Botox Companies Breathe a Sigh of Relief After ITC Final Ruling

"Botulinum Strain Is Not a Trade Secret"

[Image source=Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] The U.S. International Trade Commission (ITC) has finally concluded that bacterial strains are not trade secrets in the 'Botox war' between Medytox and Daewoong Pharmaceutical, providing relief to other domestic botulinum toxin companies. Medytox, the first Korean company to develop Botox, had long suspected that latecomers like Daewoong Pharmaceutical and Hugel had stolen its bacterial strains.

According to the pharmaceutical and bio industry on the 18th, there are about 20 companies and institutions in Korea that possess botulinum strains. Considering that there are only five Botox companies overseas, including Allergan in the U.S., Ipsen in France, Lanzhou Institute in China, Solstice in the U.S., and Merz in Germany, this number is unusually high.

Since 2016, Medytox has suspected that most domestic Botox companies stole its strains. It publicly demanded competitors disclose the source of their strains through TV commercials and newspaper ads, saying, "If it's genuine, then disclose it."

Botulinum bacteria only grow in anaerobic environments, making it unlikely to be found in everyday life. Daewoong Pharmaceutical, which considers itself the de facto winner following the ITC's final ruling that strains are not trade secrets, claims to have secured its strain from soil in a stable in Yongin, Gyeonggi Province. Daewoong Pharmaceutical CEO Jeon Seung-ho said immediately after the final ruling yesterday, "I am very satisfied that it was recognized that the strain is not a trade secret."

Some latecomers have not clearly disclosed or have changed their statements about the source of their strains. Hugel, the domestic market leader, initially said in 2009 that it isolated the strain from "rotten canned food," but later changed to saying it obtained it by collecting and fermenting discarded food. Regarding this, a Hugel representative said, "Both rotten canned food and discarded food mean the same thing," and added, "We have never changed our statement about the source of the strain."

Because of this, the Korea Disease Control and Prevention Agency sent official letters earlier this month to about 20 domestic companies and institutions possessing botulinum strains, inquiring about the source of their strains. At that time, major companies appeared tense about the agency's full-scale investigation, holding emergency meetings.

Overcoming the Crisis of Multiple Lawsuits Related to Theft
Medytox "Plans to Appeal ITC Decision"

Industry insiders had predicted that if the ITC had ruled that strains were trade secrets, Medytox would have launched multiple lawsuits against other companies for strain theft. However, with this final ruling, domestic botulinum toxin companies have been relieved of such burdens. Lee Hye-rin, a researcher at KTB Investment & Securities, analyzed, "If Medytox had won this lawsuit (with strains recognized as trade secrets), all domestic botulinum toxin companies could have been subject to lawsuits, but such concerns can now be set aside."

There is also speculation that the ongoing full-scale investigation by the Disease Control Agency may lose momentum. Sun Min-jung, a researcher at Hana Financial Investment, predicted, "The ITC's final ruling will also affect the Disease Control Agency's full-scale investigation."

However, Medytox emphasizes that the ITC's final ruling proves Daewoong Pharmaceutical's strain theft allegations. Medytox stated, "The ITC's final ruling is evidence that Daewoong Pharmaceutical's claim of discovering botulinum strains in Yongin soil is false," and added, "Daewoong Pharmaceutical, which submitted false information about the source of the strain to the Ministry of Food and Drug Safety, cannot continue its botulinum toxin formulation business." Medytox plans to appeal the ITC's decision that strains are not trade secrets.

Meanwhile, as of 9:43 a.m. today, Daewoong Pharmaceutical's stock price on the KOSPI market rose 22.79% from the previous day to around 215,500 KRW. Daewoong Holdings, the holding company of Daewoong Pharmaceutical, also surged over 17%, breaking the 70,000 KRW mark. At the same time, Medytox traded up 2.06% at 208,100 KRW.

This content was produced with the assistance of AI translation services.