Drug firms warned to be honest with investors

The US Securities and Exchange Commission (SEC) is concerned that too many pharmaceutical companies aren’t being sufficiently transparent with investors about their interactions with regulators at the US Food and Drug Administration (FDA).

During a speech at an industry conference, the director of the SEC’s enforcement division, Andrew Ceresney, stressed the importance of disclosure in financial reporting. ‘So much turns on those interactions, and not being straight with investors will have significant consequences,’ he warned.

Ceresney cited recent cases where the SEC has brought civil charges resulting in fines and sanctions against companies and their leaders. Examples include indicating a company’s intent to file for FDA approval while knowing the company can’t meet its stated deadlines, or falsely informing potential investors about schedules for clinical trials.