One of the questions I get asked quite often is, “can I put out a press release on a regulatory submission?”. My standard answer is “Yes, you can, but why would you?” There’s an old saying about counting chickens before they are hatched. Basically, it’s not a good idea. I would argue that the same holds true for regulatory submissions.
A case in point…there was a company that had to put out a press release this month because the FDA had rejected their breakthrough application. It was curious to me as to why they felt the need to announce this rejection, until I saw the SEC filing. I then looked deeper and found that back in April they had announced the breakthrough filing with the FDA. Which was followed closely by a bump in the stock price. You see where this is going.
Back when I started in this business, regulatory submissions were closely guarded secrets. You didn’t want anyone, particularly your competitors, knowing that you had filed. Because a lot can go sideways in the review process.
But recently I’ve seen a lot of companies put out a press release when they file a regulatory application with the FDA. If properly worded, there’s nothing wrong with this practice from a regulatory standpoint, but you should ask yourself “what will I say if the approval doesn’t happen?”.
Potential business partners may wonder why it’s taking so long to get that approval. Competitors may use the information in conversations with your customers (“Boy, it sure has been a while since their PMA filing, hasn’t it?”). Savvy investors may hold it against you, or at least ask you some tough questions on the next earnings call. And you might have to file something with the SEC.
My general rule of thumb on press releases is that you should put them out when you’ve done something that is definitive. Launched a new product. Hired a new CFO. Received an approval letter from the FDA. It’s great to celebrate victories like getting breakthrough designation or getting approval from the FDA. But my advice is wait until those eggs have hatched. Otherwise you may have to explain why there are so few chickens.