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[Special] Two Korean botulinum toxin makers in court dispute in US. Why?Allergan vs. Daewoong -- full story of legal battle ①
  • By Park Gi-taek
  • Published 2020.02.28 17:07
  • Updated 2020.03.02 14:44
  • comments 0

The U.S. International Trade Commission is soon to make a ruling that will determine whether the No. 1 botulinum toxin (BTX) maker Allergan will be able to maintain its 70 percent market share in the U.S. Last year, Korean BTX manufacturer Medytox and its U.S. partner Allergan filed a complaint with the ITC that Daewoong Pharmaceutical and its partner firm Evolus stole the strain of Medytox’s botulinum toxin and a document describing the entire manufacturing process. On the surface, Medytox and Daewoong are in the legal battle over whether Daewoong stole Medytox’s BTX strain and manufacturing process. However, the issue is not as simple as it sounds. Considering the two are also in legal disputes in Korea and Medytox has yet to enter the U.S. market while Daewoong already has, the ITC case is more of a war between Daewoong and Allergan over the U.S. BTX market. On the occasion of the third anniversary of Korea Biomedical Review, we publish a serious of two articles to see what’s happening behind the lawsuits. – Ed.

Korea saturated with BTX products

The botulinum toxin, more widely known as Allergan’s product name Botox, is a toxic substance that inhibits neurotransmitters to paralyze muscles. It can treat diseases such as strabismus and polio. Its function of paralyzing muscles is also used for cosmetic purposes, such as removing wrinkles. In Korea, a BTX procedure is one of the representative cosmetic procedures, along with filler treatment.

However, not everyone can manufacture BTX. Many universities’ laboratories and companies around the world own a botulinum strain, naturally occurring in an anaerobic environment. However, a BTX product’s efficacy, stability, and safety require a complex manufacturing process, and regulatory bodies around the world strictly monitor the production procedures.

The demanding manufacturing process is the reason why there are only several rivals of Allergan’s Botox, although over 30 years have passed since Allergan won the license for Botox in 1989.

The Korean market situation, however, is somewhat different. Medytox obtained the first license for a BTX product (Meditoxin) in 2006, and other drugmakers rushed to join the market. Other BTX makers include Hugel (Botulax in 2009), Daewoong Pharmaceutical (Nabota (Jeuveau in the U.S) in 2013), Huons (Lixtox in 2016), Pharma Research Bio (Rientox in 2019), BNC Korea (Bienox in 2010), and BMI Korea (Hitox in 2020). Other companies, including Jetema, Protox, Kanzen, Eubiologics, and Ini Bio, are reportedly working on BTX, too. Combined with multinational BTX sellers such as Allergan, Merz, and Ipsen, the Korean BTX market is already saturated.

Medytox argued that one of the reasons why BTX manufacturers increased significantly in Korea was the poor management of the highly toxic strains of Medytox, which all other companies used to steal Medytox strains. Medytox adds that the poor management of deadly toxins is in Medytox. Medytox filed Daewoong among the companies for civil and criminal lawsuits against Korea.

‘BTX strain theft suspected’

In 2016, Medytox officially questioned that a rival firm could have stolen its BTX strain. Medytox referenced a report of the U.S. National Center for Biotechnology Information (NCBI) to claim that the sequence of its BTX product was 100 percent identical to that of Daewoong’s Jeuveau. In response, Daewoong said several other strains had the same sequence of Medytox’s BTX strain and questioned the legality of the original source of Medytox’s strain.

Medytox said it brought the BTX strain via Dr. Yang Kyu-hwan (former professor emeritus of Korea Advanced Institute of Science and Technology, and former Food and Drug Safety Administrator) when he came to Korea from the University of Wisconsin in 1979. Daewoong said it found its strain on the soil in Yongin, Gyeonggi Province. Daewoong argued that as Dr. Yang brought in the BTX strain after the 1972 Biological Weapons Convention, it must have been smuggling of a toxic substance that could be used as biological weapons. If it was illegal smuggling, Medytox could not claim its ownership, Daewoong argued.

The intensified disputes led to lawsuits. Medytox filed a criminal lawsuit against Daewoong in 2017, claiming that its former employee leaked the strain to Daewoong. In October 2017, the company also filed a civil lawsuit for the same reason and asked the court to judge whether the strains of the two companies produce spores. Medytox said that its strain "does not form spores under any conditions because it was not naturally extracted from the soil." If Daewoong’s strain does not form spores, it should be regarded as the same strain as Medytox’s, according to Medytox.

However, according to the result of the appraisal conducted by each company's recommended expert appraiser, the strain of Daewoong’s BTX formed spores. On the other hand, Medytox argued that spores were produced because Daewoong’s test method was different from that of Medytox. Thus, the test result is not valid to judge whether the strain was leaked or not, Medytox said.

In the criminal case, the prosecution completed the investigation on the accused, Daewoong. Due to the lack of evidence, however, the court has not ruled on the case for more than two years. Another civil lawsuit against Daewoong is also ongoing.

Why did Medytox, Daewoong take the case to US court?

Before pursuing a civil lawsuit in Korea, Medytox filed a lawsuit against Daewoong in the U.S. In June 2017, Medytox filed a complaint with the Superior Court of California of the County of Orange for the same reason. However, the court dismissed the case in April 2018, citing inappropriate jurisdiction. It meant that the issue had to be resolved in Korea, not in the U.S.

However, Medytox did not stop the legal fight in the U.S. In January 2019, the company and Allergan filed a complaint with the ITC. The ITC started a hearing of the case in early February based on the evidence and expert reports submitted so far. The administrative court is scheduled to make a preliminary ruling on June 5, and confirm the verdict on Oct. 6.

In December 2017, Meditox filed a petition with the Food and Drug Administration not to approve Daewoong’s BTX product until confirming the source of the strain. However, the FDA disagreed with the allegation, saying the strains of Medytox and Daewoong were not the same, and that Daewoong's statement included information distinguishing the two strains.

Daewoong obtained the FDA’s license for Jeuveau in February 2019 and is selling it in the U.S.

If Medytox wins the civil and criminal lawsuits, Daewoong will suffer a blow in the U.S. market. If Jeuveau is found to have been manufactured from a stolen strain, Daewoong will find it almost impossible to export the drug, if not manufacture it.

Medytox had to spend a large amount of money on litigation fees in the U.S. Noteworthy here is that Medytox has no authorized product in the U.S. The company has teamed up with Allergan to sell a liquid BTX product, different from existing powder-type drugs, in the U.S. However, this business strategy alone was not sufficient enough to pursue such large lawsuits in the U.S., observers said.

pkt77@docdocdoc.co.kr

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