Securities class actions are frequently brought against biotechnology companies, often based on alleged misrepresentations related to the new-drug approval process. As previously reported in The 10b-5 Daily, the Food and Drug Administration ("FDA") and the Securities and Exchange Commission ("SEC") have been in talks on how to coordinate on these disclosure issues.
Last week, the two agencies announced a series of new initiatives, including:
(1) A centralized procedure adopted by the FDA for referring to the SEC staff possible instances of securities laws violations by public companies regulated by the FDA.
(2) Identification of contacts in each of the FDA's main organizational components (known as Centers) to serve as points of contact for the SEC and its staff to use in requesting information from FDA. These individuals would be responsible for assuring that such requests are handled promptly and thoroughly.
(3) The continued sharing of non-public information by the FDA with the SEC, consistent with FDA’s current practice, and a commitment to endeavor to take steps to further expedite this process.
According to an article in the Boston Globe on the announcement, "some in Congress questioned whether the FDA and SEC were cooperating quickly enough. But in an interview yesterday, Representative James C. Greenwood, a Pennsylvania Republican whose committee oversees the FDA, said he was 'very impressed and encouraged' by the new steps." The FDA apparently does not plan to change its procedures on what information will be made public as part of the new-drug approval process.