Medytox response draws ire from shareholders

Medytox’s claims that its botulinum toxin product Meditoxin presents no safety issues is drawing ire from shareholders and skepticism from the Drug Ministry.

The Korean Drug Ministry suspended the manufacturing and sale of Meditoxin on April 17 due to concerns that the product was made using unapproved materials between 2012 and 2015.

On Tuesday, Medytox released a statement saying it had filed an administrative complaint with the ministry, asking it to reverse the suspension order on the grounds that the products in circulation now were made since 2017 and therefore the concerns are irrelevant. It argued that the order is based on reports from a whistleblower with “ulterior motives.”

Law firms representing shareholders and the supposed whistleblowers lambasted the company.

Lawyer Koo Young-shin of law firm Jehyun said there was more than one whistleblower attesting to Medytox’s alleged laboratory irregularities. Contrary to Medytox’s claims, Koo said, the balance of evidence suggests that the company manufactured its toxin product on multiple occasions using unspecified materials in non-aseptic conditions.

Botulinum toxin is a lethal substance more potent than anthrax, and abiding by strict regulations is of the utmost importance, Koo said in her report.

Law firm OhKims’ lawyer Um Tae-seob, representing Medytox’s shareholders, accused the company of “trying to deceive people” with a promise to strengthen its fiscal status with Innotox and Coretox sales. OhKims also said the company cannot dodge liability for misleading shareholders between 2012 and 2015 to invest in Medytox.

In 2019, the industry estimated that Innotox and Coretox accounted for 10 percent of Medytox’s revenue, while Meditoxin took up over 40 percent.

Medytox shares closed Wednesday 14 percent lower from the previous day at 110,900 won ($90).

By Lim Jeong-yeo (kaylalim@heraldcorp.com)