Pharma investors concerned over hidden clinical trial results

Pharmaceutical companies risk losing the trust of potential investors and partners unless they make all clinical trial results public as required by law, an industry expert argues.


Writing in the trade publication Pink Sheet, Thomas Wicks from TrialScope notes that while ‘Big Pharma’ has achieved a strong legal compliance record overall, many medium-sized and smaller companies still violate the FDA Amendments Act, a transparency law passed with overwhelming bipartisan support in 2007.


Smaller companies are far less likely to make their trial results public as required by law, as the chart below shows.

Chart originally published in Pink Sheet, based on TrialScope’s analysis of February 2021 FDAAA Trials Tracker data


Citing market analysts, Wicks argues that missing clinical trial results can raise red flags for potential investors and partners:

  • Much of a biotech company’s value depends on its R&D pipeline, so lack of transparency about the outcome of past trials generates uncertainly and therefore risk for potential investors

  • Missing trial results frequently set off alarm bells during regulatory due diligence assessments

  • If and when the FDA finally begins enforcing the law, companies will face a stiff fine of $12,316 per day for each trial result that is overdue


Wicks notes that in Europe, some regulators are already starting to take action.


“Reports from sponsors indicate that some health authorities in the European Union have started to review results disclosure compliance on [the European trial registry] EudraCT as part of pharmacovigilance inspections.”


The EU Clinical Trial Regulation, which comes into force at the end of this year, obliges all member states to establish and enforce penalties for non-compliance.


Investor concerns about the risks posed by hidden clinical trial results are not new.


In 2015, a coalition of 85 pension funds and asset managers representing more than €3.5 trillion in assets called on pharmaceutical companies to set out their plans to make all of their clinical trial results public. At the time, a Financial Times editorial concluded that “clinical openness reduces risk and increases investor confidence. Open data will benefit all, from patients to shareholders.”


Thomas Wicks' full article is available on the Pink Sheet website.


A second article by the same author, also in Pink Sheet, describes the challenges that industry faces in meeting disclosure requirements. Extract:


"A further difficulty is ensuring consistent public dissemination of information when every registry has unique data and local language requirements. In organizations without a central disclosure function, each affiliate, partner, or CRO makes editorial decisions to conform the data to the local registry standards. However, without a coordinated editorial approach, the data made public may be inconsistent. This lack of harmonization can raise questions from industry critics when, for example, one registry shows a different set of secondary outcomes or provides an inconsistent view of adverse events."









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