[Debriefing] Science of a scandal

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[Debriefing] Science of a scandal


Kolon Life Science CEO Lee Woo-suk bows to apologize during an emergency press conference held at the Korea Press Foundation in central Seoul on April 1, the day when the Invossa scandal erupted. The company suspended the distribution and sale of Invossa and patient recruitment for its Phase 3 clinical trials in the United States after finding a material in the drug not previously disclosed and approved by the Ministry of Food and Drug Safety. [YONHAP]

Kolon Life Science, as we know, is in trouble.

On April 1, it suspended the distribution and sale of Invossa, a gene therapy marketed as a treatment for arthritis of the knee. The reason is simple: The company did not previously disclose a material used in its manufacture.

Yet the story quickly gets complex from there, involving a certain amount of science that can test even a patient audience. So far, news reports have mentioned errant cell lines, GP2-293 and CSI-like science. There has been repeated mention of kidney cells in stories that should be about cartilage.

The details do matter. They might make the difference between Kolon Life Science being guilty of simple mislabeling or outright fraud, or worse. A certain line of reasoning suggests that Kolon Life Science not only lied, but that it never intended to do what it claimed to be able to do - that the mistake was intentional.

In the best case, the errors will be corrected and Invossa will be back on the shelves. In the worst case, Kolon Life Science will be damaged as a company, its executives implicated and the future of biotech in Korea brought into doubt.

But let’s not get ahead of ourselves. Here is a step-by-step guide to the Invossa scandal, the nitty-gritty and all.

Q. So, Kolon Life Science is facing some troubles because of Invossa. What are the basics?


Kolon Life Science announced on April 1 that material was used in the making of Invossa that had not been disclosed to the Ministry of Food and Drug Safety. The injectable therapy was taken off the market, and clinical trials in the United States were suspended.

As with many scandals, the cover up may be worse than the original crime. Kolon Life Science claimed that it learned of the error in February, but recent reports suggest that Kolon TissueGene, a subsidiary, may have received a test result revealing the problem in March 2017.

Q. Sparing us a full genetics course, what’s the science behind the scandal?

Invossa is supposed to temporarily rebuild knee joints.

Cartilage cells were to be genetically edited to stimulate growth, and these “transforming growth cells” were to be mixed with normal cartilage cells.

This is what Invossa should have been.

But it turns out that the transforming growth cells were not actually derived from cartilage. They originated from GP2-293 cells, which are kidney cells.

The company said it doesn’t know how the kidney cells got into the manufacturing process.

Q. What? How is that possible? How did they not know what was in the drug?

Invossa is cultured, and the main components were introduced at the beginning of the process. It’s not exactly but somewhat like the bacteria in yoghurt or a yeast strain used in bread.

The company was not sourcing new kidney cells and adding them as they made a new batch, rather it was more or less growing what it already had.

Questions certainly remain as to how the kidney cells were used in the first place or how the company didn’t take a closer look along the way, but it is not as if the errant cells were being repeatedly introduced.

Q. How bad is the presence of the errant cells? What does that mean from the medical point of view?

Some experts argue that GP2-293 cells could cause tumors to develop.

GP2-293 cells come from HEK-293 human embryonic kidney cells, which can grow and multiply as quickly as cancer cells. Normal cells would die after a certain period.

HEK-293 cells are especially dangerous because it is not easy to predict what kind of mutations they can cause within the body when injected.

What that suggests is that patients injected with Invossa could - in theory - end up developing tumors.

Q. How did Kolon Life Science discover the errant strain? What’s the timeline?

Kolon Life Science CEO Lee Woo-suk explained that “technical limitations” in the early 2000s prevented researchers from properly identifying the basis cells for Invossa.

He insisted it wasn’t until February this year that Kolon Life Science learned Invossa was made using cell lines not approved by the Ministry of Food and Drug Safety. It was only after Kolon TissueGene, which developed Invossa, conducted a Short Tandem Repeat (STR) analysis that GP2-293 cells were discovered.

STR analysis, developed decades ago, has traditionally been a tool for criminal investigations. It has been utilized in pharmaceutical development since about 2010.

Mitsubishi Tanabe Pharma, a Japanese company, disputes Kolon Life Science’s timeline. It claims that Kolon TissueGene knew since March 2017 that an errant cell line was used in making Invossa - almost two years before the parent company announced the existence of the kidney cells.

Mitsubishi Tanabe Pharma argues that Kolon TissueGene received an STR analysis on Invossa from Lonza, a Swiss contract manufacturing firm, in March 2017. The analysis allegedly shows the presence of the kidney cell line.

Kolon Life Science acknowledges that its affiliate did receive the report in 2017, but insists that it did not notice that GP2-293 cells were discovered. It said Kolon TissueGene only mentioned the fact that no non-human cells were found in the results.

“The employee must have focused on the fact that there was no problem in producing the drug, not on the fact that an errant cell line was discovered,” a Kolon Life Science executive said on May 6.

Lonza conducted the STR analysis to verify that only human cells were used, the company adds.

Yet the news of an earlier test raises the possibility that the company has been lying to the government, patients and investors all along, with many wondering why Kolon Life Science did not conduct an STR analysis on Invossa on its own.

Q. What are the implications for the company?

It is safe to say that trust has been damaged and investor sentiment has hit rock bottom.

Due to the scandal, Kolon TissueGene’s share price has dropped about 78 percent from its peak of 42,850 won [$36] on March 5. The share price of Kolon Life Science is down more than two-thirds from its March 14 peak.

Kolon Life Science is facing a potential class-action lawsuit lodged by patients injected with Invossa. OhKims Law & Company announced last month that it is organizing patients who were treated with Invossa for the class-action lawsuit.

According to the firm, Kolon Life violated the Pharmaceutical Affairs Act as it manufactured and sold pharmaceuticals that do not match the licensed version of the drug. The lawsuit will seek monetary compensation for the cost of the gene therapy drug and psychological harm.

As of May 8, the law firm had gathered 110 patients for the lawsuit and said it will be officially filing the complaint this month.

Shareholders of Kolon TissueGene are also preparing to seek damages. They are filing against Kolon Life Science, Kolon TissueGene and company executives. Legal sources said the shareholders lost on average 20 million won because of the scandal.

The company believed Invossa could help it gain a competitive edge in the osteoarthritis treatment market and possibly be used to treat other musculoskeletal disorders. Kolon TissueGene’s fate is heavily dependent on the drug, as Invossa is the only product released by the company.

Q. What’s Kolon Life Science’s defense?

The company argues that the kidney cells in question were introduced at the very beginning of development, so all the clinical data has been obtained using an Invossa that includes those cells. In other words, the drug is not what they said it was, exactly, but that what they have now should be judged on the track record, which seems to be good.

They have assured regulators that the errant strain was not introduced along the way. That will have to be proven. If that is done, it is possible that sales and clinical trials can be restarted. If not, at very least, the whole process would have to start over again.

The ministry has concluded that public safety is not an issue at this point, as no threatening side effects were reported over years of clinical trials and sales. The injectable drug was administered to 3,403 patients at 441 hospitals in Korea since officially being released.

It is important to note that Invossa did seem to work. During the four clinical tests in Korea and two in the United States since 2007, patients saw a reduction in pain and an improvement of knee function for two years with a single injection of Invossa.

Kolon Life Science is planning to ask the U.S. FDA to start clinical trials again this month and is setting up an 80-billion-won fund to track the health for 15 years of those injected with Invossa.

Q. But there might be more to it, right?

It’s hard to tell - what’s especially important is who knew what and when they knew it.

Prosecutors are now investigating Kolon Life Science, as the parent may have known about the errant strain earlier than it let on.

They have their best people on the case. The same team that investigated the humidifier sterilizer scandal, which led to around 80 fatalities between 2006 and 20l1, has been assigned to look into the matter.

The Ministry of Food and Drug Safety is conducting an investigation on its own to verify details. Officials are visiting Kolon TissueGene, the Invossa manufacturer based in Rockville, Maryland, in relation to the case this week.

Civic groups and lawmakers are also getting involved.

Q. What are the other implications?

The recent scandal is likely to affect the drug approval process in Korea. The Ministry of Food and Drug Safety said it will mandate companies conduct STR analyses for all gene-therapy drugs awaiting clinical trials and commercialization.

Until now, STR analysis was not required for gene therapy drugs to gain approval for commercialization in Korea.

The scandal could spread to the government.

Many civic groups and lawmakers contend that the Ministry of Food and Drug Safety made suspicious personnel moves in granting approval for Invossa.

During an initial hearing held in April 2017, most of the experts rejected the drug from being commercialized due to its hefty price tag and lack of clinical proof that it actually regenerates joints. Only one committee member was for the commercialization of Invossa.

In a hearing held two months later, the ministry brought in five pro-Invossa experts while excluding three anti-Invossa experts. The drug received the approval of six experts out of nine.

Some argue that the ministry-level inspection is not enough to ensure the safety of the drug for patients, asking the Board of Audit and Inspection to look into the matter.

“It is logical for the Board of Audit and Inspection of Korea, not the Ministry of Food and Drug Safety, to inspect whether Kolon and the ministry were aware of the cell line being different from early on,” said the Korea Alliance of Patients Organization in a statement. “Whether it was an intentional act or gross negligence, if Kolon submitted the wrong data to the ministry, the approval for the drug must be revoked.”

Q. What else do we need to know?

The labeling mistake and resulting business losses are not the only problems Kolon Life Science is facing at this point.

Kolon TissueGene is currently embroiled in a lawsuit with Mitsubishi Tanabe Pharma over Invossa licensing. The Japanese company terminated its agreement with Kolon Life Science in late 2017 for breach of a contract worth around 500 billion won and signed in 2016.

The agreement gave Mitsubishi Tanabe Pharma exclusive licensing and development rights for Invossa in the Japanese market.

Mitsubishi Tanabe Pharma claims that Kolon failed to notify it of a production location change for drugs used in U.S. clinical trials. It is demanding the repayment of 26.2 billion won.

Q. Does the Invossa scandal have implications for the sector or the economy?

Reforms are almost guaranteed. The approval process is seen as far too easy and procedures haphazard.

That, of course, leads to concerns about overcorrecting and overregulating biotechnology. The Hwang Woo-suk scandal is instructive.

Hwang claimed in 2004 that he had cloned human embryos, a world first, and extracted stem cells from them. It was later found in an investigation that he fabricated data and illegally purchased human eggs for his research.

Since then, stem cell researchers in Korea have been unable to pursue projects in the field, as the government implemented regulation after regulation to prevent a repeat of Hwang’s fraud.

More broadly, the Invossa scandal may not only damage the reputation of the company but also the sector as a whole. Biotech in Korea could take a hit, depending of course on the outcome of the investigation.

The Korean government has big hopes for biotech and sees it as one of the engines of future growth. It invested 3.11 trillion won in the sector in 2017.

BY KO JUN-TAE [ko.juntae@joongang.co.kr]
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