The Korea Herald


KRX unveils detailed disclosure guidelines for biopharma firms

By Son Ji-hyoung

Published : Feb. 9, 2020 - 15:58

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South Korea’s financial authorities on Sunday unveiled a new set of guidelines on public disclosure of information for listed biopharma firms, in a move to ward off market uncertainty.

Clinical trial-stage pharmaceutical companies listed on the tech-heavy Kosdaq are required to disclose any significant progress in their business -- including each stage of clinical trials, from success to suspension or termination, approval or cancellation for drug production, distribution and sales, technology transfer, participation in state-led project and patent contract.

The guidelines also force drugmakers to inform investors of possibilities of failure in each phase of the trials.

While the previous guidelines relied on voluntary disclosures, there have been growing calls for more specific guidelines tailored to pharmaceutical and biotechnology sectors to encourage uniformity in disclosures for investor protection.

The new guidelines are meant to have “common standards for companies to faithfully disclose information and notify investors of risks,” the Financial Services Commission said in a statement.

The financial regulator added that the guidelines do not have a binding force, but those who fails to abide by them are subject to disciplinary action.

The nation’s sole bourse operator Korea Exchange (KRX) said it plans to hold presentations for Kosdaq-listed drug developers about the detailed guidelines in February.

Korean investors have been exposed to stock price volatility caused by drugmakers’ result announcement before gaining sales approval. In a high-profile clinical trial suspension of SillaJen’s liver cancer treatment Pexa-Vec last year, stock investors saw its stock valuation plummet by over 90 percent in six months as of September.

By Son Ji-hyoung (