Claims Daewoong Made False Disclosures about Nabota
Medytox announced on June 16 that it has filed a petition with the Financial Supervisory Service (FSS), requesting an investigation into Daewoong Pharmaceutical.
Medytox claims that Daewoong Pharmaceutical disclosed false information about Nabota development several times and did not properly disclose the damage that could be caused by a U.S. International Trade Commission (ITC) ruling. Medytox called on the FSS to take proper measures against Daewoong Pharmaceutical, such as imposing fines and bringing criminal charges against it.
While the U.S. ITC ruled that Daewoong Pharmaceutical developed Nabota by stealing Medytox's botulinum strains and manufacturing processes, Daewoong Pharmaceutical continued to write false information about the development of Nabota, Medytox asserted in the petition. It added that Daewoong Pharmaceutical did not properly disclose the risks of Nabota sales being suspended in the United States which were predicted from the time ITC litigation began.
In particular, Medytox stressed that Daewoong Pharmaceutical’s failure to disclose details of Nabota before the ITC ruling although Evolus notified Daewoong Pharmaceutical of matters about Nabota constitutes Daewoong Pharmaceutical’s violation of a disclosure obligation. Earlier in March 2019, Evolus announced in the 2018 Annual Report that if an unfavorable ruling is made by the ITC, the import, sale and marketing of Nabota may be prohibited in the United States and Daewoong Pharmaceutical may lose the right to the sale of Nabota and may have to negotiate a new license with Medytox to maintain its right to the drug."
Medytox explained that Daewoong Pharmaceutical was suspected of violating its disclosure obligation by exaggerating, reducing, or missing facts in other matters. In a related development, Medytox pointed out that the Korean Intellectual Property Office filed a complaint against Daewoong Pharmaceutical in April with the prosecution for a false act and that no information about Medytox’ two U.S. lawsuits against Daewoong Pharmaceutical in May were found in Daewoong Pharmaceutical’s public disclosure.
In addition, Medytox stressed that Daewoong Pharmaceutical habitually deceived shareholders such as exaggerating its export amount to 520 billion won, nearly double the 289.9 billion won listed in a 2013 contract to expert Nabota to the United States and changing the export amount of Pitavastatin Calcium Tab. from 72.8 billion won to 1.7 billion won in 2016.