Some uncertainties over Medytox’s botulinum toxin business have been cleared after Medytox agreed with Daewoong Pharmaceutical’s U.S. partner Evolus to get settlement money and royalties for dropping all lawsuits against Daewoong in the U.S.

Medytox also obtained export approval for newly produced BTX products.

However, investors should still remember that Medytox was suspected of illegally selling BTX items in China, industry watchers warned.

On Monday, Hana Financial Investment released a report, saying Medytox could recover earnings from the second quarter this year.

Analyst Sun Min-jeong said that Medytox’s sales tanked in the fourth quarter last year because the Ministry of Food and Drug Safety revoked export approval for five BTX products – Meditoxin Inj. 50, 100, 150, 200 unit and Coretox Inj.

However, the company’s recent winning of export approval for new BTX goods is likely to resume BTX export, the analyst said. “In particular, I expect that the company could ship BTX to China, which used to account for the largest share in its exports. Its BTX exports will recover in the second quarter to the level before the cancellation of the export permit last year,” she said.

In February, the ministry granted the nod for exporting Coretox and Meditoxin 150 unit, and on March 4, Meditoxin 100 unit. Although the company has filed a lawsuit against the ministry to nullify the administrative punishment, it grabbed a chance to ship newly produced BTX products.

However, some critics raised concerns over an excessively rosy outlook for Medytox. They said that the state export approval does not guarantee shipments to China and overseas sales.

Issues regarding the regulator’s administrative punishment remain unresolved.

Releasing a too optimistic forecast for the company’s sales could give investors a wrong signal, observers said.

Medytox has no authorized product it can sell in the Chinese BTX market. The company applied for new drug approval for Meditoxin (export name: Neuronox) in February 2018, but the regulatory review is pending for the third year.

Also, the ministry is investigating a case where Medytox is suspected of selling unauthorized BTX products in China based on data from the Korea Customs Service.

In October last year, the ministry ordered the company to recall and discard Meditoxin and Coretox and nullify the two products' licenses. On Feb. 24, the ministry raided the headquarters of Medytox to probe the alleged sale of BTX in China.

Medytox’s BTX export to other countries than China is also limited. In May last year, the FDA Thailand suspended the sale of Meditoxin and recalled all the Meditoxin products. The recall came after the ministry informed the FDA Thailand that the Korean regulator temporarily suspended the sale of Meditoxin due to the company’s use of unauthorized substances and fabrication of data.

“Medytox is under the regulator’s investigation due to the alleged smuggling of BTX, and it has yet to receive a license for BTX sale in China. Meditoxin products being sold in China are all illegal,” an industry official said. “Not mentioning these and trying to exaggerate sales could mislead investors.”

Medytox said the Hana Financial Investment’s report had nothing to do with the company’s position.

“We are waiting for the results of the review by the China Food and Drug Administration (CFDA),” an official at Medytox said. “We are preparing to export BTX to Asia and Brazil.”