[E-Daily Reporter KIM SAE-MI ] “In the case of innovative new drugs that have never been administered to humans, it is realistically difficult to conduct early-stage clinical trials in Korea. As a result, a significant number of domestic biotech companies are abandoning domestic clinical trials and moving overseas. If this situation persists, I believe it will be a long time before Korea can emerge as a powerhouse in new drug development.”

Bio Solution Co.,Ltd.(086820)This is the observation of a veteran in the biotech industry. In fact, BioSolution submitted an Investigational New Drug (IND) application for “Cartiroid,” an autologous cartilage cell therapy, to the Ministry of Food and Drug Safety (MFDS) in February of last year, but after being asked to provide additional data on preclinical and toxicity studies, the application was ultimately rejected in June of the same year. Rather than filing an appeal with the Ministry or resubmitting an IND application in Korea, Bio Solution Co.,Ltd. shifted its focus toward conducting clinical trials overseas, such as in Australia.

There are also cases where IND approval was granted but took a considerable amount of time. In June 2021, AbClon Inc.(174900)applied for a domestic Phase 1/2 IND for its CAR-T therapy “AT101,” but final approval was not granted until December of the same year. Although the Ministry of Food and Drug Safety’s statutory processing period is 30 days, it took approximately six months from the initial application to approval. In this case, the actual start of the clinical trial was delayed beyond initial expectations because the review process required supplementary procedures regarding Good Manufacturing Practice (GMP) and Chemistry, Manufacturing, and Control (CMC) documentation.

K-Bio Stumbles at the IND Hurdle… ‘30-Day Review’ Sometimes Takes 6 Months

The issue of “lobbying” for regulatory approvals in the pharmaceutical and biotech industries came to light after it was revealed that Kim Seung-won, the nominee for Minister of Justice, had contacted Kim Kang-rip, then Commissioner of the Ministry of Food and Drug Safety, in 2021 to request expedited processing of ENCell Co., Ltd.’s Investigational New Drug (IND) application for a COVID-19 treatment. On October 26, 2021—about two weeks after Nominee Kim made contact—Genencell’s IND for its domestic Phase 2/3 clinical trial was approved.

Some in the biotech industry have questioned whether this controversy can be viewed solely as the misconduct of a specific politician and a company. An executive in the biotech industry who formerly worked at the Ministry of Food and Drug Safety (MFDS) remarked, “It is not uncommon to mobilize external connections to inquire about the status of MFDS approvals or to request expedited processing.” Another industry insider admitted, “Although it hasn’t been made public, I understand that similar requests were made at the company where I previously worked.”

There are also suggestions that conveying grievances through the National Assembly is not an uncommon practice. An industry official well-versed in National Assembly liaison work said, “Lawmakers’ offices receive various grievances from companies, associations, and constituencies on a regular basis, and it is not uncommon for lawmakers to personally convey some of these to the ministers of relevant ministries or the heads of relevant agencies.”

The issue lies in drawing the line between routine petition submission and inappropriate intervention aimed at influencing the licensing or approval of a specific company. Critics point out that in cases like IND applications—which require patient safety and scientific judgment—it is necessary to distinguish between simple inquiries about progress, requests for expedited processing, and demands intended to influence review outcomes.

The MFDS Says “30 Days”… But Biotech Companies Say, “It’s Easily Been Over a Year of Repeated Requests for Additional Data”

The most fundamental reason domestic biotech companies have no choice but to rely on external help—such as from political circles—rather than official procedures is uncertainty. The industry cites the difficulty in predicting both the time it takes for an IND to be actually approved and the scope of

the additional data required

.

A biotech industry official explained, “The MFDS calculates the actual review period by excluding the time companies spend preparing supplementary data,” adding, “While the MFDS considers the process completed within 30 days, from the companies’ perspective, it actually takes over a year when supplementary testing is included.”

For example, if the MFDS requests additional trial data on the 20th day after receipt and the company takes one year to prepare it, that period is distinct from the MFDS’s actual review period. If the company resubmits the data and the MFDS completes its review within the remaining time, a significant discrepancy arises between the review period recorded by the MFDS and the total duration experienced by the company.

Repeated requests for supplemental data and the lack of transparency in review criteria are cited as the key causes of bottlenecks in domestic clinical trial approvals. The CEO of a contract research organization (CRO) argued, “While the statutory processing period for an IND is 30 days, there are quite a few cases where the process actually takes between three months and over a year due to repeated requests for supplemental data,” adding, “Compared to the U.S., the review speed is about four times slower.”

He criticized the situation, saying, “Even clinical trials already underway overseas sometimes result in requests for additional data or rejections in Korea, leading domestic companies to increasingly begin clinical trials overseas from the start,” and added, “It is virtually impossible to conduct a First-in-Human (FIH) trial for innovative new drugs in Korea.”

IND Delays Shake Investment… The Temptation of ‘One Phone Call’ Plaguing Biotech Ventures

From the perspective of small startups or biotech ventures, IND approval is a critical event that can determine the very survival of a company. This is because entering the clinical trial phase is directly linked to corporate value and fundraising.

Once a drug candidate passes the IND process, it begins to be evaluated as a development asset eligible for human administration, thereby increasing the likelihood of securing follow-up investment and technology transfer. For publicly traded companies, whether or not IND approval is granted can have a direct impact on stock prices and corporate value.

Particularly during the COVID-19 pandemic, the mere fact that a company had entered the race to develop a treatment was viewed as a catalyst for increased corporate value. At the time, there were quite a few cases where companies raised massive amounts of investment capital without sufficiently verifying whether the candidate drug could actually proceed through the IND process and clinical trials to obtain marketing approval.

From the perspective of biotech startups, repeated requests for supplementary data during the IND review process or delays in approval can push back the entire clinical trial schedule. Not only does this increase the burden of cash burn, but it can also disrupt follow-up investment and partnering schedules. Biotech startups lacking experience in new drug development and regulatory expertise are particularly likely to view unexpected requests for supplementary data as a greater risk.

It has been pointed out that this structure can act as an incentive, driving some companies to seek assistance outside official channels. The more a company feels it is difficult to predict review criteria, the scope of requested revisions, and the timing of approval, the greater the temptation to rely on former officials, personal connections, or legislative petitions to find out how far the review has progressed, why it is being delayed, and whether it can be processed even slightly faster.

An official in the biotech industry stated, “Attempts to rush IND approval when review materials are incomplete or to influence the review through external pressure cannot be justified,” but added, “It seems that some people feel tempted to resort to unofficial contacts because they find the official communication process frustrating.”

In particular, he emphasized, “Although the MFDS’s organization and workforce have expanded, the industry has not fully felt the benefits in terms of review speed or communication,” adding, “Apart from strengthening corporate responsibility, the MFDS’s review system also needs improvement in terms of predictability and communication.”

However, some point out that it is problematic to blame the Ministry of Food and Drug Safety for all IND delays. Others note that the lack of experience in new drug development among domestic biotech companies is also a contributing factor.

An official in the biotech industry who formerly worked at the MFDS said, “Among biotech founders and CEOs, there aren’t many who not only understand the technology itself but also have actual experience developing new drugs.” He added, “To successfully navigate the process all the way to an IND or marketing authorization, one must think ahead about what might become an issue during the review process and prepare the necessary data accordingly; however, there aren’t many people in Korea who can foresee the entire development process.”