"It Was Supposed to Go to 280,000 Won" ... After a 90% Crash From 150,000 Won to 15,000 Won, Brokers Finally Downgrade It From 'Buy' to 'Neutral'

[Financial News] Koolong TissueGene's stock, which hit a fresh 52-week high of 149,000 won intraday on May 12, has fallen to 15,000 won in just over two months. After being locked at the daily limit down for three straight trading sessions following the disclosure of its failed U.S. phase 3 clinical trial, it plunged nearly 29% even on the day the limit-down restriction was lifted. A brokerage that had set a target price as high as 280,000 won in May has now downgraded its investment rating from 'buy' to 'neutral' without providing a target price.

The sell-off began with the U.S. phase 3 trial results disclosed on the 20th. Koolong TissueGene said the first analysis of its U.S. phase 3 trial for TG-C, a cell and gene therapy for knee osteoarthritis, failed to meet statistical significance.
After the disclosure, the stock headed straight for the daily limit down day after day. Following three consecutive limit-down sessions, it closed at 15,000 won on the 24th, down 28.74%. Compared with the closing price of 101,100 won on the 24th of last month, it has fallen more than 85% in a month. During the limit-down period, only sell orders piled up and no trades were executed, leaving shareholders unable to sell even if they wanted to.
After the stock's collapse, Jeon Seung-ho, CEO of Koolong TissueGene, held a press briefing and said, "I do not think this was a clinical trial failure. I think it was a half-success. Please see it as a growing pain." But his remarks did not stop the decline.
Analysts say the reason Koolong TissueGene's losses were so severe is that, unlike other biotech firms with diverse pipelines, it had effectively been relying on a single drug candidate. The key issue now is the results of the second phase 3 trial, TGC-12301, due to be released in October. Its previously stated plan to file for approval with the U.S. Food and Drug Administration (FDA) in the first quarter of 2027 and begin commercialization in 2028 now appears likely to be delayed.

The brokerage community has also reversed course in just two months. On May 7, Korea Investment & Securities Co., Ltd. raised its target price for Koolong TissueGene from 170,000 won to 280,000 won, up 65% from the previous estimate, and valued TG-C at more than 20 trillion won. But after the clinical results were announced, it downgraded the stock from 'buy' to 'neutral' without issuing a target price.
Researcher Wi Hae-joo of Korea Investment & Securities Co., Ltd. said, "If the second phase 3 trial succeeds, it may be possible to submit a biologics license application (BLA) to the FDA." He added, "Even in that case, the robustness of the clinical results would inevitably be lower than in previous estimates, and market share assumptions would also need to be revised downward." 
[email protected] Seong Min-seo Reporter