In March 2013, a journalist for The RPM Report (subscription required) wrote that the U.S. Food and Drug Administration (FDA) had held a “late cycle” review meeting with a drug candidate sponsor. The meeting – an element of the 2012 Prescription Drug User Fee Act-V – introduced a new formalization of communication between the FDA and sponsors, and hailed a new investor relations dilemma for companies: Should “sponsors” disclose what is discussed in these late cycle meetings with the agency, or not?
Late cycle review meetings are a change from past FDA practice; previously the agency engaged in less formal, ongoing communications. Formality might be a good administrative move by the FDA. The agency will now more clearly state what page it’s on, rather than making the sponsor figure out the scenario via a stream of communications over several months.
Late cycle review meetings still have limitations, however. While these meetings will help companies know if it’s a wise decision to invest in marketing, sales, product launch materials, or inventory, no final agency decision is provided. Furthermore, the brand-new process is a little bit too new to know how it will evolve as a step in the drug approval protocol. Thus, a lot of related investor relations decisions for companies may depend on guidance from internal corporate counsel or external legal firms – much as is the case when a company/sponsor files an NDA or BLA. Some companies just announce the filing, while others announce the application and the agency’s acceptance (if it happens). Still other companies just announce the acceptance.
As an industry, we need more clarity on how the FDA and sponsors are handling these new practices. Some companies have an internal philosophy to release as much “news flow” as possible, and thus might choose to announce content or discussion points from a late cycle meeting. However, there is a real downside to issuing too many releases about immaterial events in that it can cause your investor audiences to ignore what you send when you do have something material to share.
Our inclination is to advise companies not to announce anything from a late-cycle meeting. At the meeting, the FDA doesn’t provide an official decision. You may discuss a lot of topics, the agency may tell you the direction it’s going, but it won’t provide you with a final decision as to whether or not your drug candidate will be approved. Until you have the final decision in hand, it is risky to share too much information as it is still subject to change.
At Westwicke, we can help you keep your disclosures material and realistic. Contact us for more strategic information that can help with your IR decision making, and sign up for our newsletter to learn more about this and other IR-related topics.