Two Kolon Life Science executives were acquitted Friday of involvement in the company's allegedly fraudulent report on a key ingredient in its gene therapy drug.

The Seoul Central District Court handed down the ruling to the drugmaker's two executives, surnamed Cho and Kim, who were indicted on charges that included fraud related to the company's suspected illegalities in the development and sales of Invossa, a cell and gene therapy for osteoarthritis.

But the court separately ordered Cho, a senior director at the company's clinical development team, to pay a fine of 5 million won ($4,500) for bribing an official at the Ministry of Food and Drug Safety in seeking favors in the company's drug development process.

They were suspected of having been involved in submitting fraudulent documents on purpose to the ministry to get approval for Invossa.

While acknowledging that the company submitted some false data, the court said the ministry seemed to have failed to perform due diligence in verifying the submitted documents.

The court also found them not guilty of fraud and other charges for having received a state subsidy of 8.2 billion won based on allegedly fraudulent documents.

Kolon Life Science, a unit of Kolon Group, initially received the approval for Invossa in 2017. But it was revoked in May 2019 after it was revealed that a key material used in Invossa came from a kidney cell, instead of from cartilage as stated in the document submitted for approval.

The company acknowledged that a substance in the joint pain treatment drug had been mislabeled, but claimed no one has suffered from any medical complications from the drug use.

Later in the day, however, the Seoul Administrative Court ruled against the drugmaker, dismissing its plea to reinstate the license for Invossa.

Having submitted false data was "a grave fault as drugs can have a significant effect on people's lives and health," the court said, even though it was hard to confirm with the evidence presented that the company intentionally committed any wrongdoing.

"There is no illegality with the ministry's decision to revoke the license since it did not seem to be aware of data that could raise suspicions about the drug's safety," the court ruled. (Yonhap)