The U.S. Securities and Exchange Commission's top enforcement chief warned on Tuesday that too many pharmaceutical companies are failing to accurately portray their dealings with federal drug regulators - a problem that could get them in trouble.
Andrew Ceresney, the SEC's enforcement director, said the agency has seen a lot of problems with disclosures by pharmaceutical companies, including on 8-Ks - a form companies file when they need to disclose an event that is "material" to their business.
"One significant type of key event that we see causing problems with disclosure in your industry is disclosures on your dealings with the (Food and Drug Administration)," Ceresney said in prepared remarks at a conference held by the Annual Pharmaceutical Compliance Congress.
"Accuracy of reporting in your dealings with the FDA is critical to getting investors the information they need. FDA dealings and approvals are the lifeblood of your business and are so important to investment decisions," he added.
Ceresney said the SEC has taken a number of enforcement actions in recent years against companies for problematic disclosures tied to FDA approvals.
One case involved executives at the biopharmaceutical company Immunosyn Corporation [IMYN.PK]. The SEC alleged that executives mislead investors about the regulatory status of the company's goat blood-derived drug.
Another case, he said, was brought against Imaging3 Inc and its chief executive officer for misleading investors in a conference call about FDA approval for its medical scanner.
The SEC alleged that the FDA had denied the device several times, and even called some of the images useless, but that the CEO downplayed these concerns when investors asked questions on a call.
The company later settled with the SEC and agreed to take certain remedial steps.
"The message from these cases is that you need to be completely accurate in recounting your dealings with the FDA," Ceresney said. "So much turns on those interactions and not being straight with investors will have significant consequences."
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