The federal government has charged a pharmaceutical company that makes women’s health drugs with violating disclosure rules.
The Securities and Exchange Commission said Tuesday that it had charged Boca Raton, Florida-based TherapeuticsMD with violating regulations that govern sharing of nonpublic information. In particular, the SEC alleged, the company selectively shared material information with sell-side analysts without also making it public.
The allegations in the order concern the dyspareunia drug Imvexxy (estradiol vaginal inserts), which previously went under the development name TX-004HR and was approved last May, and interactions between the company and sell-side research analysts that took place in June and July 2017.
The SEC noted that the company had consented to its order without admitting or denying the findings and was ordered to cease and desist from future violations of the rule in question, Regulation FD, as well as agreeing to pay a $200,000 penalty.
Shares of the company fell 6 percent on the Nasdaq Tuesday following the SEC’s announcement.
“We are pleased to have resolved the matter,” TherapeuticsMD vice president for investor relations Nichol Ochsner wrote in an email, adding that the company has revised policies and procedures related to public disclosure of information and enhanced relevant training. “With the settlement behind us, we look forward to continuing our mission of advancing the health of women and championing awareness of their healthcare issues.”
The SEC noted that at the time of the alleged information disclosure, the company did not have policies or procedures regarding Regulation FD compliance.
According to the agency, the day after a June 14, 2017 meeting with the Food and Drug Administration concerning a complete response letter it had received for its application for Imvexxy, the company allegedly informed at least six sell-side analysts that the meeting was “very positive and productive.” On June 16, 2017, shares of the company rose 19.4 percent, prompting an inquiry by the New York Stock Exchange about whether disclosure of material information might be affecting the price.
A month later, on July 17, TherapeuticsMD issued a press release stating that it had submitted additional information to the FDA, but did not have a clear path forward regarding its approval application for Imvexxy, and its shares fell 16 percent in pre-market trading. But the SEC alleges that in a call and emails to sell-side analysts after the press release was issued, the company again selectively shared undisclosed details about the June meeting and information it submitted to the FDA. The analysts then published research notes containing the details, and the company’s shares rebounded, closing down only 6.6 percent.
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