|
Market Manipulation Especially Harmful to Biotech Companies
By Ellen Dadisman
BIO sent a letter to SEC Chairman Christopher Cox and SEC Director Linda Thomsen in September commending the agency for its efforts to investigate fraud and crack down on activities such as rumor mongering and abusive naked short selling in capital markets.
"This type of illegal behavior is especially detrimental to emerging biotechnology companies whose value is so dependent on the results of their research and development efforts," said Alan Eisenberg, executive vice president for BIO's Emerging Companies and Business Development Section. "The peddling of false rumors regarding the results of clinical trials could substantially drive down a biotechnology company's stock price. Given the resource intensive nature of our industry and its dependency on capital markets, these illegal activities can be particularly damaging to our companies' efforts to gather investment."
Eisenberg also said that BIO "looks forward to working with the agency during the regulatory rulemaking process to ensure that securities of all public companies, including the biotechnology industry, are protected."
The vast majority of biotech companies are in the research and development phase of bringing medical therapies through clinical trials so that they can become available to patients. Because biotech innovations have an especially long and expensive road from the lab to the patient - up to $1 billion over 10 years -- the current turmoil in global financial markets has rendered them especially vulnerable to failure.
The letter also urged the SEC to issue proposed rulemaking that would provide adequate disclosures of short positions to the SEC and to the public. BIO believes that such an initiative would increase transparency in short selling and encourage investor confidence in the financial markets.
See the full text of the letter at http://bio.org/letters/SECsupportletter92208.pdf.
Ellen Dadisman is managing director of communications at BIO.
| 
Printer Friendly
