The prolonged dispute between Medytox and Daewoong over the origin of Nabota, the latter’s botulinum toxin (BTX) strain, will likely see results as the U.S. International Trade Commission (ITC) has ordered Daewoong to submit Nabota’s strain by Wednesday.
The investigation comes after Allergan and Medytox submitted a complaint to the ITC claiming that Daewoong developed the treatment using stolen manufacturing secrets and turncoat former employees.
According to Cleary Gottlieb Steen & Hamilton, Medytox’s U.S. counsel, the administrative law judge overseeing the ITC investigation has ordered Daewoong to provide access to its facility so that Medytox’s experts can test Daewoong’s BTX strain, and also ordered Daewoong to provide other related documents and information.
“Daewoong had objected to providing its BTX strain and related documents, but the ITC rejected Daewoong’s arguments and approved Medytox’s request for the strain and related documents,” the U.S. law firm said. Daewoong had previously stated that the ITC might deny the request citing a similar rejection by the U.S. Food and Drug’s Administration for Medytox’s “citizen petition” against Nabota in February of this year.
With the ITC ordering Daewoong to submit related information, Medytox expressed its confidence that it would finally be able to confirm that Daewoong had stolen its trade secret.
“We have submitted a list of several domestic and overseas experts, who can verify the strain both scientifically and fairly, to the ITC,” a company spokesperson said to Korea Biomedical Review. “Although we are not certain when the results will come out, as the process has to be fair, the company is certain that it will be able to reveal illegal activities of Daewoong by various verification methods such as whole genome sequencing analysis.”
Daewoong said that it would sincerely cooperate with the ITC’s investigation to clear its name. “We will be able to prove all false claims made by Medytox against Nabota’s strain as well as the manufacturing method, and resolve the dispute completely,” the company said.
However, if the outcome of the ITC investigation supports Medytox’s claim, the ITC may decide on remedy methods such as prohibiting the import of Nabota into the U.S. Such actions will likely hamper Daewoong’s growth drive as the company is set to enter the U.S. market for Nabota after receiving FDA approval in February.
ICT’s final decision may also affect on-going litigations in Korea and the U.S. In 2017, Medytox filed a suit with a California court against Daewoong and its U.S. partner Alphaeon for allegedly stealing the company’s botulinum toxin (BTX) strain to produce Nabota.
At the time, the court ordered the companies to settle the dispute in Korea first and put the case on hold saying that the matter will be discussed on April 13, 2018. Afterward, Medytox filed several complaints, including the prohibition of trade secret infringement, with a Seoul district court last year.
In the short term, the ITC’s decision has affected the company’s share price. As of 10:30 a.m., Daewoong Pharmaceutical’s shares stood at 178,000 won ($150), down 5.82 percent from the previous trading day.
The ITC’s decision is likely to come out no later than June of next year, as the U.S. customs act mandates that all ICT procedures be finalized within 15 months.
The investigation may also cause a huge ruckus among local BTX manufacturers as Medytox has brought up similar allegations regarding the origin of BTX strains developed by about 20 local companies.
“The ITC investigation will give us a chance to verify scientifically more than 20 local companies that are conducting BTX business with unknown source of origin,” the Medytox spokesperson said.