Kolon Honorary Chairman Lee Woong-yeol's 'Inbosa' Not Guilty Verdict: Meaning and Implications [AK Radio]

On the 29th of last month, the Seoul Central District Court acquitted all parties involved, including Lee Woong-yeol, Honorary Chairman of Kolon Group, and Lee Woo-seok, former CEO of Kolon Life Science, who were indicted on charges of false labeling of the components of Invossa. This verdict was the exact opposite of the prosecution’s demand for a heavy sentence of 10 years imprisonment and a fine of 500 billion KRW. The ruling, delivered about 4 years and 10 months after the indictment in 2020, opened a new chapter for discussions on the future of the domestic bio-industry.

Invossa is the world’s first developed gene therapy for degenerative arthritis. Kolon established a research and development corporation in the United States and spent 17 years developing the product. Chairman Lee Woong-yeol, who has three children, showed special affection for Invossa, referring to it as his “fourth son,” and invested hundreds of billions of won in development costs.

Invossa features an innovative mechanism that differentiates it from existing treatments. It is designed to regenerate damaged cartilage when injected into the joint cavity, with the most notable characteristic being that its effects last for more than a year after a single administration. This therapy consists of two vials: the first vial contains cartilage cells, and the second vial contains genetically transformed cells that promote cartilage growth.

In clinical trials conducted during the development process, Invossa demonstrated excellent efficacy. Unlike existing treatments that required continuous administration, Invossa was evaluated as an innovative therapy because it provided long-lasting effects with just one dose. Although it was expensive, costing between 6 to 7 million KRW, it was regarded as a groundbreaking advancement in terms of therapeutic effect and convenience.

In 2019, an unexpected issue arose during the review process for FDA approval in the United States. It was confirmed that the component in the second vial was not the originally reported cartilage-derived cells but kidney-derived cells. This was discovered during a detailed analysis for entry into the U.S. market, and Kolon Life Science promptly self-reported this to the Korean Ministry of Food and Drug Safety (MFDS). The MFDS immediately revoked Invossa’s product approval upon confirming the component error. At that time, over 3,700 patients had already received Invossa injections, so the MFDS prioritized patient safety. Subsequently, the MFDS began long-term follow-up observations of the patients who had been treated.

The prosecution launched an investigation on the grounds that Kolon knowingly concealed the difference in components, accusing them of illicit gains amounting to approximately 16 billion KRW from 2017 to 2019. However, the first trial court found insufficient evidence to prove intent. The court stated that not all errors occurring during drug development can be legally punished and emphasized the need for judicial caution regarding scientific and technological matters. This ruling is regarded as considering the unique characteristics of the bio-industry. The court unusually pointed out that the prosecution’s investigation and indictment were somewhat excessive. It stressed that mechanical and excessive judicial judgments in the field of science and technology should be avoided. This is expected to set an important precedent for future investigations related to the bio-industry.

Currently, Invossa is undergoing Phase 3 clinical trials for FDA approval in the United States. The U.S. FDA accepted Kolon’s component correction and authorized the clinical trials, with Phases 1 and 2 already successfully completed. Patient dosing for Phase 3 has been completed, and the evaluation of efficacy is pending. Meanwhile, in Korea, the product approval cancellation remains in effect, making sales impossible. Kolon filed lawsuits to overturn the cancellation but lost in both the first and second trials. The company has now abandoned plans to re-enter the domestic market and is focusing on entering the U.S. market.

Yonhap News

This case raised a fundamental question about how to balance innovation and safety in the bio-industry. While the MFDS’s strict regulations were aimed at ensuring patient safety, the FDA’s flexible approach is seen as opening possibilities for the development of innovative therapies. To strengthen the global competitiveness of the domestic bio-industry, an institutional foundation that simultaneously pursues safety assurance and innovation support is necessary. In particular, a flexible response system to unexpected situations that may arise during new drug development is required. The Invossa case provides important implications for the global expansion strategies of domestic bio companies. Strategic considerations are needed on how to overcome the gap between domestic regulations and global standards, and how to manage the risks arising in this process.

The acquittal verdict for Invossa is expected to be an important milestone that can determine the future of the domestic bio-industry beyond a simple legal judgment. Although second and third trials remain, the various issues raised through this case will serve as a crucial foundation for the development of the bio-industry going forward. Discussions on the scope of judicial judgment regarding science and technology, the role of regulatory agencies, and institutional support for securing global competitiveness are expected to continue.

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