Orange County Business Journal

Federal Court Slaps Injunction on Potential Botox Competitor

Vita Reed Wednesday, March 7, 2012

A federal court judge has blocked a competitor to Irvine-based drug maker Allergan Inc.’s flagship Botox after allegations that trade secrets were stolen.

U.S. District Judge Andrew Guilford issued an injunction against Germany’s Merz Pharma GmbH after a non-jury trial. Guilford said that his written findings and conclusions would be issued at the end of the week with an order specifying the injunction’s term and length, according to Bloomberg.

Merz was scheduled to introduce its Xeomin drug for cosmetic use to compete with Botox Cosmetic at the March 12 annual meeting of the American Association of Dermatology in San Diego.

Allergan sued Merz, its U.S. units and a number of former Allergan sales representatives in 2010. Allergan alleged that Merz hired representatives from Allergan who brought along confidential materials, including sales figures and customer lists. The hires came as Merz prepared to sell Xeomin for certain muscle spasms, according to Allergan.

The judge mentioned what he called “dramatic examples of misappropriation” of proprietary Allergan information. He said he was troubled that some Allergan employees signed contracts with Merz and then delayed giving notice of their intention to switch jobs, apparently to allow time to e-mail Allergan data to themselves.

Guilford’s ruling appears to be a move toward “encouraging settlement,” said Rick McKnight, an attorney for Merz.