"Stopping Inflated Disclosures" Financial Supervisory Service to Hold Briefings on Improved Pharmaceutical and Biotech Disclosure Guidelines

Four Briefings to Be Held in September, Each for a Different Participant Group

The Financial Supervisory Service announced on August 24 that it will hold four briefing sessions next month to ensure the smooth implementation of improved guidelines that require pharmaceutical and biotechnology companies to disclose objective grounds for clinical trial success rates and past development records.

The briefing sessions will be held on September 1 for KOSDAQ-listed companies (by KOSDAQ Association), September 8 for underwriters (at the Korea Institute of Financial Investment), September 15 for pre-IPO companies (at the Korea Institute of Financial Investment), and September 21 for KOSPI-listed companies (at the 2nd floor auditorium of the Financial Supervisory Service). During each session, the background and key improvements of the comprehensive pharmaceutical and biotechnology disclosure improvement plan will be introduced, as well as specific writing methods and important notes to help companies faithfully apply these standards to their disclosure work.

The comprehensive improvement plan for pharmaceutical and biotechnology disclosures, which was released last month, requires companies in these sectors to provide detailed grounds for public offering price calculations during the initial public offering (IPO) process and to transparently release information on research and development (R&D) status and product development history. The main goal is to prevent so-called 'inflated disclosures' and curb the practice of luring investors with rosy promotional phrases about 'dream new drugs.'

The Financial Supervisory Service stated that it will provide thorough guidance through these briefing sessions to ensure that pharmaceutical and biotechnology companies fully understand the improved disclosure standards. Furthermore, by preventing the submission of incomplete disclosure documents, the agency aims to minimize the work burden and funding schedule delays caused by correction requests by explaining each guideline item in detail.

Regarding fundraising, the agency will present detailed standards for core assumptions used when calculating public offering prices, thereby minimizing trial and error during the preparation of securities registration statements. Additionally, it plans to provide concrete methods for applying the newly introduced disclosure standards, so that companies can continue to deliver consistent and faithful information to investors even after listing.

Companies and disclosure officers wishing to attend in person may register for each session through the respective organizing association. The related disclosure guidelines introduced at the briefing sessions will also be posted on the Financial Supervisory Service website, so that companies can use them in their disclosure work.

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