[비즈한국] Disclosure regulations in the biotech industry are expected to expand beyond listing registration statements and periodic/adhoc disclosures to include standards for press releases and external communications. As the Korea Exchange (KRX) recently issued a notice designating Samchundang Pharm000250 as an unfaithful disclosure corporation, the issue of the format and timing for biotech companies to communicate information that could affect investment decisions has become a focal point once again.
On March 31, the Korea Exchange issued a notice designating Samchundang Pharm as an unfaithful disclosure corporation due to its "failure to fulfill fair disclosure requirements regarding forecasts or predictions of business performance." The exchange determined that Samchundang Pharm distributed press releases regarding business performance on February 6 without making the corresponding proper disclosures. The deadline for deciding whether to designate the company as an unfaithful disclosure corporation is April 23. It is noted that Samchundang Pharm has accumulated zero penalty points related to unfaithful disclosures over the past year.
This matter is serving as a catalyst for discussions that go beyond sanctions on an individual company to the information provision methods of the entire biotech industry. The Financial Supervisory Service (FSS) recently formed a 'Biotech Disclosure Improvement Task Force' and began a comprehensive revision of disclosure guidelines for biotech companies. It is reported that the task force includes not only internal FSS personnel but also external experts such as biotech analysts from securities firms, clinical trial professors, and market experts.
The scope of the revision is extensive, ranging from securities registration statements during the listing review stage to periodic and ad-hoc disclosure formats. Measures are being considered to further specify the documentation of key assumptions, such as market size, the probability of clinical success, regulatory uncertainty, and the possibility of development delays, which serve as the basis for calculating offering prices. For already listed companies, the revision is also discussing the supplementation of guidelines for describing major business contracts and R&D activities, as well as comprehensive disclosure guidelines.
In particular, there is a high possibility that standards for press releases will be revised separately in this discussion. According to related reports, the FSS task force is considering ways to categorize information that could affect investment decisions—such as clinical trials, technology transfers, market and revenue forecasts, and regulatory reviews—to specify what expressions should be avoided and what premises and uncertainties must be disclosed alongside them.
This is not the first time that disclosure standards for the biotech industry have been established. The Financial Services Commission (FSC) and the Korea Exchange previously issued 'Guidelines for Enhancing Disclosure Transparency of KOSDAQ Pharmaceutical and Biotech Companies' in 2020. At the time, the focus was on improving disclosure quality through guidance tailored to the characteristics of the pharmaceutical and biotech industries, allowing investors to identify investment risks more clearly. This round of revision discussions can be seen as an effort to expand that scope to include listing documents, periodic/adhoc disclosures, and the realm of press releases.
The focus of this institutional overhaul is on the level and content of information that biotech companies must explain when communicating through different channels such as disclosures, press releases, and IR. Driven by the Samchundang Pharm case, efforts to re-examine the overall disclosure credibility, investor protection, and IR practices within the biotech industry appear to be gaining momentum.