이 기사는 2021년 11월 16일 08:09 thebell 에 표출된 기사입니다.

A consortium led by GS Group remains determined to proceed with its planned acquisition of Hugel despite the South Korean pharmaceutical company being at risk of being forced to stop selling some of its botulinum toxin products.

The country’s Ministry of Food and Drug Safety (MFDS) on November 10 said it will revoke licenses of six botulinum toxin products manufactured by Hugel and Pharma Research Bio for failing to get necessary approval to supply such products domestically, and ordered the companies to recall and dispose of them.

Following the agency’s move, Hugel immediately released a statement saying transactions regulated by the MFDS were made to export the products, which is not subject to domestic regulations, and took legal action to stop the order. A Seoul court’s decision on November 11 suspended the order until November 26.

Hugel was sold in August this year to a consortium consisting of GS Group, IMM Investment, CBC Group and Abu Dhabi sovereign fund Mubadala. The investors agreed to buy a controlling stake of 42.9% in the botox maker from Bain Capital for about 1.7 trillion won ($1.4 billion).

If the MFDS eventually cancels licenses of the botox products, this would inevitably impact Hugel’s financial results. The products subject to the state agency's order represent about one-third of the company’s total revenue.

However, undeterred by this risk, the GS-led consortium remains determined to complete the acquisition of Hugel.

“We identified this risk during due diligence and (the MFDS’s decision) won’t affect our plans to acquire Hugel,” the GS consortium said.

The consortium said it decided to invest in Hugel with a focus on the company’s potential to grow globally and that thus revocation of product license approvals by the MFDS would likely have limited impact on the company’s future growth strategy.

Hugel’s products completed clinical trials and are in the process of getting regulatory approvals for sales in the United States and Europe, which are expected to be completed in spring next year. The global botulinum toxin market is estimated to be valued at 6 trillion won to 7 trillion won.

Michael Keyoung, CBC Group’s managing director and head of North America and South Korea, said in an interview with the bell in October that they will grow Hugel into a global player. CBC Group, a Singapore-headquartered investment firm focused on pharmaceutical and medtech companies, will become the largest shareholder in Hugel after the deal closes.

The deal is subject to regulatory approval as a purchase by a foreign buyer of shares in a company that owns botulinum toxin technology needs to follow reporting requirements mandated by the South Korean government. If everything goes smoothly, the acqusition could be completed by January 12, 2022. (Reporting by Ha-na Suh)