Kolon Group stocks plummeted on the 22nd after Kolon Tissugene announced its osteoarthritis treatment TG-C failed to achieve statistical significance versus placebo in the U.S. Phase 3 primary topline results. Kolon, the holding company, saw its stock price crash 28.27% to 23,600 won in the previous trading session, with trading volume reaching 22.82 billion won—more than four times the average daily volume this year. The clinical setback marks a major blow to the group's 27-year investment in biopharmaceutical development, which began with the establishment of Kolon Tissugene's U.S. subsidiary in 1999.
Kolon Stock Falls 70% from Early May Peak
According to Yonhap Infomax stock data, Kolon's stock price reached 83,600 won in early May before declining over 70% within approximately two months. The sharp decline followed Kolon Tissugene's announcement that TG-C failed to demonstrate statistical significance compared to placebo in the Phase 3 primary topline results.
Kolon Group's total market capitalization decreased from approximately 2.8 trillion won three years ago, when it ranked 47th among Korean conglomerates, to approximately 2.6 trillion won currently, dropping to 53rd place.
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Kolon stock price trend [Source: Yonhap Infomax]
Kolon Tissugene Faces Second Major Clinical Setback
This marks the second major setback for Kolon Tissugene. In 2019, the company faced controversy over the cell origin of its main component, resulting in domestic product approval cancellation and U.S. clinical trial suspension. The company subsequently obtained FDA clinical hold release and completed Phase 3 patient dosing.
Jeon Seung-ho, co-CEO of Kolon Tissugene, stated: "We plan to conduct a detailed and comprehensive analysis of why this result occurred. This is not only to identify the cause but also to proceed well with follow-up procedures."
The group invested resources in biopharmaceutical development for 27 years since establishing Kolon Tissugene's U.S. subsidiary in 1999.
Kolon Reports Rising Debt and Operating Losses
Kolon's core subsidiaries face challenging business conditions. Kolon Global struggles to find growth momentum due to high interest rates and real estate market contraction. The distribution business division, which handles imported car sales, recorded Q1 sales of 652.5 billion won, down 9.8% year-over-year.
The bio business division posted an operating loss of 4.56 billion won in Q1. The manufacturing division, including Kolon Spaceworks, recorded a loss of 4.93 billion won.
![Kolon Group management status and financial pressure]()
Kolon Group management status and financial pressure [Source: Generated by Gemini AI based on article content]
Kolon's consolidated total liabilities reached 5.33 trillion won at the end of Q1, up 50.1% compared to three years ago. The debt ratio stands at 204.2%, exceeding 200%. Long-term borrowings increased 94.4% (315.1 billion won) within three months.
Market Watches Leadership Response to Crisis
Market observers are monitoring whether Vice Chairman Lee Kyu-ho's leadership can stabilize the holding company's stock price. A securities industry official stated: "With core subsidiaries underperforming and the key growth driver in bio momentum broken, downward adjustment of the holding company's valuation is inevitable. The process of confirming the bottom will depend on what kind of crisis-breaking leadership is demonstrated."
FAQ
What caused Kolon stocks to fall on the 22nd?
Kolon stocks fell 28.27% to 23,600 won on the 22nd after Kolon Tissugene announced that its osteoarthritis treatment TG-C failed to achieve statistical significance versus placebo in U.S. Phase 3 primary topline results.
What is Kolon's current debt ratio?
Kolon's debt ratio stands at 204.2% as of Q1 end, exceeding 200%. The company's consolidated total liabilities reached 5.33 trillion won, up 50.1% compared to three years ago, with long-term borrowings increasing 94.4% (315.1 billion won) within three months.
What happened to Kolon Tissugene in 2019?
In 2019, Kolon Tissugene faced controversy over the cell origin of its main component, which resulted in domestic product approval cancellation and U.S. clinical trial suspension. The company later obtained FDA clinical hold release and completed Phase 3 patient dosing before the recent trial failure.
