Medytox's shares hit its upper limits on Tuesday, as a local court accepted the company's application for suspending the execution of an administrative order to nullify the license of its botulinum product while withdrawing and discarding those already made.

Medytox’s shares resurged on Tuesday as a court allowed the resumption of sales of its botulinum toxin product. (Medytox)

As of noon, the company shares stood at 243,100 won ($205), up 30 percent from the previous trading day.

The Daejeon District Court cited Medytox's application for suspending the execution of the administrative order issued by the head of the Daejeon branch of the Ministry of Food and Drug Safety last Friday. The decision suspended the revocation of the item license for Meditoxin for 30 more days from the date of the ruling.

On June 18, the ministry said it would revoke the sales license of Medytox's botulinum toxin product Meditoxin for fabricating test data on June 18. It then revoked the sales license of three of the company's products – Meditoxin, Meditoxin 50 unit, Meditoxin 100 unit – and imposed a fine of 174.6 million won on Innotox.

Medytox admitted in part the violations of the Pharmaceutical Affairs Law but filed an administrative lawsuit insisting that the cancellation of the product license was too harsh.

The company claimed there were few problems with the drug's safety and effectiveness, and the drug should not be suspended.

Hana Financial Investment, noting that the company has solved one of the biggest problems, raised Medytox's target share price from 330,000 to 400,000 won and held its "buy" opinion.

"We were concerned that earnings for the company would deteriorate significantly due to the decision to cancel the sales license of three of the company's products, which accounts for about 40 percent of Medytox’s sales," said Sun Min-jung, an analyst at Hana Financial Investment. "However, this concern has been resolved as Meditoxin can resume sales."

Sun also forecast that the company's sales performance would also improve.

Medytox posted a 4.1 billion won operating loss in the second quarter, the company's third consecutive quarterly loss since the fourth quarter of 2019.

"The second quarter's loss was due to 6.4 billion-won expenses that occurred due to litigation costs related to the ongoing U.S. International Trade Commission lawsuit with Daewoong Pharmaceutical," Sun said. "As the lawsuit has come to an end with the ITC preliminary decision on July 7, there will be no additional ITC litigation costs."

Medytox also received $20 million as a milestone related to Innotox's phase 3 clinical trial from Allergan.

According to Sun, the milestone payment has confirmed Allergan's intention to continue developing Innotox.

"Allergan plans to complete phase 3 clinical trials of Innotox at the end of the year. We expect they will apply for a sales permit in the U.S. in the first half of next year," Sun said.

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