Nature Cell said Tuesday that it could not accept the Ministry of Food and Safety’s decision to reject its application for Joint Stem, stem cell treatment for degenerative arthritis.
“As the developer of this product, we have submitted sufficient data about the clinical significance that fit the applied indications and cannot accept the ‘lack of clinical significance’ the ministry cited as the reason for returning our application,” the company said in a statement on its website.
Nature Cell said the ministry had demanded the analysis of differences in effects according to gender ratio, structural improvement effect data, the superiority of effects compared to other treatments, and mechanism of action. It added that although such demands did not conform with screening standards by the Biopharmaceutical Product Act, the company faithfully responded to them based on its follow-up observation results of phase 3 clinical trials.
Nature Cell said it would file an objection with the ministry and call for concrete explanations for rejecting its application. Besides, it also plans to release Joint Stem after winning approval in various foreign markets, including the U.S., Australia, Mexico, Brazil, Singapore, United Arab Emirates, Philippines, and Malaysia.
Last Saturday, the company sent a letter titled “We are stunned” to its shareholders, expressing its frustration with what it saw as the unfair rejection. It used emotional expressions, such as “We can’t believe and can’t help but laugh” or “Wrongs must be rectified by all means” in the letter.
However, the stock market reacted coldly. Since the disclosure of the regulator’s rejection of the Joint Stem application, Nature Cell’s share prices have kept falling.
At 11 a.m. Tuesday, Nature Cell’s shares were traded at 10,140 won ($7.67), down 16.27 percent from Monday’s closing price. It marked a drop of about 57 percent from 24,650 won before the ministry rejected the application on Thursday. In midday trading, the share price sank to 9,301 won, falling below 10,000 won.
On Friday, Nature Cell issued a public filing, making public the ministry’s rejection of its application for Joint Stem. It added that R Bio, which developed Joint Stem, would examine the reasons for rejection and file an objection.
In December 2013, Nature Cell signed a 1.5 billion won contract with R Bio for the domestic sales right of Joint Stem. The product had not been commercialized for eight years. Still, Nature Cell announced in 2021 that it would withhold the termination of the contract.
With the latest rejection of the application, the two companies agreed to reserve the contract’s termination until the result of the objection comes out and rediscuss the issue according to the result.