[Edaily Reporter KIM SUNG-JIN ] Regarding allegations that Kim Seung-won, the nominee for Minister of Justice, solicited approval for clinical trials of Genencell’s COVID-19 treatment, an explanation has emerged stating that it was “a public-interest request intended to prevent the outflow of national wealth and reduce the burden on citizens.” However, industry sources explain that Celltrion’s domestically developed COVID-19 treatment, “Regkirona,” was already being supplied to medical facilities at the time, and that the likelihood of domestic clinical trial delays leading to technology leakage is low. Consequently, doubts are being raised about the nominee’s stated rationale of “preventing the outflow of national wealth and reducing the burden on the public.”

Celltrion’s Regkirona Already Approved… Daewoong, CHONGKUNDANG, and SHINPOONG INC. Also in Final Stages of Clinical Trials

According to a recording released by independent lawmaker Han Dong-hoon on the 6th, during a phone call with broker Yang Mo on October 12, 2021, Nominee Kim said, “Oh, then I’ll tell them to look into it directly. ‘Which department is it? I know the head of the Ministry of Food and Drug Safety, so I’ll ask him to look into it.’” During a second call, when Mr. Yang said, “The people in charge are passing the buck; they say it won’t get approved at the section chief level,” Nominee Kim replied, “It’s stuck at the section chief level? Got it.”

That day was when Nominee Kim asked Kim Gang-rip, then Commissioner of the Ministry of Food and Drug Safety, to expedite the clinical approval of Genencell Co., Ltd.’s COVID-19 treatment. Regarding this, Nominee Kim offered the explanation, “I conveyed the matter because I judged that the public interest was at stake in this grievance complaint.”

The Democratic Party of Korea also countered the controversy over this solicitation, stating, “The materials Candidate Kim received at the time indicated that GenenCell’s treatment was undergoing clinical trials overseas,” and added, “They contained information suggesting that if domestic clinical trials were delayed, the technology and patents could be transferred overseas; therefore, the intention was to supply a domestically produced treatment at a low cost to reduce the burden on the public.”

ENCell Co., Ltd. submitted its Investigational New Drug (IND) application for Phase 2/3 domestic clinical trials of ES16001, a COVID-19 treatment candidate, to the Ministry of Food and Drug Safety (MFDS) on September 23. On October 6, Professor Kang Se-chan of Kyung Hee University, the founder of ENCell Co., Ltd., sent a message to Mr. Yang Mo expressing concern that clinical trial approval might be delayed. Subsequently, Ms. Yang Mo had a phone conversation with Candidate Kim urging expedited approval, and the Ministry of Food and Drug Safety approved GenenCell’s Phase 2/3 domestic clinical trial for ES16001 on October 26.

However, the prevailing view in the industry is that, looking back at the status of COVID-19 treatment development in Korea at the time, “the urgent phase had already passed.”

In fact, in Korea, Celltrion(068270)had already received approval from the Ministry of Food and Drug Safety in February 2021 for “Lekirona” (active ingredient: regdanvimab, CT-P59)—the country’s first COVID-19 treatment—on the condition that Phase 3 clinical trial results be submitted, and had been supplying the drug to medical institutions; it successfully obtained full marketing authorization on September 17 of the same year. In other words, a domestically developed COVID-19 treatment had already received formal marketing authorization and was being distributed in Korea even before ENCell Co., Ltd. had applied for a Phase 2/3 Investigational New Drug (IND) application.

Furthermore, major domestic pharmaceutical companies such as DAEWOONGPHARMACEUTICAL and CHONGKUNDANG were also in the late stages of clinical trials. DAEWOONGPHARMACEUTICAL received approval from the Ministry of Food and Drug Safety in January 2021 for a Phase 3 clinical trial of “DWJ1248” (product name: Hoysta Tablets), and CHONGKUNDANG also received approval in April 2021 for a Phase 3 clinical trial plan for “CKD-314” (product name: Napavelatan Injection) to develop a COVID-19 treatment. KD Corporation developed CKD-314, which was previously used to treat pancreatitis and disseminated intravascular coagulation (DIC), and the company was accelerating trials to expand its therapeutic indications to include COVID-19.

ShinpoongPharmaceutical, which garnered significant attention as a treatment developer during the COVID-19 pandemic, had also received approval for a Phase 3 clinical trial of “Paramax” (active ingredients: pironaridine phosphate and artesunate) in late August and was accelerating its development.

In contrast, GenenCell Co., Ltd. was considered a latecomer in the development of COVID-19 treatments, and the efficacy of its Phase 2 clinical trial conducted earlier in India had been called into question. ENCell Co., Ltd. submitted an Investigational New Drug (IND) application for the domestic Phase 2/3 clinical trial of ES16001 on September 23, 2021, but the Ministry of Food and Drug Safety (MFDS) requested that 14 items be supplemented regarding the results of the Indian Phase 2 clinical trial, which had been presented as supporting evidence.

While it is true that both the government and the industry were making concerted efforts to develop COVID-19 treatments at the time, this is why some observers argue that the situation was not at a point where the course of events would have been significantly altered by whether or not GenenCell, as a latecomer, succeeded in developing its treatment.

An industry official stated, “At the time, many people were dying due to the COVID-19 pandemic,” adding, “Companies developing treatments even planned to supply them at virtually cost price for the sake of public safety.” In fact, it is reported that after developing Regkirona, Celltrion exported the product to major developed countries at market price but supplied it domestically at cost. This suggests that even if GenenCell had succeeded in developing a COVID-19 treatment, it would have been difficult for it to play a significant role in reducing the burden on the public.

“Clinical Delays Lead to Technology Leakage”… Industry Calls It “Nonsense”

The industry is largely skeptical of concerns that the patents and technology for the COVID-19 treatment held by Genencell Co., Ltd. could leak overseas. They argue that it is unlikely for technology or patents to be transferred abroad simply because clinical trials are delayed domestically.

An industry official pointed out, “It doesn’t make sense to say that technology will leak just because domestic clinical trials are delayed,” adding, “On the contrary, domestic clinical trial results are the basis for exporting the technology overseas.”

In fact, in May 2022, ENCell Co., Ltd. successfully concluded a technology export deal for “ES16001” with the United Arab Emirates (UAE)-based company OrdiPharma. At that time, Professor Kang personally visited DEM Pharma, OrdiPharma’s parent company based in Istanbul, Turkey, to sign an agreement transferring the rights to “ES16001.” This is an example of technology export, not the technology leakage that had been feared.

However, Genencell’s development of a COVID-19 treatment ultimately failed. Although the first clinical trial patient was enrolled in May 2022, the trial was abruptly halted in May 2023 because the minimum patient enrollment requirement was not met.

Another industry insider stated, “Considering the context, if Genencell were to conduct clinical trials overseas rather than domestically, an overseas contract research organization (CRO) could potentially obtain the data,” but added, “Since patents can be filed anywhere, this is unlikely to pose a major problem.”