Like the superheroes in the Hall of Justice pledging to stand by one another, the SEC and FDA have finally come together and agreed to cooperate better in investigating claims made by biotech/pharma companies about their dealings with regulators. Ever since the incident in 2002 regarding Sam Waksal's sale of shares of Imclone right before it was announced that the FDA would likely not approve its drug (which also lead to the Martha Stewart trial for obstruction of justice).
This is my favorite quote from the article the talks about the recent meeting in which the SEC and FDA announced their new alliance:
Some executives at the session said they weren't pleased by the extra work taken on by the FDA.
''It amazes me that people at the FDA have time to read securities filings," said one executive, who asked not to be named.
At least he had the good sense to ask not to be named.
Are you trying to dare the FDA to read your securities filings, now? And the FDA probably really doesn't have time to read the securities filings, but rather than grouse about it, why don't you try to work within your industry to get everyone to be more honest? (and, anyway, it seems like the FDA likely will not be reading filings, but will be scanning through press releases)
Every public company now, biotech or not, feels tremendous pressure to perform from quarter to quarter, but having another pair of eyes that can catch any half-truths shouldn't be begrudged in the industry. If anything, executives should at least be publicly lauding the efforts, to ferret out those who drag the industry down with false or shady filings.
Other than that, I guess this serves as a warning to everyone to make sure your communication folks are in-line with what the regulatory and medical officers can say with a straight face. The last thing you need is to have to explain to the SEC and the FDA that, "well, gee, that's not quite what we meant in this press release," and have it blown up into an even bigger deal than it likely was in the first place.
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