Biotech CFO to Testify at House Field Hearing on Sarbanes-Oxley Reform
WASHINGTON, D.C. (June 16, 2006) – David Lawrence, chief financial officer of Acorda Therapeutics Inc., will testify Monday on behalf of the Biotechnology Industry Organization (BIO) at the House Government Reform Subcommittee on Regulatory Affairs field hearing regarding reform to Section 404 of the Sarbanes-Oxley Act of 2002.
The hearing is scheduled 10 a.m. Monday, June 19 at the U.S. Customs House, 1 Bowling Green, New York, 10004. The subject matter is “A Balancing Act: Cost, Compliance, and Competitiveness After Sarbanes-Oxley.”
Lawrence will testify that the one-size-fits-all approach to the internal reporting requirements (Section 404) of Sarbanes-Oxley is placing unnecessary, costly burdens on smaller public companies.
An estimated 30 percent to 40 percent of the increase in the biotechnology industry’s net loss in 2004 (the first year of compliance) was attributable to the cost of complying with the Sarbanes Oxley Act, according to an Ernst & Young annual biotechnology report. Net loss in 2004 was $4.3 billion, compared to $3.2 billion in 2003.
As stated by the subcommittee, the purpose of the hearing is to “examine the impact that the Security and Exchange Commission’s (SEC) implementation of the Sarbanes-Oxley Act has had on U.S. Stock Markets in terms of liquidity, competitiveness, and the overall health of the U.S. markets. The hearing will evaluate the net benefits of Section 404, included value added by Section 404 compliance for investors, as well as business.”
BIO seeks internal control requirements that are “scaled” to the size of product revenues and the complexity of corporate structures. BIO fully embraces the importance of good corporate governance and transparency, and seeks expeditious regulatory reform for Section 404.
BIO is encouraged by the SEC’s recent statement of its intent to review the cost burdens for small public companies associated with Section 404 compliance and to consider reforms. The SEC also indicated that it will seek input on the appropriate role of outside auditors in connection with the requirements of Section 404 in order to provide alternatives to current approaches. BIO considers these steps positive toward implementing Sarbanes-Oxley as Congress intended.
Sarbanes-Oxley, the corporate governance law, is regulated by the SEC.
Acorda Therapeutics® is a biotechnology company whose mission is to develop and market therapies to restore neurological function in people with spinal cord injury (SCI), multiple sclerosis (MS) and related conditions of the nervous system. Acorda’s marketed products include Zanaflex CapsulesTM (tizanidine hydrochloride). Zanaflex Capsules is a short-acting drug approved for the management of spasticity. For more information on the hearing Monday, visit the subcommittee’s website at http://reform.house.gov/RA/.
BIO represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and 31 other nations. BIO members are involved in the research and development of healthcare, agricultural, industrial and environmental biotechnology products.