Evolus Gets Second Chance in Botox Battle With Abbvie’s Allergan

Evolus Inc. got a second chance to persuade a U.S. trade agency to let it continue importing Jeuveau, a rival to the Botox wrinkle treatment made by AbbVie Inc.’s Allergan.

The U.S. International Trade Commission said it will review a judge’s findings that Jeuveau is made with a secret process stolen from Allergan’s Korean partner, Medytox Inc. A final decision in the case is expected in November. Trade Judge David Shaw has recommended a 10-year ban on Jeuveau imports.

Evolus was up 3.5% to $3.64 at 9:49 a.m. in New York trading after jumping as much as 6.8% on the news. Evolus and Daewoong said they are committed to reversing the judge’s “misguided” findings.

Allergan and Medytox have claimed that Evolus and its partner, Daewoong Pharmaceutical Co., developed Jeuveau using a stolen trade secret for a way to turn the deadly botulinum toxin into a wrinkle treatment. Evolus says an import ban of its only product would be “catastrophic” to the company.

A key issue for the commission is whether it has the authority to act in the case. Evolus and Daewoong argue that it’s a dispute over Korean trade secrets allegedly stolen in Korea, so an American trade agency shouldn’t be stepping in since it’s already being considered in Korea.

The case “upends the established principles governing trade secret cases at the ITC, to the detriment of consumers,” Shubha Ghosh, a law professor at Syracuse University, said in a letter to the commission. He said “an unmodified, naturally-occurring organism that has no secret informational value” shouldn’t be granted trade secret status.

Allergan and Medytox contend that a former Medytox employee handed over to Daewoong the results of its “meticulous, time-consuming, and expensive research” into a new process to make a beauty treatment based on one of the world’s deadliest toxins.

The process to turn the toxin into Botox, which also is used to treat chronic migraines and urinary incontinence, has been a closely kept secret by Allergan, allowing it to maintain its dominance since it was first approved for sale in 1989.

The trade secret in this case is for a next-generation drug developed with Medytox for a liquid-type version called MT10109L that’s seen as easier to use than Botox. It’s not available in the U.S.

The agency is set up to protect U.S. markets from unfair trade practices. Evolus and Daewoong said that Allergan shouldn’t be allowed to use Botox as the basis for defining the market, when the allegedly stolen trade secret isn’t for the wrinkle treatment.

Allergan and Medytox said the stolen secrets were used to create “a product that is specifically targeted at disrupting and gaining a substantial share of the domestic market,” which puts the case in the ITC’s jurisdiction.

More than four dozen dermatologists have written in support of Evolus, saying patients prefer Jeuveau because of its performance, duration and lower price over the “800-pound gorilla” of Botox.

The case is In the Matter of Certain Botulinum Toxin Products, Complaint No. 337-1145, U.S. International Trade Commission (Washington).

(Updates with stock movement in third paragraph.)

To contact the reporter on this story:
Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editors responsible for this story:
Jon Morgan at jmorgan97@bloomberg.net

Elizabeth Wasserman

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