[Photo by Yonhap]
Shares of South Korea’s botulinum toxin maker Medytox Inc. Monday hit their daily ceiling after it resolved botox dispute in the United States by becoming the second largest shareholder of Evolus, a U.S. partner to its rival Daewoong Pharmaceutical Co., in a settlement between American sales agents to the two rivalling Korean botox makers following the International Trade Commission’s import ban ruling against Daewoong’s botox products.
In December last year, the ITC ordered a 21-month import ban after finding Daewoong stole trade secrets for a manufacturing process.
Under the terms of the settlement agreements released to the U.S. Securities and Exchange Commission (SEC) last weekend, Evolus will issue 6.76 million common stocks worth 53.5 billion won ($48.3 million), or a 16.7 percent stake, to Medytox, while paying the settlement money of $35 million to Medytox and Allergan over the next two years. Medytox and Allergan will release all claims against Evolus related to the alleged misappropriation of Medytox`s trade secrets and grant a license to Evolus to continue to commercialize Jeuveau, the U.S. brand name of Daewoong’s botox products.
Medytox and Allergan will also receive milestone and royalty payments from Evolus based on Jeuveau sales from 21 months from the ITC’s final ruling in December. After the 21-month period, only Medytox will receive royalty payments from Evolus.
Shares of Medytox soared by the daily limit of 30 percent to 197,600 won. Those of Daewoong also gained 14.3 percent to close Monday at 155,500 won upon the resolution of the legal issue and marketing uncertainties in the U.S.
Daewoong Pharmaceutical invested 48 billion won in Evolus after the ITC’s preliminary ruling last year to acquire 3.07 million convertible bond issues of Evolus, placing the U.S. company under the influence of both rivaling Korean companies.
The settlement would close all legal action taken by Medytox against Evolus in California and invalidates the ITC ruling. After its legal fight with Daewoong that began in 2016, Medytox lost its market leadership to another rival Hugel in Korea, while facing license revocation of its key products by health authorities for alleged criminal wrongdoing.
The settlement does not affect ongoing legal fights between Medytox and Daewoong in Korea.
Daewoong Pharmaceutical said it has not agreed to the three-party settlement, but will completely address business risk in the U.S. by speeding up market penetration based on its advanced quality and technology.
By Kim Si-gyun and Minu Kim
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