US private equity firm Bain Capital’s plans to acquire botulinum toxin maker Hugel
has rattled its Korean rivals who are seeking to get a foothold in the US market.
Besides Hugel, local firms Medytox
and Daewoong Pharmaceutical
are also preparing to tap the US market with affordable anti-wrinkle injections. North America is currently cited as the largest botulinum toxin market in the world. Related:
Bain to acquire Korean botox maker HugelBain-backed Hugel to look for new US retail partner
On April 17, Hugel said Bain Capital will acquire over 40-percent stake in the firm. The announcement took its rivals by surprise, and they are worried it could give Hugel a leg-up in entering the US.
“Bain Capital’s extensive health care network in the US and Europe could help push Hugel’s overseas business,” said Kim Ho-jong, an analyst at Samsung Securities.
Hugel’s flagship botulinum toxin product Botulax is undergoing the final phase 3 clinical trials in the US in partnership with Austria-based Croma Pharma. The firm is aiming to clear US regulatory hurdles by the end of 2018.
It is not recognized globally, but domestically the company recorded the highest botulinum toxin product sales in 2016. The firm is now turning to larger markets such as the US and Europe. Korea’s botulinum toxin market accounts for just 2.5 percent of the global market valued at 4 trillion won (US$3.53 billion).
Among the three firms, Daewoong is cited as most likely to enter the US market first. Its botulinum toxin Nabota will hit the US market early next year as the late-stage clinical study was successfully completed in 2016.
Due to a confidentiality agreement it signed with US biotech venture Alphaeon, the Korean firm has not disclosed whether it has applied for the US Food and Drug Administration’s sales approval. Alphaeon holds exclusive distribution rights to Nabota in the US and European markets.
“So far it has been smooth sailing,” a Daewoong spokesperson told The Investor, declining to further comment on the anticipated impact of Hugel-Bain tie-up on its market expansion plans.
Meanwhile, analysts appeared to be optimistic about Nabota’s prospects.
“Daewoong will see Nabota’s exports grow further from next year as it is expected to seek FDA approval this month,” said Kwak Jin-hee, an analyst at Eugene Investment and Securities.
The key strategy Daewoong has deploying in boosting Nabota sales has been its cheap price. It sells around US$50, as against Allergan’s Botox which costs US$200.
Medytox, which was the first to sell its self-developed botulinum toxin in Korea, is lagging behind its two rivals in terms of US market entry.
Although Medytox has partnered with Allgeran, which has an 85-percent US market share, it will begin phase 3 clinical trials for its liquid-injectable product Innotox only later this year.
Industry watchers believe Hugel and Daewoong could pose a threat to Allergan and its dominant market position.
“Allgergan needs to move faster to fend off the Korean competitors as they appear to be grabbing its market share quicker than expected,” an industry source said.
By Park Han-na (email@example.com