The eighth installment of Ropes & Gray's podcast series Non-binding Guidance looks at SEC disclosure issues for life sciences companies. In this episode, Ropes & Gray partners Kellie Combs and Emily Oldshue discuss when to disclose, how to frame the disclosure, and how the responses to both of these questions are informed by SEC enforcement actions and securities litigation, as well as their experience working with life sciences companies in various stages of development. Emily and Kellie will dive into how to craft SEC disclosures involving a variety of FDA regulatory issues, such as clinical trial results, adverse findings from regulatory audits and inspections, and FDA interactions that occur during review of a pending application or post-market.
Kellie Combs: Hi, I'm Kellie Combs, a partner in the life sciences regulatory and compliance practice group at Ropes & Gray, based in our Washington, D.C. office. Welcome to Non-binding Guidance, a podcast series from Ropes & Gray focused on current trends in FDA regulatory law, as well as other important developments affecting the life sciences industry. We have a special guest on our podcast today: my colleague Emily Oldshue, a partner in our strategic transactions group, who works in our Boston office. Much of Emily's practice is concentrated in the life sciences space, representing issuers and underwriters in capital markets transactions, and advising pharmaceutical and med device companies in M&A and ongoing corporate governance and public company reporting matters. Emily and I frequently work together to advise pharma and biotech companies, as well as underwriters, on how to craft SEC disclosures involving a variety of FDA regulatory issues, including clinical trial results, adverse findings from regulatory audits and inspections, and FDA interactions that occurred during review of a pending application or after a product is on the market. On today's episode, we'll be talking about SEC disclosure issues for life sciences companies, and in particular, how we think about when to disclose and how to frame the disclosure. Responses to these questions are informed by SEC enforcement actions and securities litigation, as well as some practical experience that we've both gained on the job. I'll turn first to Emily to give us some background and set the stage for the discussion.
Emily Oldshue: Thanks, Kellie. As you mentioned, this general topic comes up in a variety of contexts for our clients. Whether you're a pre-revenue, early-stage biotech looking to go public, or a large cap pharma company with $50 billion in revenue, figuring out what clinical updates and other business information would be material to an investor is a multi-faceted and fact-intensive analysis involving various internal company functions: legal, finance, R&D, clinical, regulatory, etc. The general standard for what needs to be disclosed sounds simple enough - companies are under no obligation to disclose information, unless failing to disclose the information renders other company disclosures misleading or there is an affirmative duty to disclose the information under securities laws or exchange listing rules (e.g., in connection with an offering or when filing a periodic report). But as soon as you pause on the standard, the questions start:
What information is material to investors, and therefore subject to disclosure when an affirmative obligation to disclose exists? This would have been...