TherapeuticsMD Inc. agreed to pay $200,000 to settle U.S. SEC charges that it improperly shared certain details regarding a drug approval application with equity research analysts.
In an Aug. 20 news release, the SEC said TheapeuticsMD violated Regulation FD as it shared material, nonpublic information with the research analysts but did not share it with the general public.
The SEC stated that the Boca Raton, Fla.-based pharmaceutical company on June 15, 2017, sent private messages to sell-side analysts regarding a meeting with the U.S. Food and Drug Administration. The company described the meeting as "very positive and productive." The regulator noted that the company's stock closed up 19.4% the next day.
In addition, the SEC said the company issued a press release July 17, 2017, disclosing that it had submitted additional information to the FDA but did not yet have a clear path forward regarding its marketing application for its estradiol vaginal softgel capsule for treating moderate to severe vaginal pain during sexual intercourse. Following the release, the company saw a 16% drop in its stock price.
The regulator found that the company selectively shared undisclosed details about the June 2017 FDA meeting and the information it had subsequently submitted to the agency in a call and email to sell-side analysts after the press release was issued but before the market opened. The SEC said that all the analysts published research notes containing these details and that TherapeuticsMD's stock recovered to close down only 6.6% that day.
In addition to agreeing to pay a $200,000 penalty to settle the matter, TherapeuticsMD also consented to the SEC's order without admitting or denying the findings and was ordered to cease and desist from future violations of Regulation FD.
