This document is addressed to listed biotech companies undertaking clinical trials, especially those with a limited pipeline of product candidates and no or a limited number of commercial products.
The aim is to assist those companies, especially newly listed ones (with potentially limited experience), in respecting inside information disclosure requirements and preventing market abuse infringements. Given the specific nature of their activities (scientific developments with multidimensional clinical trial results; gradual, stepwise processes; judgements to be made from a scientific and clinical perspective), compliance with those requirements may be particularly challenging for biotech companies, specifically with regard to when and what to disclose.
This document has been circulated for consultation with a selected group of experts.
The document focuses on:
- the disclosure of inside information during the conduct of the clinical trials. Disclosures regarding post-authorisation issues (such as inspections and reimbursement) are not covered;
- certain specific topics. This document does not replace or extensively repeat the market abuse legislation and disclosure rules or ESMA guidance.
Structure, content and nature
The document summarizes the general legal requirements and contains considerations and good practices (numbered respectively as [C-x] and [GP-x]).
Certain considerations (such as opinions of the FSMA about what information can be considered inside information and at what probability) and good practices (such as opinions of the FSMA about relevant disclosures to include in press releases) may create the impression that the FSMA wishes to prescribe when and what biotech companies should disclose. However, the FSMA certainly has no intention to push towards premature or unnecessarily detailed disclosures.
Without prejudice to the requirement of providing timely and accurate information to investors in accordance with the applicable legislation, the FSMA acknowledges:
- that the assessment of when and what to disclose will significantly depend on the specific facts and circumstances of each case, with judgements to be made from a scientific and clinical perspective;
- that there should be sufficient flexibility to strike an appropriate balance (not too fast but also not too slow, not too much but also not too little), taking into account other legitimate interests.
Instead, the principal aim of the FSMA is to invite biotech companies to take an analytical and sufficiently reasoned approach, at all times, to assessing when and what to disclose.
Although this document cannot capture the specificities of each case, the FSMA believes that including specific considerations and good practices (derived from observations on how different biotech companies are already communicating) provides useful insights that can help (other) biotech companies analyse and decide on the appropriate timing and content of disclosure in their particular case, and prevent them from overlooking elements that might be important.
All views expressed by the FSMA in this document are based on the assumption that the materiality test was positive. Whether information is material is a matter of judgment that depends on the specific facts and circumstances of each case. For conceptual purposes, we consider in this document that the information at the disposal of the issuer relates to a product candidate that has a significant revenue potential, taking into account the expected likelihood for and the timing of a potential marketing authorisation. However, it should be remembered that this document cannot capture the specificities of each case, and information may also be considered material in other situations not covered here, or because of other considerations not mentioned in this document.
Responsibility of the issuer
The issuer bears sole responsibility for identifying what information is material and when inside information comes into existence (see Part I), deciding whether to disclose immediately or to delay disclosure if immediate disclosure would prejudice the issuer’s legitimate interests (see Part II), and determining what disclosures are required to properly inform the investors (see Part III).
Legislation and circulars
The legislation and circulars regarding market abuse and disclosure obligations for listed companies can be consulted on the website of the FSMA.
The UK BioIndustry Association has published the guide 'Best practice for communicating R&D progress to investors and the public', which is available via http://bia.me/RDcommsguide.