Former Kolon TissueGene CEO Lee Kwan-hee, the inventor of now-suspended gene therapy Invossa-K, had reportedly sold off his all stakes of Kolon Life Science just before Kolon won Invossa license in 2017.

At that time, stock prices of Kolon Life Science hovered at around 120,000 won ($101.5) per share, which was nearly at the record high level.

When Lee Kwan-hee was a professor at Inha University School of Medicine in the mid-1990s, he initiated the development of Invossa with Lee Woong-yeol, former Kolon group chairman who went to the same high school with Lee Kwan-hee.

Lee Kwan-hee suggested that they could treat arthritis if they took joints and cartilage cells from the sixth finger cut from a polydactyly patient and made them into treatment. Enthusiastic about the idea, Lee Woong-yeol started joint research between Inha University School of Medicine and Kolon.

The former Inha University professor and Kolon TissueGene CEO Noh Moon-jong, who was the head of the life science research team at Kolon’s central research institute at the time, led the early development of Invossa’s ingredients.

After the Lee-Noh joint research team’s success in developing initial substance for Invossa, the names of the two were registered as patent inventors. In 1999, a biotech venture TissueGene, currently Kolon TissueGene, was set up in the U.S. to commercialize Invossa. The key developer Lee Kwan-hee took the position of TissueGene CEO. Lee also doubled as a director of TissueGene Asia, which aimed to sell Invossa in Asia.

After TissueGene Asia changed the company’s name into Kolon Life Science, it issued rights offerings several times, and Lee Kwan-hee obtained 100,000 shares of Kolon Life Science.

The professor started to sell his stakes in Kolon Life Science in 2010 after he stepped down from the executive position at Kolon. Although he has maintained the title of Kolon TissueGene CEO for some time, he has also begun to distance himself from Invossa.

Then, between June and September 2017, right before and after Invossa’s winning of approval from the Ministry of Food and Drug Safety (MFDS), Lee sold his remaining 30,000 shares of Kolon Life Science. During the three months, the stock prices of the company were as high as 120,000 won per share, buoyed by anticipation for Invossa approval in Korea.

Later the year, Lee left Kolon TissueGene and completely cut off any connection with Invossa. His acts were seen odd because he must have wished for the commercialization of the drug more than anyone else. As the inventor of Invossa, he had written scores of Invossa-related papers.

Lee is reportedly doing another venture business in the U.S.

Lee’s washing his hands of the Invossa issue was “successful.” After news broke that Invossa failed to prove cartilage generation effect despite the local license, stock prices of Kolon Life Science plummeted as much as 20 percent. The company’s capital increase through free issues of new shares and licensing deals pushed the stock prices back up, but Kolon shares never exceeded the highest level right before the MFDS’ granting of approval.

After the MFDS suspended the sales of Invossa due to the mislabeling of its cell ingredient, Kolon shares continued to slide. Kolon Life Science shares were at about 22,300 won as of 11:00 a.m. Monday, almost one-sixth of those at 120,000 won when Lee sold his stakes.

Former Kolon Chairman Lee Woong-yeol, who used to call Invossa as “his fourth child,” abruptly resigned in November last year and received more than 40 billion won retirement pay.

In the end, the two key persons who led the early development of Invossa left Kolon after realizing enormous profits out of the drug.

Kolon TissueGene CEO Noh is the only researcher among initial developers of Invossa still working at the company.

Lee Kwan-hee and Lee Woong-yeol are seemingly free from any responsibility for the recent Invossa debacle that its cell ingredient was a cancerous GP2-293 cell and that over 3,700 patients received the mislabeled gene therapy.

The patients and minority shareholders of Kolon said they were the only people who are dealing with the damages.

Choi Deok-hyeon, an attorney at law at Law Firm Jeil, who is leading the class-action lawsuit of shareholders and patients against Kolon, said there were many suspicions over critical executives involved in Invossa development.

“Those who were in charge of R&D sold shares when the stock prices hit the peak, and key persons rushed to change their nationality from Korean to American. A thorough investigation should reveal the fraud,” he said.

The MFDS on Thursday filed a complaint against Kolon Life Science and CEO Lee Woo-sok with the Seoul Central District Prosecutors' Office, alleging that the company intentionally fabricated data to win Invossa approval.

Lee Kwan-hee (left), former Kolon TissueGene CEO, and Lee Woong-yeol, former Kolon Group chairman

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