[Bio Shaking the Market] NatureCell①, Chairman Ra Jeong-chan's Determination Toward Developing Stem Cell Therapeutics

Continued Development of JointStem After Albaio Delisting in 2013
JointStem Completes Phase 3 Clinical Trial in Korea... Significant Efficacy Confirmed
NatureCell, Holder of Domestic Rights, Sees 100% Stock Price Increase in One Month

[Asia Economy Reporter Hyungsoo Park] Since the news of the domestic clinical success of the stem cell treatment Jointstem was announced, the corporate value of Naturecell, which holds the exclusive domestic sales rights, has been rapidly increasing. The stock price has more than doubled in just over a month, pushing Naturecell's market capitalization beyond 1.6 trillion KRW.

According to the financial investment industry on the 24th, Naturecell's closing price on the 14th of last month was 11,750 KRW, and it rose 103% in just over a month. The closing price on the previous day was 23,900 KRW, with a market capitalization of 1.4664 trillion KRW.

The Korea Exchange KOSDAQ Market Headquarters requested a disclosure response asking for the reason behind the sharp rise in stock price, but Naturecell replied that there was no material information subject to disclosure related to the stock price fluctuation.

Earlier, Albio, an affiliate of Naturecell, announced on the 17th of last month that the domestic Phase 3 clinical trial of the knee osteoarthritis treatment 'Jointstem' was successful. According to the clinical study report (CSR) from the clinical trial contract research organization 'LSK Global PS,' statistically significant pain reduction and improvement in joint function were confirmed. Jointstem is evaluated as a groundbreaking injection that can treat osteoarthritis with a single administration, replacing existing similar drugs or surgical treatments.

Albio has been developing Jointstem since 2005 and has invested thousands of billions of KRW over 16 years. Albio is a company that changed its name from R&L Bio, which failed to receive an audit opinion for the 2012 fiscal year and was delisted from the KOSDAQ market in 2013. Dr. Rajangchan continued the development of Jointstem even after Albio's delisting and completed the domestic Phase 3 clinical trial after numerous trials and tribulations.

Rajangchan, chairman of Naturecell and the chief developer of Jointstem, said, "We are also well preparing the quality and GMP parts, which are other requirements for product approval," adding, "We plan to apply for new drug approval within a few months."

Jointstem, developed by Albio, is an osteoarthritis treatment using adult stem cells. Since adult stem cells are harvested, isolated, and cultured from the patient's adipose tissue, immune rejection does not occur. Jointstem is injected directly into the patient's knee joint cavity in a single administration without surgery, resulting in fewer side effects and shorter recovery time compared to existing surgeries. It is expected to increase satisfaction in terms of ease of use.

According to the Health Insurance Review and Assessment Service, the number of osteoarthritis patients in Korea was approximately 3.68 million in 2016, with medical expenses reaching 369.2 billion KRW. The number of patients and medical expenses have been steadily increasing. From 2012 to 2016, the number of osteoarthritis patients increased by an average of 3% annually, and drug costs also rose by an average of 4.8% annually. The global osteoarthritis treatment market is expected to grow at an average annual rate of 8.1%, from 680 million USD in 2019 to 1.01 billion USD in 2024.

If the Korean Ministry of Food and Drug Safety approves the product license for Jointstem, it is expected to help improve the performance of Albio and Naturecell.

Chairman Ra expected in September 2012 that Albio would become a global company within 10 years. At that time, Ra signed a contract in Yeouido, Seoul, to donate 90% of his assets, including stocks and real estate, to four organizations: Bethesda Life Foundation, Yesung Medical Foundation, Korea Christian Academic Institute Foundation, and Joongang Academy Foundation, within 10 years. Promising social contribution, Ra said, "Since 2005 (after the Hwang Woo-suk incident), there have been many difficult days due to distrust and skepticism about stem cell research, with people questioning if it was a fraud," adding, "The purpose of adult stem cell research is to cure patients with intractable diseases that are difficult to treat with modern medicine." He continued, "I was also burdened by the perception that I was trying to make money," emphasizing, "I plan to devote the rest of my life as a gatekeeper rather than a company owner, and I hope this intention is properly understood."

As of the end of March this year, Chairman Ra holds a 6.74% stake in Albio. He serves as CEO of Albio, Naturecell, and Biostar Korea. Looking at Naturecell's shareholding structure, Albio holds 11.58%, and Biostar Korea holds 11.27%.