judge having made it clear that “there is zero evidence to prove theft of strains as Medytox claims.”
“An initial determination is nothing more than a recommended advice that in itself does not have administrative force,” Daewoong said in a statement. “We will continue to explain to resolve the [ITC’s] misunderstanding and achieve victory in the final determination.”
An exclusion order against Nabota, or Jeuveau in the United States, would be critical for Daewoong’s strategy. The botulinum toxin product is at the center of Daewoong’s plan for international expansion.
According to Evolus, Daewoong’s U.S. sales partner, Jeuveau generated $34.2 million in net revenue last year since its release in May. Daewoong’s Nabota export volume jumped more than fourfold on year in the first quarter of 2020. The product was approved for sale in 52 countries as of late June, and the company has signed sales contracts in 80 more.
Medytox needs all the good news it can get. In mid-June, Korea’s Ministry of Food and Drug Safety withdrew the sales license for three of the company's botulinum toxin products, which together generated 42.1 percent of company sales last year.
In trading on the Kosdaq Monday, Medytox rose 30 percent, the daily limit, closing at 215,800 won ($180). It had dropped as low as 120,000 won per share in mid June. Daewoong Pharmaceutical fell 17.23 percent in trading Monday.
In a Tuesday statement, Medytox said it will use the ITC’s determinations to support its cases in Korea.
“We firmly believe once the documents are submitted, the local court and prosecutors will give identical rulings as the ITC that Daewoong had indeed stolen Medytox’s trade secrets,” Medytox said.
BY SONG KYOUNG-SON [firstname.lastname@example.org]
with the Korea JoongAng Daily
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