Shares of Kolon Group’s bio affiliates plummeted after South Korea’s drug authorities canceled the license for gene therapy drug Invossa on May 28.
According to the Ministry of Food and Drug Safety, the decision was made as the drug maker intentionally mislabeling an ingredient used in its new osteoarthritis treatment. The Korean company has acknowledged that a substance has been mislabeled since 2003.
Immediately after the news broke out, shares of the company’s US unit Kolon TissueGene, which first noticed that the component was labeled incorrectly, plunged 16.04 percent to 8,010 won ($6.70). Kolon Life Science’s stock price also tumbled 9.37 percent.
Korean financial authorities had suspended trading of both stocks, saying it has to protect its investors.
Stock market operator KRX lifted the suspension of Kolon Life Science shares on May 29, but continued the suspension on Kolon TissueGene, saying it is at risk of being delisted and has to be evaluated.
Kolon Life Science shares, which resumed trading on May 29, dropped 22.75 percent further to 19,700 won as of 11 a.m.
The group spent more than 19 years to develop Invossa, an intra-articular injection that is a nonsurgical treatment option for treating knee osteoarthritis. The recent problem occurred as one component which was labeled as “a gene containing chondrocyte” since 2004, was actually found out to include a kidney cell and should have been labeled accordingly.
By Song Seung-hyun (firstname.lastname@example.org)