Here's an SEC lesson, courtesy TherapeuticsMD: Don't tell secrets to analysts

Pharma companies routinely update analysts, but a Securities and Exchange Commission (SEC) punishment for tiny TherapeuticsMD might offer a lesson—or reminder—for the rest of the industry.

The gist? Don't share important info with analysts without telling the public, too.

The SEC handed TherapeuticsMD a $200,000 fine for sharing "material" information with analysts on two separate occasions without disclosing the same info to the public. The company, which won three FDA approvals last year, agreed to pay the agency’s penalty but didn’t admit or deny the findings.  

The SEC claims Florida-based TherapeuticsMD "selectively shared material information" with analysts about its talks with the FDA in June 2017, when one of its drug candidates was up for review. The company allegedly sent messages to analysts saying an FDA meeting for TX-004HR had been "very positive and productive" but left the public in the dark.

The following month, the company put out a press release saying it had submitted additional information about the drug to the FDA, but it didn’t have a "clear path forward" for its application, the SEC said. The company’s stock dropped 16% before the market opened on the news. 

But after issuing the press release, TherapeuticsMD shared "previously undisclosed details" about the FDA meeting with analysts, the SEC says. The analysts published research notes, and the stock ended the day down just 6.6%, the agency says.  

Details about pharma companies’ interactions with the FDA "can be critical to investors," Carolyn Welshans, associate director of the SEC enforcement division, said in a statement. It’s "essential that when companies disseminate material, nonpublic information, they do so fairly and appropriately to all investors and not just a select few analysts," Welshans added. 

In the end, the back and forth with the FDA wasn't in vain. TX-004HR won approval in May 2018 to treat moderate to severe dyspareunia and launched under the brand name Imvexxy. It was one of several approvals for the company last year.  

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