'Everyone's biotech' betrays investors as Kolon TissueGene hits limit-down for third straight day

"I can't even sell it — please, someone save me," said one retail investor in Kolon TissueGene.

"It's completely finished," said another.

Kolon TissueGene, once celebrated as a flagship biotech stock on the strength of its osteoarthritis treatment Invossa, hit the daily limit-down for a third consecutive trading session after its US Phase 3 trial failed. Three straight limit-down sessions is an exceptionally rare collapse. Many investors who want to sell cannot find buyers.

Investors who had counted on a successful trial result are in a state of panic. The share price has plunged roughly 90 percent from its peak, wiping out fortunes. Some investors are reported to have suffered losses of 100 million won or more in a matter of days.

The market had widely expected Kolon TissueGene's cell and gene therapy TG-C — formerly known as Invossa-K — to succeed in its osteoarthritis trial, making the failure all the more devastating.

On Thursday morning, Kolon TissueGene shares fell 9,000 won, or 29.95 percent, to 21,050 won ($14), hitting the daily limit-down. It was the third consecutive limit-down session since Tuesday. The stock traded around 140,000 won in May, fell to around 90,000 won by July 10, and has now collapsed to around 21,000 won.

Wi Hae-ju, a researcher at Korea Investment & Securities, said the Phase 3 trial's top-line results had been disclosed and that efficacy was not confirmed on either of the two primary endpoints, and cut the investment rating from "buy" to "neutral."

That is effectively a sell signal. Even so, many investors find it nearly impossible to exit their positions given the scale of their losses.

Wi said a second Phase 3 trial, if successful, could potentially allow the company to file a Biologics License Application with the US Food and Drug Administration, but added that in that case the robustness of the clinical results would inevitably fall short of previous estimates and market share projections would need to be revised downward.

Wi also cut the estimated probability of trial success by 45 percentage points and added that the current share price leaves limited upside relative to TG-C's assessed fair value.

HLB also hit the daily limit-down for two consecutive sessions immediately after its FDA approval fell through. On July 9, local time, HLB received a third Complete Response Letter from the FDA for its combination therapy of rivoceranib and camrelizumab as a first-line liver cancer treatment, again blocking approval of the drug.

The company said, as it had after the previous two rejections, that the letter concerned manufacturing and quality control issues at its Chinese partner Hengrui Pharmaceutical — not efficacy or safety concerns. The market, however, has grown deeply skeptical of the repeated approval delays.

Industry insiders worry that a string of setbacks at large-cap biotech companies with market capitalizations in the trillions of won could erode broader confidence in South Korean biotech beyond share price declines alone. With domestic biotech stocks already underperforming this year, investor sentiment is deteriorating further.

Given the severity of the losses, investors are being urged to exercise greater caution when putting money into biotech.