[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.”

This is the assessment of a veteran in the biotech industry. In fact, Bio Solution Co.,Ltd.(086820)submitted an Investigational New Drug (IND) application for its autologous chondrocyte therapy “Cartiroid” 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 of Food and Drug Safety or reapplying for a domestic IND, Bio Solution Co.,Ltd. shifted its focus to 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 effectively took about six months from 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 Controls (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 (MFDS), 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 an isolated incident involving a specific politician and a company. An executive in the biotech sector, who formerly worked at the Ministry of Food and Drug Safety, noted, “It is not uncommon to mobilize external connections to check on 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 insider well-versed in parliamentary liaison affairs stated, “Lawmakers’ offices constantly receive various grievances from companies, associations, and their constituencies, 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 delivery and inappropriate intervention aimed at influencing the licensing or approval of a specific company. It has been pointed out that in matters like IND applications—which require patient safety and scientific judgment—it is necessary to distinguish between simple inquiries about the progress of a case, requests for expedited processing, and demands intended to influence the review outcome.

The MFDS says “30 days”… but biotech companies say, “It’s easily been over a year of repeated requests for supplementary 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 the time it takes for an IND to be actually approved and the scope of supplementary data required as key problems.

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 distinguished from the MFDS’s “pure review period.” If the company resubmits the data and the MFDS completes the 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 supplementary data and the lack of transparency in review criteria are cited as the key causes of bottlenecks in the domestic clinical trial approval process. The CEO of a contract research organization (CRO) argued, “Although 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 supplementary data,” adding, “Compared to the U.S., the review speed is about four times slower.”

He criticized the situation, stating, “Even clinical trials already underway overseas sometimes result in requests for additional data or rejections in Korea, leading domestic companies to increasingly begin their clinical trials overseas from the start,” and added, “It is virtually impossible to conduct the 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 clinical trials is directly linked to corporate valuation and fundraising.

Once a drug candidate passes the IND approval process, it begins to be evaluated as a development asset eligible for human administration, increasing the likelihood of securing follow-up investment and technology transfer. For publicly traded companies, whether or not an IND is approved can directly impact 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 seen 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 their candidate compounds could actually proceed through IND approval and clinical trials to obtain marketing authorization.

From a biotech startup’s perspective, repeated requests for supplemental 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 schedules for follow-up investments and partnerships. Biotech startups with limited experience in new drug development and a shortage of regulatory experts are particularly likely to view unexpected requests for supplemental data as a greater risk.

It has been pointed out that this structure can act as an incentive driving some companies to seek help outside official procedures. 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 petitions to the National Assembly to find out how far the review has progressed, why it is delayed, and whether it can be processed even slightly faster.

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

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 MFDS 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 industry insider with a background at the MFDS remarked, “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 continued, “To successfully navigate the process from an IND application to marketing authorization, one must anticipate potential issues during the review process and proactively generate the necessary data; however, there aren’t many people in Korea who can foresee the entire development process.”