Medipost shares narrowed losses Tuesday after the company said it will look for a new local partner to push for the entry of its knee cartilage defect drug into China.

The announcement comes after the Korean stem cell medication developer on Monday cancelled a joint venture agreement with Shandong Orlife Pharmaceutical Co. for delayed efforts to seek regulatory approval in China.

The two signed the JV agreement in 2014 to jointly develop and sell the stem cell drug Cartistem in China, but the Chinese partner failed to fulfill its obligations to get authorization by a planned deadline, according to Medipost.

Cartistem is a drug based on allogeneic umbilical cord blood derived mesenchymal stem cells and it is indicated to treat knee cartilage defects due to degenerative osteoarthritis or repeated trauma.

Medipost said it had continuously urged the local partner to perform the contract, but the partner did not comply with its obligations. The company will select a new partner as soon as possible to get the plan on track.

Shares of Kosdaq-listed Medipost closed Tuesday flat at 29,900 won ($25.99).

By Park Yoon-gyun and Minu Kim

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]