Sihuan sues CBC over Botox trade secrets after due diligence

A subsidiary of Hong Kong-based Sihuan Pharmaceutical Holdings Group Ltd. has filed a lawsuit against healthcare-dedicated investment firm CBC Group for allegedly infringing trade secrets, according to a Sihuan statement dated September 27. The Beijing Intellectual Property Court has accepted the case. 

Sihuan has exclusive distribution rights in China for Hyaluronic Acid and Letybo®100U, a type A botulinum toxin for injection, produced by Hugel, Inc., South Korea’s top botox maker. In August, a consortium led by CBC Group agreed to acquire a 47% stake in Hugel Inc. from Bain Capital for 1.7 trillion won ($1.5 billion). On Sep. 30, Sihuan stated that it did not expect its distribution rights for the two products to be affected by the Hugel acquisition.

CBC Group conducted a due diligence on Sihuan and its subsidiary after the two parties entered into talks about cooperation and signed a confidential agreement in October 2020. The investigation performed led to nowhere, and CBC Group and Bain Capital instead reached the agreement on the acquisition of Hugel afterwards. Sihuan accused CBC Group of misappropriating the trade secrets obtained from the due diligence during its deal with Bain Capital.