[Kim Jin Su, Edaily Reporter] Shares of three Kolon Group affiliates plummeted Tuesday after Kolon TissueGene’s osteoarthritis cell and gene therapy TG-C—formerly known as Invossa—failed a late-stage U.S. clinical trial. Kolon TissueGene and Kolon Life Science, which holds the therapy’s commercialization rights, both fell by their daily limit, while Kolon Corp., the developer’s largest shareholder, pared some losses to close just above its intraday low.

NGeneBio, by contrast, surged to its daily upper limit as uncertainty over a planned rights offering cleared and the company strengthened its business foundation.

TG-C Fails to Demonstrate Efficacy; Kolon Group Shares Plunge

According to MP Doctor, the market data service operated by KG Zeroin (formerly Market Point), Kolon TissueGene opened at its daily lower limit and closed there at 42,900 won. Analysts attributed the drop to TG-C’s failure to achieve statistical significance in a Phase 3 trial conducted in the United States.

After the market closed on Monday, Kolon TissueGene disclosed the results of the U.S. Phase 3 study. The therapy missed both co-primary endpoints at 12 months—the pain score on the Visual Analog Scale (VAS) and the total score on the Western Ontario and McMaster Universities Osteoarthritis Index (WOMAC), a composite measure of joint function and pain—failing to demonstrate statistical significance compared to the placebo.

Specifically, the change in VAS was -38.7 in the TG-C group compared with -39.2 for the placebo group, meaning the placebo group showed a 0.5-point greater improvement. For the WOMAC total score, the TG-C group recorded -27.61 compared to the placebo group’s -26.54, representing a 1.07-point greater improvement for TG-C—but the p-value was 0.5701, falling short of demonstrating a clear advantage.

Jeon Seung-ho, co-CEO of Kolon TissueGene, said the TG-C arm itself performed on par with or better than in previous trials. “We were unable to demonstrate a difference compared to the placebo group, and we plan to conduct a detailed and comprehensive analysis—down to the raw data—to determine why this result occurred,” he said.

Kolon TissueGene noted that heavier use of painkillers in the placebo group, high baseline pain scores, and variability across trial sites and evaluators may have amplified the placebo response. The company stated it would begin investigating the causes within days.

The company also highlighted a second U.S. Phase 3 trial, with results expected in October. The second study uses the same protocol and design as the first but involves different sites, principal investigators, and patient groups. Because it is a separate, independent trial, Kolon TissueGene stated that it could not predict the outcome. If the second study confirms statistical significance, the company plans to consult with the U.S. Food and Drug Administration (FDA).

The trial’s failure also dragged down the stock prices of Kolon Corp. and Kolon Life Science. Kolon Corp. fell 28.27% from the previous session to 23,600 won, hitting a 52-week low. Kolon Life Science dropped to its daily lower limit of 21,100 won at the opening bell.

Kolon Corp. is the largest shareholder in Kolon TissueGene, holding a 39.26% stake, and has continued to inject capital into the company. Over the past five years, it has participated in five third-party private placements by Kolon TissueGene, contributing a total of 206.2 billion won (about $139 million).

Kolon Life Science holds the development and commercialization rights to TG-C in Asia. It had been pursuing development and business opportunities across major Asian markets, including Greater China, leaving it vulnerable to the trial’s failure.

NGeneBio Hits

Daily

Upper Limit on Stronger Business

Fundamentals NGeneBio surged to its daily upper limit early in the session and closed at 1,825 won. The gain was attributed to improved supply-and-demand dynamics following the resolution of uncertainty surrounding its rights offering, along with a firmer business footing.

NGeneBio finalized the rights offering on July 17, and its ex-rights date took effect on Tuesday. This removed the burden of subscription participation for new investors and drew in demand that had previously been on the sidelines.

A series of recent business wins and a stable revenue base also boosted investor sentiment. On July 13, NGeneBio signed a long-term supply agreement with Soonchunhyang University Bucheon Hospital for a comprehensive next-generation sequencing (NGS) solution, and on Tuesday, it began supplying its blood cancer precision diagnostic panel, HEMEaccuTest, to Seoul National University Bundang Hospital—expanding its clinical presence across major tertiary hospitals in South Korea.

NGeneBio’s blood cancer panel business has grown at an average annual rate of 36% over the past five years. In the first quarter, it rose 38% domestically and 102% overseas year-over-year, with overseas sales accelerating and the blood cancer panel emerging as one of the company’s core growth drivers.

In mid-July, the company also signed a strategic channel partnership with Illumina, a global leader in DNA sequencing and array-based technologies, to distribute Illumina’s NGS products and array-based technology. The deal expands NGeneBio beyond its core diagnostics and software business into the supply of testing equipment, completing a full-stack NGS business model that spans testing instruments, diagnostic panels, and AI-based analysis software.

"The Illumina agreement also opens the door to future OEM and ODM cooperation," an NGeneBio official said. "The stock appears to have risen on the back of recent business results and expectations for earnings growth."