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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] SEOUL, South Korea — Feb 5, 2026 — Shareholders who suffered financial losses following the revocation of the license for Invossa-K (Invossa), a gene therapy for osteoarthritis, have once again lost their damages claims against Kolon Life Science and Kolon TissueGene.
On February 5, the Seoul Central District Court (Civil Division 30, presided over by Judge Kim Seok-beom) ruled against 214 shareholders who had filed a 6.5 billion KRW damages suit against Kolon Life Science, Kolon Group Honorary Chairman Lee Woong-yeul, and former CEO Lee Woo-sok.
The court also dismissed a separate 19.7 billion KRW claim filed by 1,082 shareholders against Kolon TissueGene and Honorary Chairman Lee.
Invossa, developed by Kolon TissueGene (the U.S. subsidiary of Kolon Life Science), was initially approved by the Ministry of Food and Drug Safety (MFDS) in 2017 as a world-first gene therapy utilizing human cartilage cells. However, in March 2019, its license was revoked after it was revealed that one of its major components was actually kidney-derived cells (293 cells) rather than the approved cartilage cells. The ensuing controversy led to a sharp decline in the company's stock price.
Shareholders filed multiple lawsuits, alleging that the companies were aware of the component swap and engaged in fraudulent disclosure. However, the courts have consistently ruled in favor of the companies.
The court's reasoning behind the dismissal is centered on two key points:
Lack of Material Misrepresentation: The court found that the company did not intentionally omit or falsely record crucial information for investment decisions.
Product Safety and Efficacy: The court noted that while the cells were different, there was no evidence that the efficacy or safety profile of the drug had significantly changed.
This ruling follows a series of legal victories for Kolon. In December last year, a 6.4 billion KRW suit by 170 shareholders was dismissed, followed by another dismissal of an 8.6 billion KRW suit involving 500 shareholders last month.
Furthermore, Kolon’s leadership was acquitted in a separate criminal trial related to the matter. In November 2024, Honorary Chairman Lee, who was indicted on charges of violating the Pharmaceutical Affairs Act and the Capital Markets Act, was found not guilty in the first instance. The criminal court ruled that it was difficult to prove intentional concealment or criminal intent. Similar acquittals were handed down to former CEO Lee Woo-sok and other top executives.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
