Kolon TissueGene shares hit the ceiling as soon as they return to Kosdaq

Kolon TissueGene¡¯s share price jumped to its daily limit of 30 percent Tuesday upon returning to the Kosdaq market from lifting of suspension related to suspicions around Invossa drug and criminal charge.

The Kosdaq-listed biopharmaceutical company shot up by 29.91 percent, or 4,800 won to 20,850 won shortly after the opening where its starting price was set at 16,050 won, 100 percent above its closing price three years and five months ago before suspension. It has stayed at the ceiling throughout the day.

Korea Exchange Monday evening announced it was allowing back Kolon TissueGene shares from the following day. The shares was suspended in May 2019 due to Invossa marketing cancellation and an embezzlement scandal.

The trade resumption was cleared by both authorities under the Korea Exchange that had separately reviewed Invossa and embezzlement cases.

The Kosdaq Market Committee focused on an ongoing phase 3 trial of Invossa, a controversial gene therapy for osteoarthritis, in the United States. The authorities considered the fact that the clinical trial is underway in the U.S. and that the majority shareholder has pledged to provide financial support if the company runs out of funds, a Korean Exchange official said.

Earlier, majority shareholder Kolon announced that it would invest $30 million in a third-party capital increase by April next year to finance clinical trials of Kolon TissueGene.

Regarding the embezzlement case dealt with by the Corporate Review Committee, the official said the fact that the amount of embezzlement was 2 billion won, which was small compared to their equity capital, must have influenced their judgment.

Invossa was once approved by Korean health authorities in July 2017, but it was canceled in May 2019 due to an ingredient mixup. However, the company received approval from the U.S. Food and Drug Administration to resume a suspended phase 3 clinical trial of the drug in the U.S. in April 2020. Later, a phase 2 trial was approved for another indication on Dec. 3, 2021, followed by the first patient administration in the planned phase 3 trial on Dec. 28 in the same year.

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