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Medytox's BTX dispute shows no end in sight

Medytox's suit against Daewoong will now go to a higher court, while it awaits the ITC's determination on its complaints against Hugel

Feb. 26, 2023 - 17:35 By Shim Woo-hyun
Medytox logo (Yonhap)

Medytox will soon be entangled in another dispute with South Korea’s leading botulinum toxin, or BTX, products maker Hugel, while an ongoing legal dispute with Daewoong Pharmaceutical is expected to continue as the latter appealed to a higher court here.

According to industry sources on Sunday, a lawyer from the US International Trade Commission, who is responsible for a pending dispute between Medytox and Hugel, reportedly presented an opinion that objected Hugel's request to close the case early.

The request to the ITC was sent by Hugel earlier this month, in which the company argued that the delayed settlement of the case is having negative impacts on the company's business.

The Medytox-Hugel case started in March last year as Medytox initially filed a complaint with ITC against Hugel, Hugel America and the company’s US distribution partner Chroma Pharma, arguing that Hugel stole its BTX strains and manufacturing know-how.

The ITC ruling was, however, postponed as Medytox and Hugel could not submit the relevant data in time, mainly due to late approval from the Ministry of Trade, Industry and Energy.

As a result, the ITC’s initial determination date on the Medytox-Hugel case is expected to be set back to sometime in early 2024.

Hugel has been trying to clear its ties with Medytox’s complaints, as it is apparently weighing on the company's business, including its stock price.

Hugel’s stock price dwindled after the Seoul District Court ruled in favor of Medytox in the Medytox-Daewoong case in February. The court said that Daewoong’s BTX products were developed by stealing Medytox's strains and technologies used in its manufacturing process.

Due to the allegation that Hugel could have stolen BTX strains of Medytox, Hugel’s stock price plunged to 133,800 won ($101) on Feb. 10 from 163,000 won a day earlier, while that of Daewoong fell to 124,200 won from 154,000 won.

On the other hand, Medytox’s stock price jumped from 133,600 won to 173,600 won during the same period.

Daewoong is also taking measures against the court’s ruling, in which it ordered Daewoong to pay 40 billion won to Medytox in compensation and prohibited the company from manufacturing its BTX products.

The company immediately requested for a stay of execution, and the Seoul Central District Court accepted it.

The legal fight will also go to a higher court as Daewoong appealed to the Seoul High court on Feb. 15, arguing that the latest court’s ruling was a “misjudgment.”

“The ITC had previously noted that business secrecy involving Medytox’s strains cannot be protected given that they were circulated globally without any restriction,” Daewoong said.

“Medytox’s manufacturing know-how was also revealed through a study released decades ago and is hardly a trade secret,” it added.