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(LEAD) ITC favors Medytox over Daewoong in botulinum toxin strain dispute

All News 08:59 July 07, 2020

(ATTN: UPDATES with more info in 2-5, 7-8 paras)
By Kim Han-joo

SEOUL, July 7 (Yonhap) -- The U.S. International Trade Commission (ITC) has sided with South Korean drugmaker Medytox Inc. in a dispute, saying its local rival Daewoong Pharmaceutical Co. stole trade secrets on a botulinum toxin strain, industry officials here said Tuesday.

In its preliminary verdict, the ITC also advised Monday (U.S. time) that imports of Daewoong Pharmaceutical's botulinum toxin products be banned in the United States over the next 10 years.

The final ruling is scheduled to be delivered Nov. 6.

This undated photo shows the headquarters of Medytox Inc. (Yonhap)

This undated photo shows the headquarters of Medytox Inc. (Yonhap)

The ruling is expected to reshape the U.S. botulinum toxin market valued at over US$5 billion and influence various lawsuits between the two firms in both countries that have been going on over the past five years.

Daewoong Pharmaceutical said the ITC's decision is a non-binding advisory, adding that the company will actively appeal with the court so that the final verdict can be reversed.

Medytox, meanwhile, welcomed the decision, saying it is very rare for the ITC's initial determination on trade secret cases to be reversed and that the ruling is virtually final.

In January 2019, Medytox -- along with development partner Allergan plc -- filed a complaint with the ITC, alleging that Daewoong Pharmaceutical stole trade secrets related to the bacterial strain of the company's botulinum product.

Medytox also claimed that its former employee had handed over trade secrets on the complex manufacturing process that is needed to turn botulinum toxin into a drug product.

Daewoong Pharmaceutical has refuted the argument, saying that its botulinum toxin product has own indigenous strain and that Medytox is trying to block U.S. imports of its rival product.

Medytox has its own botulinum toxin product called Meditoxin, which won South Korea's first license in 2006 and has maintained No. 2 position in the country. It is effective in treating various muscle spasms, overactive muscle diseases and facial wrinkles.

Daewoong then released its botulinum toxin named, Nabota, in the country in 2014. The product also won sales approval from the U.S. Food and Drug Administration (FDA) in February 2019.

Daewoong Pharmaceutical's global partner Evolus Inc. is in charge of the sales of Nabota in the United States, which is marketed under the name, Jeuveau.

This undated photo provided by Daewoong Pharmaceutical Co. shows the company's headquarters in Seoul. (PHOTO NOT FOR SALE)(Yonhap)

This undated photo provided by Daewoong Pharmaceutical Co. shows the company's headquarters in Seoul. (PHOTO NOT FOR SALE)(Yonhap)

Jeuveau is considered the strongest challenger to Botox by Allergan, which controls some 70 percent of the U.S. market. The product is priced 25 percent lower.

The two drugmakers have been mired in various litigations in both countries over the past five years. Medytox sought a similar lawsuit with a local court in 2017.

The ruling also comes as South Korea's drug safety watchdog has decided to revoke the permit of Medytox in the country for using an unapproved ingredient and fabricating related documents.

The three Meditoxin products -- which come in bottles of 50 units, 100 units and 150 units -- will permanently be removed from domestic shelves, according to the decision.


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