The stock traded at 15,620 won as of 10:04 a.m. on the tech-heavy KOSDAQ, down 5,430 won, or 25.94 percent from the previous close.
The shares had already hit the daily limit-down of about 30 percent for three straight sessions from Monday through Wednesday.
The company disclosed on Monday that TG-C, a cell and gene therapy for knee osteoarthritis, missed both co-primary endpoints in its U.S. Phase 3 trial. Pain relief and joint function improved among patients who received the drug, but not by a statistically significant margin over placebo.
Analysts pinned the miss on the placebo arm rather than the drug itself.
"This failure stems not from a lack of efficacy in TG-C but from an unexpectedly strong placebo effect," said Wi Hae-joo, an analyst at Korea Investment & Securities, cutting the brokerage's rating to neutral from buy.
The firm also lowered its assumptions for trial success probability and U.S. market share.
A second U.S. Phase 3 study, coded 12301, is due to report in October, and the company is weighing whether an elevated placebo response skewed the first readout. Wi said the pain reduction seen in the treated arm mirrored earlier Phase 2 results, leaving room for success in the second trial if the placebo effect proves less pronounced.
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