The Securities Exchange Board of India (Sebi) has asked several pharma companies to submit the details on the public disclosures that influence the stock prices. This comes as several pharma stocks have seen sharp movements and Sebi wants to check if all the price-sensitive information was timely provided to the investors or not, according to a report by Economic Times (ET).
The details that need to be disclosed are new drugs, pending patents, source of raw materials, and new partnerships, among others. In several cases, SEBI has reportedly found that no disclosures were made at all.
“In one case, the queries were about a collaboration signed by a leading pharma company for distribution of Remdesivir – the drug that was used by doctors worldwide to treat the symptoms of Covid-19,” the ET report quoted a person aware of the matter as saying.
Experts have argued that in pharma companies, a small disclosure has the potential to influence wide movements in stock prices. These developments may include getting approval from the US Food and Drug Administration (USFDA).
In the case of life-saving drugs, the company must provide every detail like licensing or clinical trials, to the investors, the report quoted a legal expert as saying. For companies, these may not have a major impact on the financials but they may impact share prices.
However, the report also stated that the disclosures may at time conflict with the confidentiality clauses of the companies.
It was in 2017 that Sebi started to be tougher about disclosures with the companies. Some companies were found to be not disclosing details about the US FDA approvals. The exercise has been made swifter after the Covid-19 pandemic.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor