Seamoss -- Thanks for the terrific article
I have read other discussions of the SEC disclosure rules, but never one like this focused on the biotech industry. Thank you so much.
From my quick reading of the article just now, I would highlight one other statement (found on page 42) where the Court in the Biogen case said:
“absent a misleading prior disclosure, there is no duty to disclose internal business strategy.”
Stuff like overseas clinical trial programs and possible collaborations with Duke or the Gates Foundation or SRI or NIAID clearly fall (at this early stage) in the category of “internal business strategies” that we investors would love to know about but have no legal right to know.
I would make one other global remark about this article. It reveals how much of the biotech game is being played these days in the arena of “forward looking statements.” The article points out how the new “forward looking” disclosure rule, adopted in 1978, has given biotech executives a large “safe harbor” to pump their story between solid clinical announcements. I think it is an excellent sign that PPHM management has not felt the need to engage in this game.
SK believes the solid clinical PRs, albeit spread apart by many months of silence, ought to be exciting enough to sustain the stock price. There are dozens of announcements the Company could have made, e.g. more PRs releasing preclinical Bavi data. I read SK’s decision not to play the monthly PR game as a sign of confidence in the fundamentals of his program.
When you have got the goods, and when you’ve said enough to comply with the SEC’s ground floor disclosure rules, silence is a good thing:
1. It distinguishes you from the crowd of companies begging for attention. A conservative, low-profile PR policy has sex appeal for large investors.
2. It allows friendly, long-term supporters/institutions to acquire a sizeable position at a relatively low entry price.
3. By not shouting “Look at me,” SK postpones the day competitors start developing their own versions of Bavi’s MOA.
