Newport Beach-based Evolus Inc., which is trying to compete with a new, cheaper version of Allergan’s Botox, has apparently won a significant round in a legal dispute in South Korea.
Medytox, which provides a botulinum toxin strain to Allergan, is accusing Daewoong Pharmaceutical, which also provides a botulinum toxin strain that Evolus uses to make its wrinkle smoothing product called Jeuveau, of copying its product.
In an Aug. 30 statement, Daewoong said tests conducted by appraisers determined that its toxin “is a different strain” than Medytox’s. The differences were corroborated by two independent labs in South Korea and France.
“The company will hold Medytox responsible for civil and criminal penalties for making false accusations,” Daewoong’s statement said.
Shares of Evolus (Nasdaq: EOLS) rose 20% in the three trading sessions after the results became known. The company sported a $470 million market cap last week.
“This is yet another positive development for EOLS in our view and should help lift an overhang on EOLS shares,” Cantor Fitzgerald & Co. wrote in a report. “The other positive development was the judge’s recent request of AGN/Medytox to make their trade secrets public for the case.”
It will be interesting to see if Allergan is willing to risk its trade secrets in this case against a smaller rival.
JET
Medytox argued that Daewoong’s claim “is only a narrow interpretation.” Medytox said it expects the manufacturing process “will be fully clarified” when the results of the two companies’ strains are to be submitted on Sept. 20 to the U.S. International Trade Commission.
Some of Evolus’ top executives, including Chief Executive David Moatazedi, are former officials at Allergan, which was based in Irvine until its 2015 sale.
Evolus continues to roll out Jeuveau. On Sept. 4, it announced the successful completion of its Jeuveau Experience Treatment, called JET.
“Within 90 days of launch, we achieved the number three market position in the U.S., ahead of expectations,” Moatazedi said in a press release.
The company is “highly confident” of reaching the No. 2 spot within two years, he said.
More than 5,400 accounts enrolled in the JET program while some 28,000 consumers filled out a survey, the company said.
