Input 2021.02.22 15:37
Performance declined 5 years before consumption… Both companies “will reveal to the end”
According to the two companies on the 22nd, a trial for the first trial will be held soon on the case of theft of botulinum toxin (Botox) technology of both companies, which are competing in the Seoul Central District Court. Although the specific schedule has not been set yet, both companies said, “As the recent US International Trade Commission (ITC) ruling was issued and the evidence dealt with at that time was recently submitted to the domestic court, I know that the trial will take place in earnest and fast.”
The domestic lawsuit began in October 2016 when Medytox claimed that “Daewoong Pharmaceutical’s Botox product’Nabota’ stole our Botox strain.” Medytox demanded Daewoong Pharmaceutical to compensate for damages and dispose of Nabota, and also filed a criminal complaint on the same charges. The court delayed the ruling for nearly five years to refer to the results of the US lawsuit on the same issue four months earlier.
In December last year, the US ITC ruled. ITC said that Daewoong Pharmaceutical had stolen the technology to make products with Botox strains, but did not determine whether the strain itself was stolen because it was not subject to trade secrets. Daewoong Pharmaceutical was banned from selling Nabota in the U.S. for 21 months, but the ban was significantly reduced from the 10 years originally expected.
The two companies claim to have won each other over this, and they are motivated to put a wedge in the domestic trial. Medytox is waiting for a domestic trial saying, “I will also prove whether the strain for which the ITC has been withheld the judgment has been stolen,” and Daewoong Pharmaceutical said, “I will show that the decision to ban the sale of ITC is wrong.”
The upcoming domestic lawsuit is expected to be a burden on both companies. Daewoong Pharmaceutical’s operating profit last year recorded 17 billion won, a 62% drop from the previous year (2019) due to the accumulated litigation costs. Net profit decreased by 12.7% and sales also decreased by 5.2%, only maintaining the ‘1 trillion club’.
The same is true of Medytox, which was in the position of an offensive. Since 2016, Huzel has taken the No. 1 position in the domestic Botox market, but has not had the time to retake it. Last month, the Ministry of Food and Drug Safety banned the sale of Medytox’s Botox products in Korea, saying, “I forged clinical test data,” and Medytox was also in a situation where it was filing an administrative lawsuit with the Ministry of Food and Drug Safety.
In this situation, on the 19th, the three-way agreement between Evolus, a company selling Nabota of Daewoong Pharmaceuticals in the United States, and Medytox, and Aller, a US partner of Medytox, broke the breath for a while. Instead of continuing to sell Nabota in the United States, Evolus decided to pay an agreement between Medytox and Aller of about 38 billion won and royalties from sales. Medytox also bought a 16.7% stake in Ebolus, becoming the second largest shareholder, and has a stake in Evolus’ Nabota business. On this day, the securities industry raised its rating and target price, seeing that the risks have been resolved by both companies.
However, when it comes to domestic lawsuits, both companies are still showing a strong stance, drawing a line saying “Daewoong Pharmaceutical has not agreed.” Medytox said, “If Daewoong Pharmaceuticals has made a request for an agreement with reasonable conditions, as we have agreed with Ebolus, I will see the conditions and judge them.” Daewoong Pharmaceutical said, “Because I am confident in winning, I do not feel the need to agree.”