Navigating Clinical Data: Disclosure, Financing, and other Practice Considerations Lunch and Learn, 2024
How can companies strategically share new data without crossing into insider trading territory? This Lunch & Learn tackled this critical questions, offering info on navigating complex regulatory requirements.
Topics Covered: Data Analysis, Information Disclosure, Insider Trading, Regulatory Compliance,
Conference Overall Ratings: Venue (5/5) - Food (5/5) - Speaker Content (3.5/5) - Networking Opportunity (2/5) - Likeliness to Return (3.5/5) —- more details below
Initial Conference Thoughts - Why Attend? This event was offering lunch, an easy commute downtown, a place I’d never been before, and related to finance. Of course it was a great decision to attend 😁
Photo Collage & Commentary
Notes from Conference—
They did start exactly on time (I was only a minute or two late). This made me realize for “lunch and learn” maybe arrive 10 minutes early, so if it does start on time, you have a chance to serve yourself food non-disruptively. There were only 8 people attending this event besides me, with the four panelists.
When and What to Do With Data
When data comes in, you’re the first to see it. You must document everything.
Come up with the choreography ahead of time. What order does everyone see it (and what do you do if someone is out of town, etc).
Who sees it first? Who do they show it to next? How do you share this information with everyone? That way you’re doing a fire drill before the fire.
This can allow you to leverage the others on your team to build out shell content. They can work through Q&A,
If you’re going to talk, you need to be accurate.
Be really clear on when you will disclose data with your investors and the street so that everyone won’t be bugging you and trying to read your body language. Give them a time period to expect announcements by, then say “as we stated, we’re announcing this on ____(date)___”
The Ethics of Comparing Data
Sometimes companies and investor relations teams like to compare data of competitors.
You need to be careful here with clinical trials. You can not compare the two if they were not a direct comparison trial.
You have to be careful with this even though others may not…
Investors and Wall Street do this… they often break the rules and compare companies’ results even though these comparisons don’t necessarily cover the same information.
FINRA is not a fan of people sharing this kind of inaccurate information.
If this is something you are getting pressure to do at your work, be sure to closely align with regulatory advisors and requirements for FDA approval
You have to be careful with this even though others may not….
It’s not just the FDA and FINRA, the SEC also doesn’t favor these types of comparisons.
The SEC wil comment in this area, especially if you have a large company.
It’s best to discusss competitors data separate from your own, or clearly state the differences in the information .
Non-Public Information Data
Employees in possession of the nonpublic data can not trade
Create records sot hat if people want proof of your data sharing history, you can provide it late for investigations.
Keep the group of employees “in the know” as small as possible. Just to protect as many people as possible.
Get them trained on insider training knowledge.
Put them in an email group so you can let hem know the blackout periods to prevent leaks and insider trading.
Data sharing is often on a rolling basis
Sometimes the CEO is left out of meetings, but usually this still doesn’t really prevent a black out period in the SEC’s eyes.
Let people know when they have NPI
Make it very clear and intentional on how you decide to disclose data. Build up an internal plan of how you disclose data.
Timing Announcements with Required Reports
CEOs and board members talk all the time at events. This is a great chance to make announcements, though often times the events and other conditions make these announcements tough to give. Even illegal in some cases.
Rules apply to public companies that don’t apply to private companies.
Annual and quarterly reports are often reqiured companies.
It can be tough if you want to announcements something at a conference, you often need to get help from external councils on timing and ask the event leaders if they have any rules against this as well.
Some companies like to make big announcements at big events so that they get the biggest bang for their buck.
If you don’t announce things but you’re suspected to have information, analysts and investors will really try to read your body language or trap you in questions.
Your conference may say you need to announce info alongside the themes of their event. Alongside the conference’s structure.
Public companies can not selectively disclose data.
Info Affecting the Stock Price
Will the info you’ve learned affect the stock?
You must put out releases and data
Understand exactly when data will be public for investors to act on it.
Generally you don’t want to put out a report during stock market hours. Usually you do these before or after market hours, you don’t want to directly affect the price.
If you must release it during these times, work with a legal team. Probably this will haul your stock and get attention from the SEC.
If you are using an 8K to provide info, you must do this carefully.
If you are planning to do a public offering due to good data, what must you put out publicly, and in what order? There are a few options.
You may offer the shares publicly
You may do a direct transfer offering
Different strategies allow you to figure out if people are interested in different orders.
Things are best when everyone aligns on data and information, avoiding any surprises when public info comes out.
The amount of due diligence that investors do on public companies is often much lower than private companies. often people eel more trust in blue companies since they always put everything out there, they assume it’s more trustworthy.
With a private company, people want to look more closely to figure out what’s really goin on before they put their money into it.
If you have a safety issue, your stock may drop and this will lead to a FINRA issue. Then you’re opening yourself up to FINRA.
Whether it’s sales or clinical data, it’s all material information that can move the stock price.
Gray Areas in Clinical Trials
Sometimes trials can be a little grey. Maybe you’re still not sure if something works… so you’re not sure if it’s solid information yet.
You need to do more experimenting before draining conclusions.
Clinical trials with meaningful information for investors must be shared. That is classified as information for investors.
Liability increases as you have more information, but it all depends on context.
Sometimes you find questions that legal can’t answer on their own.
You must bring in scientists or other professionals to get the right answers.
When you see data that is significant you must close the trading window.
The executive team needs to be out of trading for a bit.
Many companies have ongoing AMT Offerings (at the money offerings. But you can not do this if you have undisclosed publicly available information. Your finance team can not allow an ATM in this situation.
Data Management
You have to understand the data well to speak to it well.
Treat things with timely attention, but not rushed.
Do you have enough data? Is it enough to tell one way or the other on something? Sometimes it’s hard to determine definitely.
You’ve got to talk with experts to see what you already know and understand, then see what this new information provides.
How will investors react to this new data?
What key data are investors looking at?
If you have patient die in a clinical trial, for example, you’ve got to get this info out quickly and accurately.
Keep accurate data on who knows what and when.
It can be useful to take on legal counsel a year or two before you plan to IPO or make a big change, though most people don’t do this.
Your lawyer doesn’t have to know how to do everything, but it’s good to talk to someone with expertise.
Map out your conferences, data flow, required filings, and required reports. Time things accordingly. Release some of the time pressure.
Have frequent check-ins with clients just to see what they’re working on.
Travel Route -
Without a car, how do you get to these events? Is it easy or tough?
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Taking the bus to the lite rail station nearby (I could walk there, but didn’t feel like it. It comes ever 20 minutes and takes about 5 minutes to arrive… walking takes just about the same)
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Ride a few stations to downtown Westlake. Funny enough, this location was like 3 blocks from Westlake and 1.5 blocks from Symphony.. but seems just walking from Westllake was quicker. I bet people wish they could go back in time and move some of those stations around… maybe one closer to SLU or something.
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Walk to the offices. Funny enough, this location was like 3 blocks from Westlake Station but only 1.5 blocks from Symphony Station (the station after)… seems just walking from Westlake was quicker. I bet people wish they could go back in time and move some of those stations around (Symphony station is so unnecessary IMO, the more I go downtown). I wish it could magically be moved closer to SLU or something more useful.
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Navigate inside the building. It was a very fancy/luxury/classy building in the financial district of downtown, so there was a lobby and special elevators to travel up with plenty of security.
Conference “Overall Rating” Further Elaboration:
VENUE - 5/5
Allow Me to Elaborate: : This place was great. I didn’t realize it was in an office building/office conference room. But that was kind of fun. The room was nice and the vibe was nice, no complaints. Also, they let me borrow a meeting room for a meeting after, so it was very wonderful.
FOOD - 5/5
Allow me to Elaborate: The food was incredibly fantastic. It was two salad choices, chicken, and lots of veggies. The flavor was so great and there was plenty of food. For drinks they just offered canned random drinks - including Liquid Death water! LOL so that was fun too. I loved this food.
SPEAKER CONTENT - 3.5/5
Room for Improvement: The content was very concentrated in this industry. It was on a topic I’m pretty familiar with, given my obsession with the Bed Bath and Beyond bankruptcy. So it was really interesting to learn more about things like blackout periods, insider trading, etc. I loved how easy a lot of it was to understand, but the speech/conversation itself was just a little bland/nonstop info/unengaging… though I loved the panel setup and thought everyone had interesting things to add. I’d suggest they add more Q&A time throughout - or even a break halfway through perhaps. But, at the same time, it was a pretty open feel.
NETWORKING OPPORTUNITIES - 2/5
Room for Improvement: This event was over faster than it started (though you could have stayed behind to chat.). It started on time, if not early, and there was not intentional work for people to meet. However, some people did chat after.
LIKELINESS TO RETURN - 3.5/5
Room for Improvement: Events like this are so great to attend. You learn a lot, get lunch… at the same time, I am not sure if I want to make a big impression on this company or anything. It was a niche industry (data in healthcare trials)… at the same time, this info was great and I’d be happy to learn more. So we’ll see.
Kelly’s Remaining Questions:
What does this company do (the one where we were at?)?
What exactly do the people attending this conference do for work?
What companies do I know that they have worked with?
Have they had situations where they experienced insider trading?
What do they think about the entire financial system at the moment? What changes would they like to see?
What’s their opinion on the current norms and ethics of insider trading - could it be revaluated or reformed?
Until next time, I wish you the motivation and success to search for opportunities around your area. Search and explore: Who is out there giving talks? There are new things happening all of the time.
Find relatable or interesting topics you like and check them out! Maybe even something hosted at a cool venue, if there’s no other reason to go. Let’s see what you can learn and discover not too far from home. 😊
