Once high-flying Kolon TissueGene delisted from Kosdaq
Korea Exchange’s (KRX) Kosdaq market committee approved the removal of the company late Wednesday. The corporate review board had first voted for Kolon’s delisting in August 2019 but granted a year of grace period for the company to improve its business. Wednesday’s decision was made after it was determined that Kolon’s performance in the past year was insufficient to warrant a stay.
But Kolon TissueGene may not be immediately removed.
According to KRX's rules, the company can raise objections within seven working days after receiving notice. This would force another review board meeting within 15 working days. The board would then decide whether to grant another year of grace period based on a submitted recovery plan.
“We will actively respond in every administrative way possible, including objections,” Kolon TissueGene said in a statement.
Kolon Life Sciences, which owns 12.57 percent of Kolon TissueGene, fell 7.5 percent in trading Thursday.
Before the controversy, Invossa was seen as one of the most promising projects in the entire Kolon Group. Listed on the secondary market in November 2017, Kolon TissueGene’s market cap exceeded 4 trillion won ($3.5 billion) shorty afterward.
Kolon is accused of falsifying documentation. Its gene therapy, marketed as a treatment for arthritis of the knee, was approved by Korean authorities in 2017 on the basis that it used cartilage cells. It later turned out that the treatment used kidney cells, which civic groups have claimed could cause tumors. Kolon claimed the matter was a mistake and that it wouldn't affect the drug's efficacy and safety. Invossa’s license was nullified in May 2019.
Phase 3 clinical trials in the United States were halted last year, but in April this year, the U.S. Food and Drug Administration approved a resumption of tests.
Kolon TissueGene was suspended on the exchange in May 2019. A total of 34.5 percent of its stock is owned by 64,555 individual investors.
BY SONG KYOUNG-SON [firstname.lastname@example.org]