US ITC rules in favor of Hugel in dispute with Medytox over origin of BTX

Hugel said that the U.S. International Trade Commission (ITC) has issued an initial determination finding no violation by Hugel in the investigation (Inv. No. 337-TA-1313) brought by Medytox Inc. regarding the importation of Hugel's botulinum toxin products into the U.S.

According to Hugel, the ITC judge ruled that Medytox's claims of strain theft were not substantiated and determined that importing certain botulinum toxin products and their manufacturing processes into the U.S. does not violate Section 337 of the Tariff Act of 1930.

The case comes after Medytox accused Hugel of stealing its strains and manufacturing processes, filing a complaint with the ITC against Hugel, its U.S. subsidiary Hugel America, and its U.S. distribution partner Chroma Pharma in March 2022.

The ITC accepted Medytox's complaint in May that year, initiating the legal battle between the two companies. Hugel indicated that it would seek additional legal actions against Medytox if the ITC investigation confirmed that Medytox's complaint was false.

Medytox claimed that Hugel's assertions concerning the source of its Clostridium botulinum lacked credibility, alleging that the strain was stolen in 2001 from Medytox CEO Jung Hyun-ho, who was a university professor and developer at the time.

Medytox's complaint further contended that Hugel's claim of discovering a novel strain of C. botulinum from a food source in Korea in 2002 was dubious, as there had been no reported cases of developing botulinum toxin from a food source in Korea until 2003.

During the ongoing litigation, Medytox reviewed evidence submitted by Hugel during the discovery process.

Subsequently, in Sept. and Oct. 2023, Medytox withdrew its trade secret misappropriation claims regarding the botulinum strain, followed by the withdrawal of claims concerning the botulinum toxin manufacturing process this past January.

"The initial determination has revealed that Medytox's allegations of strain theft against Hugel were unfounded," a Hugel official said. "We will continue to vigorously defend our position and fully engage in the legal process leading up to the final determination scheduled for October."

When asked about the possible future litigations against Medytox, the official told Korea Biomedical Review that it is too early to comment on any matter as the final determination has not been made.

Regarding the ITC intial determination, Medytox stressed that the company was "very disappointed" with the ITC's preliminary ruling that found no violations by Hugel.

"However, we still believe that Hugel's botulinum toxin products are illegal and cause significant harm not only to Medytox but also to the U.S. market," a Medytox spokesperson said. "The administrative judge's decision is only at an initial stage in the decision-making process, which includes the full Commission, the U.S. Court of Appeals, and the U.S. President."

The company will request a review by the full Commission of the ITC, which makes the final decision, and believes that after reviewing all the evidence and arguments, the full Commission will impose a ban on the product, he added. 

Following Hugel's announcement about the ITC ruling, Hugel shares surged 8 percent to 230,000 won as of 9:28 a.m. on Tuesday. 

Medytox shares, in constrast, fell 4.4 percent to 137,000 won as of 9:29 a.m. on Tuesday.