Medytox Claims "Hugel Stole Strains"
3-Year Legal Battle Since ITC Filing
Final Verdict Expected This October
Financial Sector: "Lawsuit Settled... Uncertainty Resolved"
Hugel has gained the upper hand in the second round of the 'Botulinum Toxin War' initiated by Medytox. Medytox had hoped to seize dominance in the domestic toxin industry by winning this dispute with Hugel following its earlier victory over Daewoong Pharmaceutical in the first round, but it has been temporarily thwarted.
The U.S. International Trade Commission (ITC) ruled on the case filed by Medytox against Hugel, alleging that Hugel's toxin products infringed on its trade secrets. The lawsuit also involved Hugel's partner, Austria's Chromapharma, and their joint venture Hugel America. On the 10th (local time), the ITC decided in its final initial determination that there was no violation of Section 337 of the Tariff Act in the importation of certain toxin products and their manufacturing or related processes into the United States. Section 337 of the U.S. Tariff Act restricts unfair imports that infringe on intellectual property rights such as patents, trademarks, and copyrights.
With this, the patent dispute between the two companies that has lasted for over three years since 2022 has tilted in favor of Hugel. Previously, Medytox had won the lawsuit against Daewoong Pharmaceutical, with both the U.S. ITC and domestic courts recognizing Daewoong's strain theft.
Hugel established Hugel America in 2018 together with Chromapharma and has been attempting to enter the U.S. market, including applying for FDA approval of its toxin product Botulex (export name Retivo) in October 2022. Botulex successfully received FDA approval in March after three attempts. In relation to this, Medytox filed a complaint with the ITC in May 2022, claiming that Hugel's toxin was made by stealing Medytox's toxin strain and that Hugel was attempting to export it to the U.S.
At the time, Medytox alleged that Hugel not only stole the toxin strain but also misappropriated related trade secrets such as manufacturing processes. However, during the subsequent litigation, Medytox requested the ITC to exclude strain-related issues from the investigation and also removed manufacturing process disputes from the complaint. This led to analyses within the pharmaceutical industry that Hugel had gained the upper hand, as the two most critical issues were consecutively excluded, resulting in the trial focusing only on relatively minor trade secrets such as personnel outflow.
Jonghyun Park, a researcher at Daol Investment & Securities, said, "With Hugel's 'no infringement' ruling, uncertainties regarding its North American business have been resolved," adding, "Hugel's Retivo is expected to penetrate the market quickly, and the toxin market remains an oligopoly where stable market share can be secured." On the same day, Hugel's stock price rose by 14.08% at the opening compared to the previous day's closing price, while Medytox's fell by 2.57%. Daewoong Pharmaceutical also rose by 3.82% at market open.
This decision is an initial determination made by a single administrative law judge, and a final ruling is expected from the full six-member commission in October. Medytox expressed "deep regret over the initial ruling and will immediately request a review by the commission." A company representative stated, "Hugel's botulinum toxin products are still illegal," and emphasized, "This decision is only the initial stage in the decision process, which includes the full commission, the U.S. Court of Appeals, and the President." A source from the domestic pharmaceutical industry commented, "In the previous Medytox-Daewoong dispute, the final ruling significantly reduced sanctions against Daewoong, so Medytox seems to be hoping for the opposite outcome this time. However, since the initial determination judged that no intellectual property infringement occurred, it seems unlikely that the final ruling will overturn this result."
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