[Edaily Reporter KIM SUNG-JIN ] Kolon TissueGene, Inc.(950160)has decided to replace key personnel responsible for its U.S. clinical and regulatory affairs, drawing attention to the reasons behind this move. This personnel change is particularly noteworthy because it occurred immediately after the results of the Phase 1 and Phase 3 U.S. clinical trials for Kolon TissueGene, Inc.’s osteoarthritis cell-gene therapy candidate “TG-C” (formerly Invosar) were released.

Kolon TissueGene, Inc. plans to announce topline results from the second Phase 3 trial as early as the end of this year. The company has stated that even if the results of the second Phase 3 trial are negative, it will not abandon the TG-C pipeline and will continue research and development. Consequently, there is speculation that internal organizational structure or future U.S. Food and Drug Administration (FDA) approval strategies may have changed in light of the clinical results.

Vice President Diana Halim, Who Joined in 2020, Resigns

According to the international clinical trial registry site ClinicalTrials.gov on the 2nd, Kolon TissueGene, Inc. is currently in the process of replacing Vice President Diana M. Halim, who was previously in charge of clinical and regulatory affairs in the U.S. According to recently disclosed information, Vice President Diana M. Halim’s name and contact information—which had been listed as the person in charge of clinical affairs at Kolon TissueGene, Inc.—have been removed, and new company phone numbers and email addresses have been registered.

A Kolon TissueGene, Inc. spokesperson explained, “The disclosure was updated as part of the process to replace the person in charge of these operations.”

Ms. Halim’s official title is Vice President of Clinical and Regulatory Affairs. She initially served as Senior Director of Regulatory Affairs upon joining the company but was soon promoted to Vice President, a position she has held since. She earned a Bachelor of Science in Biology from George Washington University and completed a Master’s degree in Biotechnology at Johns Hopkins University. He subsequently worked in regulatory affairs at the Japanese pharmaceutical and biotech company Anges MG, and joined Kolon TissueGene, Inc. after stints at the U.S. pharmaceutical company Sucampo Pharmaceuticals and RRD Biopharma International, a biopharmaceutical development consulting and services provider. He joined the company in early 2020 and worked there for approximately 6 years and 9 months.

Executive Vice President Halim is regarded as a key figure who led clinical and regulatory affairs, as evidenced by his personal profile being featured in the “Management Team” section of Kolon TissueGene, Inc.’s website. The page also features Kolon TissueGene, Inc. CEO Noh Moon-jong, CEO Jeon Seung-ho, Korea Branch Manager Kwon Soon-ok, Chief Financial Officer (CFO) Kim Jeong-in, Chief Operating Officer (COO) Park Geon-young, and Chief Commercial Officer (CCO) Eo Dong-kyu. However, Vice President Halim’s profile has since been removed as part of the standard resignation process.

When asked whether the replacement of Vice President Halim was related to the recent clinical trial failure, a spokesperson for Kolon TissueGene, Inc. stated, “We are currently analyzing the causes of the clinical trial failure,” adding, “We do not believe [the failure] is linked to any specific individual.”

TG-C Development Continues… Possibility of Additional Clinical Trials

A notable aspect of Vice President Halim’s departure is its timing. This personnel change took place following the announcement of the topline results from Kolon TissueGene, Inc.’s TG-C Phase 1/3 clinical trial in the U.S. The decision to replace the clinical and regulatory leaders was made after the trial failed to achieve statistical significance.

On July 20, Kolon TissueGene, Inc. announced that its U.S. Phase 3 clinical trial for TG-C failed to demonstrate statistical significance compared to the placebo for both the Visual Analog Scale (VAS) pain score and the World Health Organization's Osteoarthritis Concept (WOMAC) total score, which were the co-primary endpoints.

Consequently, there is speculation that Kolon TissueGene, Inc.’s U.S. approval strategy may undergo changes. Kolon TissueGene, Inc. is preparing to announce topline results from the second Phase 3 trial this coming December. This trial was completed at the same time as the first Phase 3 trial in 2024, and the company has now commissioned an external contract research organization (CRO) to analyze the data. Previously, for the first Phase 3 trial, the company conducted the clinical data analysis in-house, which drew criticism from some quarters regarding concerns over a lack of objectivity.

Industry observers are cautiously speculating that even if Kolon TissueGene, Inc. achieves positive results in the Phase 3, Part 2 topline announcement scheduled for the end of this year, the company may still need to conduct additional clinical trials. The analysis suggests that since the first Phase 3 trial was effectively a failure, it may be difficult for the second Phase 3 trial to lead to FDA approval even if it is successful.

An industry official stated, “Because the results of the first Phase 3 trial were poor, the FDA may recommend additional clinical trials even if the second trial is successful,” adding, “The personnel changes in the clinical and regulatory departments can also be seen as part of this future strategy.”

Kolon TissueGene, Inc. has made it clear that it will not abandon the TG-C pipeline even if the second Phase 3 trial fails. TG-C is a long-term project that Kolon TissueGene began developing as far back as 1999—a full 27 years ago—and it is currently the company’s sole new drug pipeline.

In fact, Kolon TissueGene, Inc. is preparing clinical trials for TG-C not only as a treatment for osteoarthritis but also as a treatment for spinal disc disorders. The company already received approval from the FDA in December 2023 to expand the indication to include spinal disc disorders, and patient enrollment is scheduled to begin in January 2027. The clinical trial is designed with four groups—low-dose, medium-dose, high-dose, and a sham control group—involving a total of 24 patients, with the entire trial scheduled for completion in July 2029.

More Than Half of U.S. Headquarters Staff Cut… Analysts See It as a Cost-Cutting Measure

Some analysts view this as part of an ongoing effort to cut costs through workforce reductions. Kolon TissueGene, Inc. has decided to lay off 37 employees at its headquarters in Rockville, Maryland. Given that the U.S. headquarters currently employs about 60 people, this represents a mass layoff affecting more than half of the workforce.

There is also speculation that, since the clinical trials have already been completed, there is no need to maintain a large workforce for the time being. The argument is that labor costs for local U.S. employees are significant, and since the hiring environment in the U.S. differs from that in Korea, the company can respond more flexibly.

Another industry insider stated, “Most personnel in the biotech industry are highly skilled, so they generally represent a significant cost burden,” adding, “With clinical trials now fully completed, there was likely no need to maintain a full workforce.”