[FOCUS] Distrust caused by pharmaceutical and bio companies

Financial authorities again cut the disclosure of pharmaceutical and bio companies.

 

The Korea Exchange prepared the 'Inclusive Disclosure Guidelines for Pharmaceuticals and Bio-Industry' and recommended that specific disclosure cases be followed and followed in accordance with industry characteristics.

 

The intention is to encourage investors to provide detailed information on important management matters in order to make reasonable investment decisions.

 

In detail, listed companies should disclose the facts and results of their application for a clinical trial plan.

 

Even if a previously approved clinical trial plan has changed, it needs to be disclosed.

 

Even when the trial is suspended or terminated, companies should be informed in detail.

 

The facts and results of companies applying for an authorization for a new drug under development are also included in the important information.

 

The release of a drug with a certain sales volume is also subject to disclosure.

 

This is not the first time financial authorities have proposed disclosure standards for pharmaceutical and bio companies.

 

In 2018, the Financial Supervisory Service inspected the business reports of pharmaceutical and bio companies, and as a result, the disclosure of important information and risks was insufficient.

 

At the time, the Financial Supervisory Service recommended the detailed disclosure of major management contracts and R&D activities.

 

Since then, pharmaceutical and bio companies have begun to disclose the progress of technology transfer projects, R&D personnel, and government subsidies in a unified form.

 

The reason why financial authorities continue to question the disclosure of pharmaceutical and bio companies is investor protection.

 

The company's activities are not being delivered to investors.

 

In fact, suspicions have long been raised that pharmaceutical and bio companies only provide limited information on stock prices.

 

Hundreds of clinical trials are initiated each year with the approval of the Food and Drug Administration.

 

It was hard to find cases of voluntary disclosure of clinical trial discontinuation or failure.

 

Considering the fact that the success rate of new drug development is less than 10%, doubts were raised that pharmaceutical companies conceal unfavorable information on stock prices.

 

Although overseas, many pharmaceutical and bio companies preemptively disclosed unfavorable cases such as clinical discontinuance or abandonment of license application, the atmosphere was quite different in Korea.

 

There was a lot of talk about the issue of ambiguous clinical trial results on bio companies.

 

In many cases, they reported failures in key clinical trials, and then added conditions to confuse investors in a 'virtual success' manner.

 

In introducing the results of clinical trials, there were many cases where unfamiliar words such as 'usefulness' and 'uselessness' were disclosed.

 

The ambiguity was repeated, "The first goal failed, but the second goal was achieved".

 

The article about a meeting with a regulatory officer who is not involved in the success of the trial or marketing authorization can be mistaken as if it were a great success.

 

Even with the results of the same clinical trial, the stocks were fluctuating as the interpretations were mixed.

 

After recording the lower limit, a few days later, it went back to the upper limit, and the jagged steps continued.

 

At this point, I would like to ask what are the goals of drug development.

 

It is the ultimate goal of new drug development to develop and supply innovative medicines to patients.

 

Even with the approval of foreign regulators, we cannot guarantee how much sales will actually occur.

 

Even if they haven't entered the license application step, it's hard to argue success with just one or two indicators.

 

The financial authorities are also introducing the disclosure standard, the success of new drug development is determined by the regulatory agency's marketing authorization based on the results of clinical trials.

 

Financial authorities pointed out that it is not advisable to announce the results of an intermediate trial as a clinical trial success.

 

Unfortunately, Korea has never produced a success story on the global stage yet.

 

In the future, it is likely that there will be more failure cases than probability.

 

Indeed, the fact that financial authorities are providing pharmaceutical and bio companies with detailed disclosure standards and best practices for new drug development is a sign of great distrust.

 

Some companies may complain that the government is trying to intervene in too little detail.

 

However, the distrust of domestic pharmaceutical and bio companies has caused themselves.

 

Developing new drugs with funds from investors is a duty to provide investors with clear information.

 

If it was intended to mislead investors, it should not have been invested in the first place.