In a high-profile legal battle, Medytox CEO Jung Hyun-ho was acquitted of charges related to the alleged illegal manufacturing and distribution of botulinum toxin (BTX) products in the first trial ruling.

Jung and several executives were accused of illegally manufacturing and distributing botulinum toxin products using unapproved raw materials between 2012 and 2015.

Prosecutors claimed that the company manipulated potency test results to obtain national lot release approvals and supplied these products to foreign trade partners without proper licensing, violating the Pharmaceutical Affairs Act.

The prosecution sought a six-year prison sentence for Jung, three years for former Medytox production head Park Seung-beom, and ten months to one year for three other executives. Prosecutors also requested a corporate fine of 45 million won ($30,961) for Medytox.

However, the Cheongju District Court rendered the verdict on Tuesday, dismissing most of the charges of violating the Pharmaceutical Affairs Act and obstruction of official duties against Jung and three other Medytox executives.

The court ruled that the evidence presented by the prosecution failed to substantiate Jung’s involvement in conspiring to obstruct official duties.

“Conspiracy must be proven through evidence,” the court said in its ruling. “Some of the prosecution’s evidence was obtained beyond the scope of the search and seizure warrant, rendering it inadmissible.”

The remaining legally accepted evidence does not sufficiently prove that the defendant conspired with Park, the court added.

The court also questioned the credibility of evidence submitted by Medytox’s competitors and internal company emails, ultimately deeming them unreliable.

Regarding the alleged violation of the Pharmaceutical Affairs Act, the court found that “The Ministry of Health and Welfare had previously indicated there were no related regulations on indirect exports in response to an inquiry from the Ministry of Food and Drug Safety (MFDS).”

The MFDS appears to have processed matters accordingly, and there is no clear restriction on indirect exports of pharmaceuticals, it added.

Based on these factors, the court determined that Jung and other executives could have misunderstood the legal framework regarding indirect exports, which justified their actions and negated criminal intent.

In contrast, the court found former Medytox production head Park guilty of obstruction of official duties and sentenced him to three years in prison and was taken into custody immediately due to flight risk concerns.

The court highlighted that Park had manipulated potency test results to obtain national lot release approvals over an extended period.

“The defendant knowingly falsified potency test results to gain product approval,” the ruling stated. “These actions could have posed a serious threat to public health, yet the defendant dismissed the risks.”

The court also ruled that Medytox, as a corporation, was liable for the misconduct and fined 30 million won for its involvement in the case.

Medytox declined to comment on the initial ruling.

However, while Medytox’s CEO has been acquitted for now, the company and its executives are not yet in the clear. As the prosecution prepares for an appeal, the case continues to draw widespread attention in both legal and pharmaceutical circles.

The final outcome could have lasting ramifications for Korea’s biopharmaceutical industry and its regulatory landscape, as it will set a precedent regarding regulatory interpretations of indirect exports and evidence admissibility in pharmaceutical litigation.