Compensation + Loyalty + Stock… Medytox in the wake of the’Botox War’-JoongAng Ilbo

Medytox and Allergan, who won the US International Trade Commission’s administrative lawsuit, signed an agreement with their opponent, Ebolus. The picture is Medytox’s office building in Gangnam-gu, Seoul. [뉴스1]

The’Botulinum Toxin (Botox) War’, an international litigation war that Medytox and Daewoong Pharmaceuticals have been holding for four and a half years, has come to an end. Among the four companies involved in the Botox lawsuit, three companies except Daewoong Pharmaceutical agreed.

Medytox, which is in an intellectual property lawsuit in the United States over the sale of Daewoong Pharmaceutical’s Botox formulation Nabota (U.S. jubo), signed a three-party agreement with Allergan and Ebolus on the 19th (local time). Allergan, the largest Botox pharmaceutical company in the United States, is a company that holds exclusive sales rights for Medytox’s new Botox drug (MT10109L) in the world, excluding Korea. Evolus is a partner of Daewoong Pharmaceutical, which has exclusive sales rights to Nabota worldwide except in Korea.

Contents of the Botox Litigation Agreement. Reporter Kim Kyung-jin

There are three main contents of the agreement between Medytox, Allergan, and Ebolus. First is the settlement payment. Evolus will pay 35 million dollars (about 387 billion won) of settlement money to Allergan and Meditox over the next two years. Allergan’s and Medytox’s settlement amount was not disclosed.

The reason why Allergan and Meditox received the settlement money is because the US International Trade Commission (ITC) issued an order to ban US imports for 21 months, saying, “Daewoong Pharmaceutical’s Nabota violated Article 337 of the Customs Act” at the end of last year. Instead of paying the settlement money, Ebolus, which imports Nabota and sells it in the United States, said, “Meditox-Allergan decided to file a petition to rescue Ebolus against ITC’s executive order.” Medytox’s civil lawsuit against Ebolus in California is also withdrawn.

The position of companies involved in Botox litigation. Reporter Kim Kyung-jin

It also pays sales royalties to Medytox. The amount of royalties depends on the length of sale and country. First of all, this is the case when Ebolus sells Daewoong Pharmaceutical’s Nabota within the period (21 months) where the ITC banned imports. If you sell Nabota in the U.S. within 21 months, Ebolus gives Meditox and Aller a royalty at a special rate to sales, and if you sell Nabota outside the U.S., it gives Meditox a low-double digit rate to sales. . However, the royalty rate was not disclosed.

An official in the pharmaceutical industry who wanted to remain anonymous said, “If countries other than the United States stipulate a royalty rate of at least 10%, the special rate applied to US sales is estimated to be higher.” As of 2019, Ebolus’ net sales of weekly notes in the U.S. were $34.2 million (about KRW 37.8 billion), and non-U.S. net sales were $700,000 (about KRW 800 million).

Daewoong Pharmaceutical’s signboard installed at Daewoong Pharmaceutical’s office building in a lawsuit infringing trade secrets such as theft of botulinum strains. [연합뉴스]

After the import ban period (21 months), the royalty rate decreases somewhat. Meditox pays around 5% (mid-single digit) of weekly sales. Meditox will continue to pay royalties for as long as the product license is valid.

It is also noteworthy that Medytox acquires Ebolus shares. According to the US Securities and Exchange Commission (SEC), through this agreement, Medytox will acquire Ebolus common stock (676,2652 shares) for $67.62 (75,000 won). It means buying Ebolus stock, which is $12.29 based on the closing price on the 19th (local time), for $0.00001 per share (about 0.1 before).

Accordingly, Medytox is the second largest shareholder of Ebolus (16.7%). This is a part where Medytox can expect the effect of entering overseas markets using the Ebolus sales network. For Medytox, the Botox lawsuit is one thing and three gains (one thing, three profits).

A journal of global Botox litigation that has been in progress for as many as four and a half years since 2016. Graphic Reporter Kyungjin Kim

The United States accounts for about half of the global botox market. Allergan is the largest company with 70% of the US market. Ebolus is also growing fast enough to reach 50% quarterly sales growth since 2019. As the global botox market leaders and Medytox join hands, it is also evaluated that Daewoong Pharmaceutical has been somewhat behind the so-called’Botox War’. However, Daewoong Pharmaceutical said, “Daewoong Pharmaceutical is not a party to this trilateral agreement,” and “Daewoong Pharmaceutical has never agreed in advance to Ebolus’ arbitrary actions.”

Daewoong Pharmaceutical appealed against ITC’s executive order. On the 18th (local time), just before the three-way agreement, Daewoong Pharmaceutical requested the US Federal Circuit Appeals Court for expedited review of the appeal. However, the lawsuit disappeared with the agreement of the three companies. A representative from Daewoong Pharmaceutical said, “As the object of the appeal (ITC executive order) disappears, we will go through the procedure to withdraw the appeal with the co-plainer Ebolus.”

Furthermore, Daewoong Pharmaceutical emphasized that the three-way agreement enables Nabota to sell in the US market. Daewoong Pharmaceutical said, “The basis for the resumption of Nabota sales has been laid,” and “with Evolus, we will accelerate our global market penetration.”

Apart from this, Medytox and Daewoong Pharmaceutical are also in the process of litigation in Korea. Regarding the prospect that Daewoong Pharmaceutical could try to reach an agreement with Medytox, Daewoong Pharmaceutical said, “It is difficult to reach an agreement as Medytox is demanding conditions that cannot be achieved by not selling Nabota.” Insisted.

Reporter Moon Hee-cheol [email protected]