Korea Biomedical Review is publishing a series of articles to analyze the top 10 Korean pharmaceutical and biopharma companies with the largest market capitalizations listed on the main bourse, Kospi, and the tech-heavy Kosdaq. The series aims to reflect key industrial issues and the flow of the capital market in the Korean pharmaceutical and biopharma industry. This is the sixteenth installment. -- Ed.

Hugel, maintaining its position as the top player in the domestic botulinum toxin (BTX) market, is pushing ahead with its global market strategy this year.

Hugel's sales revenue and operating profit for last year amounted to 281.7 billion won ($217.8 million) and 102.5 billion won, up 21.5 percent and 7.2 percent from 2021.

Hugel's flagship BTX and filler products witnessed an impressive performance in overseas markets last year, surpassing domestic sales. The company posted 142.8 billion won in overseas sales, compared to 107.1 billion won for local sales.

With a significant increase in its global presence, the company set a goal to achieve a 20 percent growth in total revenue compared to 2022 and expand the proportion of overseas sales to 80 percent by 2025 at its 2023's Plan of Action (POA) meeting in February.

Hugel has already been aggressively expanding its business in other countries. 

The company has obtained product approvals in a total of 20 European countries including the U.K., France, and Germany.

In addition to Europe, Hugel is the only Korean company that has received approval for its BTX product in China. 

The company is soon to launch its BTX product in Canada and Australia, where it obtained approvals last year.

Particular focus on the US market

Entering the U.S. market is the company's biggest goal this year.

Hugel had previously applied for marketing approval for its BTX product Letybo (Korean name: Botulax) for the indication of moderate to severe glabellar lines in adult patients to the U.S. FDA at the end of March 2021, but the approval process was delayed due to complete response letter (CRL) from the FDA.

A CRL is a formal communication from the FDA to a company submitting a Biologics License Application (BLA) or New Drug Application (NDA) indicating that the application cannot be approved in its current form.

After incorporating the requested modifications, Hugel reapplied for product approval in October of last year. However, the company again received a CRL regarding a plant management issue.

The company is now working on addressing the issues before resubmitting the application.

Although the product approval for Letybo is still ongoing, Hugel is putting a lot of effort into bolstering the operation capacity for its U.S. subsidiary.

In early March, the company held a board meeting and approved an investment in Hugel America.

As a result, Hugel participated in a paid-in capital increase conducted by Hugel America worth $38.5 million (approximately 50.1 billion won) and acquired an additional 30,000 shares of Hugel America's stock.

As a result, Hugel's ownership of Hugel America increased from 70,000 shares to 100,000 shares, raising Hugel's stake in the company from 70 percent to 76.92 percent.

Commitment to new product development

Hugel is also making significant progress in the development of its next-generation liquid BTX product.

In June, the company received approval from the Ministry of Food and Drug Safety (MFDS) for the phase 3 clinical trial plan for HG102, a liquid BTX.

According to Hugel, HG102 is an innovative liquid formulation of the existing freeze-dried BTX. The candidate also includes lidocaine hydrochloride as a local anesthetic.

"The existing powder form requires gradual reconstitution and dilution with sterile saline solution and requires it to be used within 24 hours, resulting in inconvenience," the company said. "Furthermore, there is a risk of additional contamination during the saline solution injection, and if bubbles or vigorous agitation occur during dilution, there is a possibility of drug denaturation."

As a result, Hugel expects that HG102 will enhance convenience, safety, and precision during procedures.

 Positive outlook on 'indirect export' lawsuit

In light of Medytox's recent triumph in the "indirect export" lawsuit related to BTX, the anticipation for a comparable result has heightened for Hugel, as the company is currently entangled in a similar legal battle.

The Daejeon District Court ruled in favor of Medytox in the first sentencing hearing of the BTX license revocation administrative lawsuit filed by Medytox against the MFDS last Thursday.

Previously, the MFDS imposed a strong administrative measure, canceling the approvals for BTX products of several companies, including Medytox, Hugel, PharmaResearch Bio, Jetema, BMI Korea Aesthetics, and BNC.

Biopharmaceuticals currently sold domestically must go through a separate national lot release approval process to check for adulteration and foreign substances.

However, the MFDS argued that the companies engaged in "indirect export" by selling their BTX products to local distributors without getting lot release approval.

While the court's ruling details have not been disclosed, industry insiders speculate that providing BTX products to local distributors and wholesalers was interpreted as indirect exports instead of domestic sales.

If Hugel also wins the lawsuit, it would alleviate one of the company's major litigation concerns.

Ongoing litigation risks persist

While Hugel has managed to reduce domestic litigation risks, there are still ongoing risks in the U.S.

Hugel is currently engaged in a lawsuit with Medytox.

In March of last year, Medytox filed a complaint against Hugel, alleging suspicion of strain and manufacturing process theft, and requested an import ban on Hugel's BTX into the U.S. through the International Trade Commission (ITC).

While Hugel had requested early termination of the ITC lawsuit, citing delays in obtaining approval for exporting related documents from the Ministry of Trade, Industry and Energy, which caused significant disruptions to the company's operation, the ITC rejected the request.

As a result, the preliminary decision for the ITC lawsuit is scheduled for June 10, 2024, and the final decision for Oct. 10.

As the litigation prolongs, the related legal expenses are expected to increase.

Hugel spent a total of 12.5 billion won in litigation costs last year and estimated that it would spend another 22.5 billion won this year and 24 billion won in 2024.