Another Outbreak... Botox Dispute

"Production Using Stolen Trade Secrets"
Medytox Sues Hugel
Hugel "Baseless Defamation"
Medy-Daewoong Pharmaceutical Dispute
Appeals and Civil Lawsuits Ongoing

Medytox.

[Asia Economy Reporter Lee Gwan-ju] The domestic botulinum toxin (Botox) industry is once again shrouded in tension. Medytox recently filed a lawsuit against Hugel with the U.S. International Trade Commission (ITC), accusing the company of stealing its bacterial strains and manufacturing processes. This lawsuit means that the top three domestic botulinum toxin companies?Daewoong Pharmaceutical, Medytox, and Hugel?are all now embroiled in legal disputes.

◇ Medytox Claims "Hugel Stole Bacterial Strains" = Medytox filed the lawsuit against Hugel with the ITC on the 30th of last month (local time). Medytox sued three entities: Hugel, Austria-based Chromapharma (Hugel’s partner), and Hugel America (a joint venture between Hugel and Chromapharma as well as Hugel’s U.S. subsidiary). In the complaint, Medytox stated, "Hugel developed and manufactured botulinum toxin products by stealing Medytox’s botulinum bacterial strains and manufacturing process trade secrets, and is attempting to export these illegal pharmaceuticals to the United States." They also demanded that "the ITC initiate an investigation into Hugel’s illegal activities and issue an import ban on the relevant products."

Medytox is confident of winning the case. They previously sued Daewoong Pharmaceutical at the ITC in 2019, which resulted in a 21-month import ban on Daewoong’s products. Subsequently, Medytox received royalties from Daewoong’s partners. A key difference in the current lawsuit against Hugel is the involvement of a global litigation and dispute resolution investment firm providing ‘third-party funding.’ This investment firm covers litigation costs and receives a percentage of the compensation if the case is won. Although this concept is unfamiliar in Korea, it is relatively common in Anglo-American countries. Since the investment firm’s decision is based on the likelihood of winning and the potential amount, their involvement indicates confidence in the case.

◇ Hugel Responds: "An Attempt to Hamper U.S. Market Entry" = Hugel immediately rebutted Medytox’s lawsuit. Hugel stated, "This is a baseless and false claim with no factual foundation, an unreasonable lawsuit without grounds," and expressed deep regret over what they called "actions that disparage and slander the hard-earned achievements of Hugel’s employees over a long period." Hugel also issued strong criticism of Medytox, accusing it of "disruptive management behavior." Hugel said, "Medytox has shown abnormal management conduct, including distribution through irregular methods leading to product license cancellations, delays in approvals in China, and termination of licensing agreements in the U.S.," and added, "Raising unjustified suspicions now can only be seen as a typical attempt to obstruct our entry into the U.S. market."

Hugel Botulinum Preparation 'Botulax'

It is expected to take at least one to two years for the ITC to reach a decision. The previous dispute between Medytox and Daewoong Pharmaceutical took about one and a half years to conclude, but the conflict between the two companies is still ongoing. Medytox has appealed the Seoul Central District Prosecutors’ Office’s decision to dismiss charges against Daewoong and is also pursuing a separate civil lawsuit.

With all three major domestic botulinum toxin companies now involved in legal battles, the future landscape of the industry is uncertain. Currently, the Ministry of Food and Drug Safety has approved 18 botulinum toxin products from 16 companies, of which 15 products are from domestic companies. Depending on the outcome and progress of these lawsuits, changes in the botulinum toxin industry are possible. An industry insider said, "It is true that Hugel showed growth during the previous dispute between Medytox and Daewoong Pharmaceutical," but added, "It is difficult to make premature judgments at this stage."

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