The Korean Exchange (KRX) decided to keep Kolon Tissuegene listed on the Kosdaq market at least for a year, reversing its earlier decision to delist the firm.
The regulator ordered Tissuegene to improve management transparency during a one-year grace period.
“The U.S. Food and Drug Administration (FDA)’s decision of ‘Clinical Hold’ for Invossa-K was the most important reason for giving the firm the grace period,” a KRX official said. “There was a possibility that the clinical trial could have been completely terminated but the FDA has put the trials on hold. It has now become difficult to completely rule out a possibility the company could resume clinical trials in the future.”
The biotech firm is embroiled in legal disputes, including one with Mitsubishi Tanabe Pharmaceuticals in Japan. KRX needed more time to see the results of the lawsuits as well, the official added.
After terminating the agreement with TissueGene for Invossa, Mitsubishi Tanabe filed a lawsuit against the Korean company demanding it returns its upfront payment.
The KRX official also noted that protecting shareholders who have stakes in the company was also a major issue.
Within seven business days from Oct. 10, 2020, TissueGene has to submit to the KRX a record of the details of management improvements.
KRX will hold a meeting of the KOSDAQ Market Committee within 15 days from the submission of the record to decide whether it would kick the firm out of the stock market.
Until then, all transactions of Kolon TissueGene shares will be put on hold. Also, if the company does not complete management improvement early, the stock market operator can decide on delisting before the end of the grace period.