The ‘Placebo Response’ That Hindered TG-C Puts Korean Biotech on Edge

Global New Drugs Face Repeated Failures
Academic Debate Over Solutions Continues

The "placebo response" is emerging as a renewed variable in clinical trials conducted by domestic bio companies. Recently, Kolon TissueGene's osteoarthritis treatment TG-C encountered this hurdle during clinical testing. Moreover, other bio companies scheduled to announce clinical trial results in the second half of the year are also targeting diseases where the placebo response could largely determine the success or failure of their new drug candidates in clinical studies.

According to the pharmaceutical and bio industry on July 24, "placebo inflation," referring to an abnormally high placebo response, has recently been cited as a factor that derailed several major new drug candidates in clinical trials. The placebo response is a phenomenon where the symptoms of patients who receive a placebo (inactive treatment) improve much more than expected, causing the difference in effect between the actual drug and the placebo to disappear.

On July 20, Kolon TissueGene announced the first topline results from the TG-C Phase 3 trial, stating, "While pain relief and functional improvement were observed in the primary endpoint, statistical significance was not achieved due to a higher-than-expected placebo response." Kolon TissueGene further commented that it would investigate the cause of the unusually strong placebo response.

The issue of being hampered by the placebo response is not limited to domestic drugs—global new drugs have faced the same obstacle. In 2019, German Merck's osteoarthritis treatment sprifermin succeeded in thickening joint cartilage in its Phase 2 clinical trial, but the placebo group, which received only saline injections, also saw significant pain relief, making it impossible to prove the symptom improvement effect. Similarly, in 2017, all three Phase 3 trials of the Japanese company Daiichi Sankyo's fibromyalgia treatment mirogabalin failed to outperform the placebo, with the company attributing this to a larger-than-expected placebo response.

The placebo response is especially pronounced in diseases where patients self-assess their symptoms. TG-C, sprifermin, and mirogabalin all targeted such conditions. In clinical trials, patients do not know whether they have received the actual drug or a placebo. As a result, some patients report feeling less pain or better symptoms just from the expectation that "I have been treated, so I will get better" even if they received a placebo.

Is It a 'Variable to Eliminate' or a 'Therapeutic Effect'? ... Heated Debate in Academia

There is considerable debate in academia on how to address the placebo response in clinical trial evaluation standards. One side argues, "Eliminate it altogether." Since the placebo response masks the real efficacy, these experts suggest excluding patients who are particularly responsive to placebos before the trial even begins. Methods such as the sequential parallel comparison design (SPCD), where placebo is first administered and only non-responders are enrolled in the main study, are representative of this approach.

The other side argues, "Do not artificially eliminate it." Since the placebo response is also a real response experienced by patients, artificially selected patient groups would be different from real-world patients and may not reflect actual prescription situations. Therefore, they believe that, even if trials become more challenging, it is better to leave the placebo response as is and evaluate it accordingly.

There is also research indicating that the placebo response is growing stronger over time. In 2015, a research team from McGill University in Canada published a paper in the international journal PAIN, reporting that while the drug response remained constant, the placebo response increased steadily, narrowing the gap between drug and placebo effects.

It was additionally noted that this phenomenon was especially prominent in trials conducted in the United States, causing a stir in academia. The research team analyzed that as the scale and duration of clinical trials increased, the placebo response also grew. They cited factors such as drug advertisements in the U.S. potentially raising patients' expectations for treatment as possible reasons.

'7 Trillion-Won Technology Export'—Placebo as a Variable for Domestic Alzheimer’s Treatment

The placebo response has also emerged as a major variable in connection with domestic bio companies' drug development events scheduled for the second half of the year. A notable example is Aribio's oral Alzheimer's disease drug candidate, AR1001. Aribio is scheduled to announce the topline results of AR1001's global Phase 3 trial, conducted in 13 countries including Korea, the United States, and Europe, in September.

The osteoarthritis field also has several drug candidates waiting to be tested for the placebo response. Kangstem Biotech is releasing the topline results of the domestic Phase 2a trial for Oscar, its cell therapy for knee osteoarthritis, this month. Kolon TissueGene also plans to announce the topline results from another Phase 3 trial of TG-C in the United States in October.

HanAll Biopharma is aiming to secure the topline results of its U.S. Phase 3 trial for HL036, a treatment for dry eye syndrome, within the year. These trials use patient-reported measures of their symptoms' severity to assess efficacy. Since patients do not know whether they are receiving the actual drug or a placebo, the more subjective and expectation-driven the evaluation criteria, the greater the likelihood that the placebo response could influence the trial outcomes. Placebo response is particularly pronounced in central nervous system (CNS) diseases, such as Alzheimer's disease.

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