Daewoong Pharmaceutical’s U.S. partner Ebolus is expected to pay part of the settlement money and sales royalties that it decided to pay to Medytox and Abbie (formerly Allergan) in exchange for the settlement of a lawsuit for theft of botulinum toxin (Botox) strains.
Daewoong Pharmaceutical is a company that Ebolus sells for a certain period with a sales subsidy of $25.5 million (approximately 29 billion won) to strengthen its partnership with Ebolus, which sells and distributes its Botox product Nabota (U.S. sales name Jubo). It announced on the 24th that it has agreed to give additional subsidies in proportion to the sales volume of Bota. Industry experts analyze that Daewoong Pharmaceutical actually took part of the settlement money related to the Botox dispute that Ebolus should bear in connection with the sudden announcement of Daewoong Pharmaceutical’s Ebolus grant. Earlier, at the end of last year, the US International Trade Commission (ITC) ruled that Ebolus had stolen the Medytox botox strain and issued a final decision banning Nabota from importing to the United States for 21 months.
Afterwards, last month, Evolus agreed to pay a total settlement of $35 million (39.6 billion won) and royalties for Nabota sales in the U.S. over two years to Medytox and Abbey, and both sides withdrew the lawsuit. An industry official said, “From the standpoint of Daewoong Pharmaceutical, which runs a business together, we would have had to soothe Ebolus to some extent, which has to pay enormous settlement funds.” did. However, Daewoong Pharmaceutical’s position is that the subsidy payment is to promote Nabota’s global sales through Ebolus and has nothing to do with the ITC litigation settlement. It is a management judgment to subsidize Evolus’ sales and marketing expenses, which have been in short supply due to settlement payments, to achieve good results in global markets such as the US, Canada, and Europe.
A representative from Daewoong Pharmaceutical said, “It is close to the nature of the sales subsidy to quickly normalize the Evolus business. It is not related to the legal responsibility for the recent ITC ruling, and that Evolus used the money we gave for marketing and sales in the future. “You have to prove it.” Daewoong Pharmaceutical emphasized that there is no obligation to pay the settlement money because Ebolus has not previously agreed on an agreement with AbbVie Meditox.
Meanwhile, Daewoong Pharmaceutical became the 3rd largest shareholder of Ebolus (7.2% stake) by converting the previously invested USD 40 million in Ebolus Convertible Bond (CB) to common stock along with the subsidy payment. By converting loans (bonds) into investments (stocks), it relieved the burden of repayment of bonds to Ebolus, but we ate awkward’Hanpot Rice’ with Medytox, the main competitor and competitor of Botox, who became the second largest shareholder.
An official of Daewoong Pharmaceutical said, “The conversion of the convertible bonds with a conversion standard of $13 into common stocks with a current stock price of around $16 resulted in an valuation gain of about 12 billion won.” I expected to be able to preserve a large part of it.”
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