Evolus, Inc. Class Action Lawsuit
- Company Name
- Evolus, Inc.
- Stock Symbol
- Class Period
- February 1, 2019 to July 6, 2020
- Southern District of New York
The Evolus, Inc. class action lawsuit charges Evolus and certain of its senior executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers or acquirers of Evolus common stock between February 1, 2019 and July 6, 2020, inclusive (the “Class Period”). The Evolus class action lawsuit was commenced on October 16, 2020 in the Southern District of New York and is captioned Malakouti v. Evolus, Inc., No. 20-cv-08647.
Evolus operates as a medical aesthetics company that develops, produces, and markets clinical neurotoxins for the treatment of aesthetic concerns. Evolus’s sole product is Jeuveau™, which is a purified botulinum toxin indicated for the temporary improvement in the appearance of moderate to severe frown lines in adults. Evolus’s direct competitor in this space is Botox®, which is manufactured by Allergan plc and Allergan Inc. and distributed by Medytox Inc.
The Evolus class action lawsuit alleges that, to secure an rapid influx of revenue for Jeuveau™, defendants disseminated dozens of public statements in which they promoted Jeuveau™ as a proprietary formulation of the botulinum toxic type A complex, purportedly developed by Korean bioengineering company Daewoong through years of clinical research and millions of dollars’ worth of investment in research and development. Among other things, the Evolus class action lawsuit alleges that Evolus promised investors that it would attain the number two U.S. market position within twenty-four months of launch.
The Evolus class action lawsuit alleges that throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (i) the real source of Evolus’s botulinum toxin bacterial strain, as well as the manufacturing processes used to develop Jeuveau™, originated with Medytox and were misappropriated therefrom; (ii) sufficient evidence supported the allegation that Evolus misappropriated certain trade secrets relating to the botulinum toxin strain and the manufacturing processes for the development of Jeuveau™; (iii) any revenues generated from the sale of Jeuveau™ were based on Evolus’s unlawful activities, including the misappropriation of trade secrets and secret manufacturing processes belonging to Allergan and Medytox; and (iv) as a result of the foregoing facts, Evolus faced a real threat of regulatory and/or court action, threatening Evolus’s ability to commercialize Jeuveau™ in the United States and generate revenue.
On July 6, 2020, the U.S. International Trade Commission (“ITC”) issued its Initial Final Determination in a case brought by Allergan and Medytox against Evolus alleging that Evolus stole certain trade secrets to develop Jeuveau™. The ITC found that Evolus had misappropriated the botulinum toxin strain, as well as the manufacturing processes that led to its development and manufacture, and recommended a ten-year ban on Evolus’s ability to import Jeuveau™ into the United States and a cease and desist order preventing Evolus from selling Jeuveau™ in the United States for ten years. On this news, the price of Evolus stock fell more than 37%, damaging investors.
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