Medytox sold some of its shares in Evolus in the United States, where it maintained the largest shareholder status, raising questions among industry watchers.

Evolus is also the U.S. partner of Daewoong Pharmaceutical in marketing the latter’s botulinum toxin product Nabota.

In a public filing Wednesday, Medytox said it would sell 2,185,511 Evolus shares worth 23.2 billion won ($18.4 million), or 5.75 percent of the U.S. company’s net worth of 430.6 billion won. After the sell-off, Medytox’s equity stake in Evolus will fall to 9.13 percent or 5,071,989 shares.

The stock sale comes two years after Medytox secured a stake in Evolus.

In February 2021, Medytox reached an out-of-court settlement with Evolus in an intellectual property infringement case on the condition of securing about 6.76 million shares of the U.S. company's stocks. It also agreed to receive settlement payments and royalties from sales.

Earlier, Medytox and its U.S. partner Allergan (now acquired by AbbVie) filed a suit against Daewoong and Evolus with the International Trade Commission (ITC) and a district court, claiming the latter had stolen their botulinum toxin strain. However, they dropped all lawsuits filed with the district court after the three-party agreement.

Afterward, Medytox continued to acquire Evolus shares to emerge as its largest shareholder but dropped to the third-largest shareholder status due to this sell-off. Evolus still sells Navota in the U.S. in partnership with Daewoong.

Medytox said it decided to sell its shares to "enhance management efficiency."

“We have been the largest shareholder of Evolus but has never been involved in its management,” a Medytox official said. “You may regard it as the realization of profits of sorts.”

The industry watchers say that Medytox sold Evolus shares to secure cash. They analyzed that the company has set about to secure cash by selling Evolus shares because it is difficult to raise funds due to the economic downturn.

“Just because Medytox owns a stake in Evolus doesn't mean it's generating revenues, so it seems as if the company sold its shares to secure cash,” an industry executive said.

Medytox also faces the lower court ruling of a civil lawsuit filed in connection with the theft of botulinum toxin strains. It has been six years since it filed a lawsuit against Daewoong in October 2017. Medytox claimed Daeweeong pays 50.1 billion won as compensation.