Jointstem Wins in Court, but Commercialization Remains Uncertain; Shareholders File Criminal Complaint Against MFDS Chief

The approval dispute over Jointstem, an autologous stem cell therapy for degenerative knee osteoarthritis, is expanding into the judicial and criminal arenas and becoming a protracted battle.

According to the biotech industry on the 3rd, 130 shareholders of Nature Cell, which holds the domestic rights to Jointstem, recently filed a complaint with the Seoul Metropolitan Police Agency against Oh Yu-kyung, head of the Ministry of Food and Drug Safety (MFDS), relevant officials and members of the Central Pharmaceutical Affairs Council, alleging dereliction of duty and abuse of authority that obstructed the exercise of rights.

In 2023, 263 shareholders filed a complaint on similar grounds, but prosecutors closed the case with a decision not to indict for lack of evidence. After the Seoul Administrative Court recently ruled that the MFDS’s rejection of the product approval application should be overturned, the shareholders cited the ruling as new evidence and renewed their legal pressure.

In a lawsuit filed by the developer, R&L Regenerative Medicine Institute (formerly Albio), seeking to overturn the denial of product approval, the 14th Division of the Seoul Administrative Court ruled in the plaintiff’s favor in July. The court found that the requirements for product approval under the Pharmaceutical Affairs Act are safety and efficacy, and that no explicit provision requires superiority over previously approved treatments.

The court also added that when statistical significance is confirmed for a primary efficacy endpoint in accordance with a preapproved clinical trial protocol and statistical analysis plan, it is difficult to dismiss that finding arbitrarily. It also pointed to a flaw in the fairness of the review, noting that some members who led negative opinion at the first Central Pharmaceutical Affairs Council meeting had potential competitive relationships.

However, the biotech industry and legal community have offered cautious interpretations of the ruling’s practical effect. The administrative court’s decision to overturn the agency action only found that specific grounds for rejection cited by the MFDS fell outside legal or procedural bounds; it did not compel product approval or directly grant approval.

The MFDS made clear it would not back down, filing an appeal with the Seoul High Court on July 30. The company announced the appeal in a public disclosure and said it would respond, but if the case proceeds to the Supreme Court, a final ruling could take at least several more years.

Jointstem’s domestic regulatory ordeal is approaching a decade. The therapy is an autologous adipose-derived mesenchymal stem cell treatment made by culturing adult stem cells collected from the patient’s own adipose tissue, such as in the buttocks, and administering a single dose into the knee joint cavity.

The developer applied for conditional product approval in 2018, but the application was rejected for insufficient evidence of efficacy. It applied for full approval in 2021 based on the results of a domestic phase 3 trial, but again failed to clear the hurdle in 2023 after a negative assessment by the Central Pharmaceutical Affairs Council. After supplementing the application with long-term follow-up data, the company reapplied, but in August 2025 the MFDS issued a final denial, citing insufficient clinical significance.

The gap between statistical and clinical significance is the medical community’s foremost concern. In the domestic phase 3 trial, which enrolled 261 patients, pain was measured using the visual analog scale (VAS) and osteoarthritis symptoms using the Western Ontario and McMaster Universities Osteoarthritis Index (WOMAC) at 6 months. The Jointstem group met the primary efficacy endpoint, with a p value below 0.05 compared with the placebo group.

However, statistical significance is a mathematical finding that the probability of a difference between the 2 groups occurring by chance is low; it does not guarantee that the treatment effect patients experience is medically meaningful. Skepticism has been raised about whether the therapy has value as a cell treatment that could cost tens of millions of won if the difference in improvement over placebo is not substantial enough to matter in clinical practice.

Official review guidelines from the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH), including those of the U.S. Food and Drug Administration (FDA) and European Medicines Agency (EMA), also do not judge drug efficacy based on a p value alone; they require independent consideration of the absolute magnitude of the effect and its clinical context.

The lack of sufficient objective evidence for cartilage regeneration is also cited as a weakness. In the domestic phase 3 trial, cartilage defects were assessed by magnetic resonance imaging (MRI) 6 months later, but no significant difference in structural changes was found between the treatment and placebo groups.

Ultimately, the effect demonstrated by Jointstem amounted to temporary pain relief and some improvement in joint function, not fundamental cartilage regeneration or inhibition of disease progression. Some in the medical community say it would be difficult to grant product approval unless the therapy can demonstrate the structural regeneration that distinguishes cell therapy from existing intra-articular hyaluronic acid or steroid injections.

Interpretations of the U.S. regulatory agency’s decisions have also faced criticism for being overstated. Nature Cell has cited the FDA’s designation of Jointstem as a regenerative medicine advanced therapy (RMAT) and breakthrough therapy (BT) as a key argument in criticizing the domestic regulator’s decision.

However, RMAT and BT designations are programs that support expedited development and review based on potential shown in early data and unmet medical need; they do not guarantee final safety and efficacy or constitute marketing approval. Nature Cell is pursuing a strategy to obtain approval of a biologics license application (BLA) based solely on domestic phase 3 data from 261 Korean patients, without additional U.S. clinical trials.

With no efficacy or safety data from diverse racial groups in the United States and no evidence of improved cartilage structure, it remains unclear whether FDA reviewers would approve the therapy without requiring additional clinical trials, according to assessments.

The industry has also viewed unfavorably the shareholders’ emotional public campaign, including criminal complaints against the head of the regulatory agency and review committee members. There is also considerable disagreement with the claim that a particular committee member mentioned in the administrative court ruling had a conflict of interest.

The shareholders claim that a professor at the Catholic University of Korea, who chaired the Central Pharmaceutical Affairs Council at the time, founded a stem cell biotech venture that was a potential competitor to Jointstem. However, the company founded by the professor is developing regenerative agents based on ribonucleic acid (RNA) and peptides, rather than directly administering stem cells, and is not known to have an arthritis treatment in its pipeline.

Concerns have been raised that if drug approval reviews, which should be based on scientific facts and data, are tainted by legal complaints and personal attacks, the independent and objective expert reviews of the MFDS committee members will inevitably be undermined.

The first round of the Jointstem dispute, the initial trial in the administrative lawsuit, has ended, but the case is becoming a protracted legal battle that will continue through a second trial at the Seoul High Court and an appeal to the Supreme Court. Even if the court’s decision to overturn the denial is ultimately upheld, the MFDS retains administrative discretion to address legal deficiencies in accordance with the ruling, conduct a new review and reject the application again on other grounds.

Observers say that if the company relies only on statistical significance and fails to prove the evidence of cartilage regeneration and clinical superiority essential to treating patients, it will be difficult to clear the final hurdle to commercialization even if it wins the lawsuit.