Kolon crashes on TG-C failure; NGeneBio soars [K-bio pulse]

[Kim Jin Su, Edaily Repoeter] Shares of three Kolon Group affiliates tumbled 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 off its intraday floor.

NGeneBio, by contrast, surged to its daily upper limit as uncertainty over a planned rights offering cleared and the company shored up a steadier business base.

Kolon TissueGene, Kolon stock trend. (KG Zeroin)

◇TG-C fails to show efficacy; Kolon Group sells off

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 reach statistical significance in a Phase 3 trial conducted in the United States.

After the market closed 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 show statistical significance versus placebo.

Specifically, the change in VAS was -38.7 in the TG-C group compared with -39.2 for placebo, meaning the placebo group improved by 0.5 point more. On the WOMAC total score, the TG-C group posted -27.61 against placebo's -26.54, a 1.07-point greater improvement for TG-C — but the p-value came in at 0.5701, 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 could not prove a difference against the placebo group, and we plan to analyze in detail and comprehensively — down to the raw data — why this result emerged," he said.

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

The company also pointed to a second U.S. Phase 3 trial, with results due 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 said 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 failure dragged down shares of Kolon Corp. and Kolon Life Science as well. Kolon Corp. fell 28.27% from the previous session to 23,600 won, touching a 52-week low. Kolon Life Science dropped to its daily lower limit of 21,100 won at the open.

Kolon Corp. is the largest shareholder in Kolon TissueGene, with a 39.26% stake, and has continued to inject capital into the company. Over the past five years, it has taken part in five third-party allotment capital increases 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 exposed to the trial's failure.



◇NGeneBio hits upper limit on steadier business

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 around its rights offering, along with a firmer business footing.

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

A run of recent business wins and a stable revenue base also lifted investor sentiment. On July 13, NGeneBio signed a long-term supply agreement with Soonchunhyang University Bucheon Hospital for a total next-generation sequencing (NGS) solution, and on Tuesday it began supplying its blood-cancer precision diagnostic panel, HEMEaccuTest, to Seoul National University Bundang Hospital — extending its clinical footprint 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 diagnostics-and-software core into test-equipment supply, completing a full-stack NGS business model spanning testing instruments, diagnostic panels and AI-based analysis software.

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