Kolon TissueGene's stock plummeted from an intraday high of 149,000 won on May 12 to 15,000 won, a decline exceeding 90%, following the company's disclosure on May 20 that its TG-C cell and gene therapy for knee osteoarthritis failed to meet statistical significance in the first analysis of its US Phase 3 clinical trial. The stock hit the daily limit-down for three consecutive trading days and fell an additional 28.74% on May 24. The severity of the decline reflects Kolon TissueGene's reliance on a single drug candidate, unlike diversified biotech peers with multiple pipeline assets.
Kolon TissueGene TG-C US Phase 3 Trial Fails, Triggers Three-Day Limit-Down
The collapse began with the May 20 public disclosure that TG-C (formerly Invossa-K Inj.) did not achieve statistical significance in the first analysis of its US Phase 3 trial for knee osteoarthritis treatment. Following the announcement, the stock entered limit-down for three consecutive sessions. On May 24, the stock closed at 15,000 won after a 28.74% drop, representing an 85% decline from the 101,100 won closing price on the previous month's May 24. During the limit-down period, sell orders accumulated without execution, preventing shareholders from exiting positions.
CEO Jeon Seung-ho held a press conference after the stock collapse, stating "I do not consider this a clinical failure but half a success. Please view this as a growing pain." The remarks did not halt further declines. The second Phase 3 trial (TGC-12301) results are scheduled for release in October. The company's original timeline for FDA Biologics License Application submission in Q1 2027 and commercialization in 2028 now faces delays.
Korea Investment & Securities Downgrades Rating to Neutral Without Target Price
Brokerage sentiment reversed within two months. Korea Investment & Securities raised Kolon TissueGene's target price from 170,000 won to 280,000 won on May 7, valuing TG-C at approximately 20 trillion won. Following the trial results, the firm downgraded its investment rating from 'Buy' to 'Neutral' without issuing a new target price.
Analyst Wi Hae-joo of Korea Investment & Securities stated, "If the second Phase 3 trial succeeds, FDA BLA submission may become possible," but added, "In that case, the robustness of clinical results would inevitably be lower than previous estimates, and market share projections would need downward revision."
FAQ
What caused Kolon TissueGene stocks to collapse in May?
Kolon TissueGene disclosed on May 20 that its TG-C cell and gene therapy failed to meet statistical significance in the first analysis of its US Phase 3 clinical trial for knee osteoarthritis. The stock fell from 149,000 won on May 12 to 15,000 won, a decline exceeding 90%.
How did Korea Investment & Securities change its rating on Kolon TissueGene?
Korea Investment & Securities downgraded Kolon TissueGene from 'Buy' to 'Neutral' without providing a new target price, after previously setting a 280,000 won target on May 7. Analyst Wi Hae-joo noted that even if the second Phase 3 trial succeeds, clinical result robustness and market share estimates would require downward revision.
