Kolon TissueGene 'Phew...'... Avoided Delisting with One-Year Improvement Period Granted

Securities Trading Suspended Since May Last Year... Stock Price Just Before Suspension Was 8,010 Won

Kolon TissueGene's Invossa-K Injection (Photo by Asia Economy DB)

[Asia Economy Reporter Geum Bo-ryeong] Kolon TissueGene, which caused the 'Invossa K injection (Invossa)' ingredient scandal, has avoided delisting.

According to the Korea Exchange on the 18th, the KOSDAQ Market Committee held a review on whether to delist Kolon TissueGene and decided to grant a one-year improvement period.

Kolon TissueGene must submit a report on the implementation of the improvement plan and an expert's verification of the results within 7 business days from December 17 of next year, the end date of the improvement period. The Exchange plans to hold the KOSDAQ Market Committee within 15 business days from the submission date to review and decide on the delisting.

Kolon TissueGene is the developer of Invossa, a gene cell therapy for osteoarthritis. Invossa's main ingredient was revealed to be kidney-derived cells, not the originally known cartilage-derived cells, leading to the cancellation of its product approval by the Ministry of Food and Drug Safety in May last year. The Exchange judged that Kolon TissueGene had 'falsely stated or omitted important matters' and designated it for a substantial review of listing eligibility, granting a 12-month improvement period in October last year.

After the improvement period ended, Kolon TissueGene submitted the implementation report of the improvement plan, but the KOSDAQ Market Committee evaluated it as insufficient and resolved to delist at the market committee meeting held on the 4th of last month. Subsequently, Kolon TissueGene filed an objection on the 16th of last month. Regarding this, the KOSDAQ Market Committee was held twice more on the 7th and 15th but failed to reach a conclusion, deciding to postpone the decision.

Separately, Kolon TissueGene received an additional improvement period until May 10 next year due to further delisting reasons, including 'disclaimer of opinion by external auditor for the 2019 fiscal year' on March 16 and 'disclaimer of opinion by external auditor for the first half of the 2020 fiscal year' on August 28.

Also, the substantial review procedure for listing eligibility related to the reason occurring on July 21 (charges of embezzlement and breach of trust) will proceed after resolving the delisting reason due to the disclaimer of audit opinion.

Trading of Kolon TissueGene's stock has been suspended since May last year. The stock price just before the suspension was 8,010 KRW. As of December 31 last year, there were a total of 64,555 minority shareholders holding 34.48% of the shares.