Kolon TissueGene [950160]'s osteoarthritis treatment 'TG-C' failed to secure meaningful efficacy in the first phase of U.S. clinical stage 3, causing the stock price to plummet nearly 30%. The company dismissed the result as "half a success, not a failure" and attributed it to the 'placebo effect,' acknowledging a delay in commercialization, but is now pinning its last hopes on the second phase results to be released in October, as the shadow of the past 'Invossa' scandal looms.

Kolon TissueGene announced that the first phase of U.S. clinical stage 3 showed no meaningful difference in efficacy between the TG-C treatment group and the control group. Upon hearing this news, Kolon TissueGene's stock price plummeted nearly 30% in a single day, shocking investors. Co-CEO Jeon Seung-ho of Kolon TissueGene expressed his "regrets" about the stock price crash.

At a press conference held at Kolon One&Only Tower in Gangseo-gu, Seoul, Co-CEO Jeon Seung-ho claimed that the result was "not a failure, but half a success in that it showed effects exceeding previous clinical trials." CEO Noh Moon-jong of Kolon TissueGene also said "The efficacy of TG-C was reproduced, but a large placebo response appeared," pointing to the unexpectedly high placebo effect as the cause of the failure. The company announced that the commercialization schedule for TG-C will be delayed as a result of the first phase.

Andy Wayman, Chief Medical Officer (CMO) of Kolon TissueGene, said the company plans to complete analysis of the causes of the first phase results by the end of this year. Additional clinical possibilities were also mentioned. Kolon TissueGene is pinning its hopes on another U.S. clinical stage 3 phase 2, whose results are expected to be released around October. The company believes that if the FDA's revised guidelines are applied and the second phase results are positive, approval discussions could also be possible.

[Photo=Yonhapnews]

Co-CEO Jeon Seung-ho appeared conscious of investor anxiety caused by the stock price crash, describing this clinical setback as "growing pains" and trying to reassure with a message that "it is not the end." The company emphasized its determination not to give up despite the core new drug development facing difficulties.

However, TG-C was previously released domestically under the name 'Invossa,' but its product license was revoked in 2017 due to issues with unapproved kidney-derived cell components. For this reason, there are concerns in the market that this clinical setback may be a repeat of the past 'Invossa' scandal nightmare.

Kolon TissueGene is accepting this first phase clinical setback as "growing pains" and pinning its last hopes on the second phase clinical results to be released in October. However, considering the market's distrust due to the past 'Invossa' scandal, already delayed commercialization schedule, and the uncertainty of the second phase results, the future of TG-C remains shrouded in fog. Market attention is focused on whether Kolon TissueGene can overcome this crisis and achieve a comeback.