[Edaily Reporter SONG YOUNG-DOO ] Kolon TissueGene’s TG-C, a cell-gene therapy for osteoarthritis, failed to demonstrate efficacy in the first topline results from its U.S. Phase 3 clinical trial. At the 12-month mark, both the WOMAC (joint function) and VAS (pain)—which were co-primary endpoints—showed improvement compared to pre-treatment levels, but did not achieve statistical significance compared to the placebo group.

Furthermore, the fact that the top-line data was analyzed directly by the company’s internal analysis team—rather than a contract research organization (CRO)—was specifically noted in the disclosure, sparking controversy over the appropriateness of the entity conducting the analysis, separate from the clinical results themselves.

According to the topline results released by the company today, TG-C failed to demonstrate statistically significant efficacy compared to the placebo for both the VAS pain score and the WOMAC total score—the co-primary efficacy endpoints at the 12-month mark.

The mean reduction in VAS pain scores from baseline was -38.7 in the TG-C group and -39.2 in the placebo group. The difference between the two groups was 0.5, with a 95% confidence interval of -4.3 to 5.3 and a p-value of 0.8322. The degree of pain improvement was virtually similar in both groups, although numerically, the placebo group showed a 0.5-point greater improvement.

The average reduction in the WOMAC total score from baseline was -27.61 in the TG-C group and -26.54 in the placebo group. Although the improvement in the TG-C group was numerically 1.07 points greater than that in the placebo group, the 95% confidence interval for the between-group difference was -4.75 to 2.62, which included zero, and the p-value was only 0.5701. Consequently, no statistically significant difference compared to the placebo was observed for the WOMAC score either.

Taking both measures into account, while it is true that patients’ pain and joint function improved from baseline following TG-C administration, a similar level of improvement was observed in the placebo group as well, meaning that the treatment effect specific to TG-C could not be demonstrated. In particular, the p-values for VAS and WOMAC were 0.8322 and 0.5701, respectively—well above the statistical significance threshold of 0.05—making it difficult to characterize the results as a borderline failure that nearly achieved statistical significance.

The company identified the placebo response—which was higher than anticipated at the time of clinical trial design—as a major factor influencing these results. It is currently conducting a comprehensive, detailed analysis, including subgroup analyses, to determine the magnitude and underlying causes of the placebo response.

Controversy Over Top-Line Analysis Conducted Internally Rather Than by a CRO

Along with the failure to demonstrate efficacy in this Phase 3 clinical trial, another point of controversy is who conducted the top-line data analysis. This is because the company revealed that its internal analysis team directly calculated the results, rather than a Contract Research Organization (CRO) or an external statistical agency, which are typically used for such tasks.

Kolon TissueGene stated in a regulatory filing that day, “We did not outsource the top-line data analysis to a Contract Research Organization (CRO) but conducted it through our internal analysis team,” adding, “The date of occurrence is the date on which our researcher in charge of data analysis signed off on the top-line results report.”

The fact that Kolon TissueGene’s stock price recently exhibited sharp volatility ahead of the topline announcement is believed to have contributed to the controversy surrounding the company’s in-house analysis.

Kolon TissueGene’s stock price hit a 52-week high of 138,800 won on May 12. Subsequently, as the top-line announcement approached, profit-taking selling pressure emerged, causing the price to drop to the 94,000-won range on July 7.

The downward trend continued. On July 14, the stock traded in the 69,800 won range after plunging 8.9% intraday, and on July 16, it closed at 62,100 won, down 20.28% from the previous trading day. During intraday trading that day, the price fell as low as 55,400 won—nearing the daily price limit—before partially recovering its losses.

Typically, in Phase 3 clinical trials, a CRO or external statistical agency handles data management and statistical analysis, while the sponsor—a pharmaceutical or biotech company—reviews the results and uses them for public disclosures or investor relations (IR) presentations. However, if the sponsor has its own biostatistics staff, it is possible for the sponsor to conduct the analysis directly after the database is locked. A CRO is not required to handle the topline analysis.

Experts Divided… “Concerns About Objectivity” vs. “No Procedural Issues”

Expert opinions were divided regarding the company’s decision to analyze clinical topline data in-house. An industry expert well-versed in cell and gene therapy development pointed out that the company’s decision to calculate topline results internally, rather than outsourcing the analysis to a CRO, could raise concerns about objectivity.

“Generally, the structure where a company receives and announces results objectively analyzed by a CRO is widely used,” he said. “If the company performs the analysis itself, the market will inevitably question its objectivity, regardless of whether the results are good or bad.”

On the other hand, the CEO of a biotech company developing a treatment for osteoarthritis judged that conducting the analysis in-house should not be viewed as a procedural issue.

He explained, “Clinical trials are conducted with data analysis methods predetermined in the protocol and statistical analysis plan,” adding, “Once data lock is applied and the trial is unblinded, the raw data is delivered to the sponsor, and the subsequent analysis and interpretation processes are often led by the sponsor or conducted in collaboration with a CRO.”

In particular, he noted, “Once data lock is in place, the system does not allow the sponsor to arbitrarily alter the data,” adding, “The fact that the analysis was conducted internally does not, in and of itself, mean it is unethical or an irregular procedure.”

Ultimately, this means that to assess the appropriateness of an in-house analysis, one must not only consider who performed the analysis but also comprehensively verify whether the database was locked, whether the pre-approved statistical analysis plan was followed, the reproducibility of the analysis program and results, and consistency with the Clinical Study Report (CSR) to be published in the future.

Kolon TissueGene: “We Have In-House Data Analysis Capabilities”

Regarding the reason for conducting its own analysis of the topline data, Kolon TissueGene explained, “There is no specific reason,” adding, “It is simply because we have an in-house team capable of performing this task.”

A company official said, “The CRO collected all the data, completed the cleaning process, applied a data lock, and then transferred the locked raw data to the company,” adding, “The subsequent analysis was handled by Kolon TissueGene’s internal team.”

A data lock is a procedure in which the database is locked to prevent further modifications after the clinical data has been refined and verified for errors. Once locked, it is difficult to arbitrarily modify the data without a change log or audit trail.

The company explained that there were also time constraints during the topline analysis and disclosure process. A company official said, “Since we were subject to disclosure obligations—meaning we had to disclose the results the moment they were confirmed—we lacked the time to conduct additional analyses,” adding, “We plan to continue conducting additional analyses of the topline data.”

However, even if additional analysis reveals differences among specific subgroups or by institution, it will not alter the fact that the pre-specified co-primary endpoint failed to meet statistical significance. The key issues moving forward will be how convincingly the cause of the placebo response is elucidated in the additional analysis and whether statistical significance can be achieved in the second U.S. Phase 3 clinical trial, scheduled for announcement this October.