Korea's cell and gene therapies (CGTs) are running into one wall after another, failing to clear hurdles to approval and commercialization despite recognized technology. Stem cell and gene therapies, once spotlighted as the core of next-generation regenerative medicine, are facing heavier burdens for developers as regulatory uncertainty converges with the market's cold-eyed assessments.
As of the 21st, the industry says domestic CGTs face obstacles at every stage, from clinical trials to product approval and commercialization. Clinical results have fallen short of expectations, legal disputes over approvals continue, and even after hard-won approvals, cases of struggling to gain a foothold in the market are piling up.
Industry attention was focused on Kolon TissueGene(950160)'s TG-C, a cell and gene therapy for osteoarthritis, and its U.S. phase 3 results. The company said the day before that TG-C failed to meet one of the co-primary endpoints in the U.S. phase 3 trial.
According to the company, TG-C did not achieve statistical significance over placebo for either pain (VAS) or joint function (WOMAC), the primary endpoints. However, long-term follow-up safety assessments identified no new safety concern signals.
The company plans to announce topline results from a second phase 3 in October. Conducted at different sites with different evaluators and patient populations than the first trial, the independent study is drawing industry attention as a pivotal readout that will determine the development path forward.
Kolon TissueGene Chief Executive No Mun-jong said, "In the first study, a larger-than-expected placebo response appears to have significantly affected the interpretation of the results," and added, "We are conducting multifaceted, in-depth analyses of several variables, including the possibility of site-by-site response differences identified in additional analyses."
Ahead of the announcement, the share price plunged nearly 20% in a single day on the 16th, prompting speculation in the market that some results may have leaked early. Just a month earlier, buoyed by hopes for clinical success, the stock had risen more than 40% in five months from the 70,000-won range at the start of the year.
TG-C is a cell and gene therapy administered as a single intra-articular injection for patients with knee osteoarthritis. The U.S. Food and Drug Administration (FDA) has not approved any disease-modifying osteoarthritis drugs (DMOADs). Patients are currently treated mainly for symptom relief with painkillers, steroid injections, and joint replacement surgery, and global drugmakers including Pfizer and Eli Lilly and Company have also failed to develop DMOADs.
TG-C's development process has not been smooth. In Korea, the product received marketing authorization from the Ministery of Food and Drug Safety in 2017 under the name "Invossa," but the approval was revoked after it was confirmed that kidney-derived cells had been used instead of cartilage-derived cells as stated in the submission.
By contrast, the FDA determined the issue was not directly related to safety and allowed the trial to resume. Kolon TissueGene plans to discuss the development path with the FDA based on the second phase 3 results and additional analyses.
In Korea, uncertainty over approval also continues for Nature Cell(007390)'s stem cell therapy "JointStem."
After the Ministery of Food and Drug Safety twice rejected the marketing application, saying clinical efficacy had not been sufficiently demonstrated, an affiliate of Nature Cell filed an administrative lawsuit, and the court overturned the regulator's rejection.
The court said it was an administratively convenient judgment to review only the additional supplemental materials when it should have comprehensively reviewed the original submission and the two rounds of supplements. However, with the possibility that the Ministery of Food and Drug Safety will appeal, the final approval remains uncertain.
The mood appears different in the United States. JointStem has received Regenerative Medicine Advanced Therapy (RMAT) designation from the FDA, and there is a possibility that it could apply for approval without additional local trials in the U.S., based on Korea's phase 3 data.
But commercialization is an even tougher hurdle than approval. "Cartistem" from MEDIPOST(078160), Korea's first stem cell therapy and a representative CGT, received domestic approval in 2012 and has been sold for more than a decade. Still, annual product sales have stagnated around 20 billion won.
Last year, sales from stem cell therapies and contract development and manufacturing (CDMO) came to 19.5 billion won, down 3.6% from a year earlier. Meanwhile, with higher U.S. and Japan clinical costs, operating losses widened by 19.5 billion won to 68 billion won.
MEDIPOST is seeking a breakthrough overseas. Based on its Japan phase 3 results, the company plans to file for approval with the Pharmaceuticals and Medical Devices Agency (PMDA) in the second half of this year. If approved, it plans to begin sales through local partner Teikoku Pharma from the end of next year.
The push into the United States is also accelerating. The company recently completed enrollment and dosing of the first patient in the U.S. phase 3 and is conducting a registrational trial with 300 patients at more than 70 sites in the U.S. and Canada.
Notably, the FDA agreed to proceed with a single pivotal trial for Cartistem rather than the two typically required. Based on real-world evidence (RWE) from long-term treated patients in Korea and the Japan phase 3 results, the trial size was reduced from 600 to 300 patients, and the duration can be shortened by three to six months. The company expects development costs to be reduced by 20% to 30% as a result.
The government is also moving faster to improve regulations and promote advanced regenerative medicine. Advanced regenerative medicine uses human cells and genes to regenerate and restore damaged tissues and functions or treat disease. While conventional drugs focus on symptom relief, advanced regenerative medicine aims for fundamental cures by restoring damaged tissues and cells.
Still, the industry says institutional tweaks alone have limits in jump-starting the sector. The market's yardsticks have also changed. In the past, merely succeeding in clinical trials lifted corporate value; now, the ability to commercialize—covering approval, manufacturing, reimbursement listing, and overseas expansion—determines valuation. MEDIPOST's share price fell even after success in Japan's phase 3, and Kolon TissueGene's stock also swung sharply ahead of its clinical readout.
An industry official said, "Korea's CGT industry has moved beyond an era when clinical success alone earned recognition and has entered a stage where commercialization capabilities—including approval, manufacturing, reimbursement listing, and overseas expansion—determine competitiveness," and added, "Along with regulatory improvements, the industry can grow only if we build a commercialization ecosystem and investment environment that can deliver real results in the global market."