BIO Comments on Earnings Releases and Quarterly Reports
The Biotechnology Innovation Organization (BIO) responded to the SEC’s request for comments on the nature and timing of disclosures that reporting companies are required to provide in their quarterly reports. BIO believes that the current quarterly reporting framework places an unhealthy emphasis on meeting or exceeding short-term forecasts, which engenders an inefficient outlook on short-term results. Due to the lengthy timeline for potentially life-saving drug discovery, which averages 10-15 years, biotech companies and their investors would be better served by a less frequent (e.g. semiannual) reporting regime that prioritizes long-term value creation. Biotech companies have unique business models and would benefit from scaled disclosure whereby smaller reporting companies (SRCs) and emerging growth companies (EGCs) report on a less frequent (e.g. semiannual) basis while preserving the flexibility to adopt more frequent (e.g. quarterly) reporting as they advance toward commercial stage.