ASX biotech guidelines a step closer

The Australian Stock Exchange (ASX) and industry group AusBiotech will put together a committee to oversee the continued development and uptake of voluntary ASX reporting guidelines released earlier this year.

According to ASX business development manager for listing Eddie Grieve, the two organisations are in the process of identifying and approaching potential committee members. Among them are likely to be four CEOs from listed companies, a couple of analysts, a member of the financial community and a representative each from the ASX and AusBiotech.

"We have a view to getting it up and running in the next few weeks," Grieve told Australian Biotechnology News.

Grieve said the driver behind the code was never a regulatory one. Instead, he said, it was all about promoting better communication between the industry and the market.

The code of practice will remain voluntary for the time being, with the possibility of eventually incorporating it into mandatory listing rules, Grieve said. The inspiration behind the code, the mining industry's code of best practice in reporting, was voluntary for years before its eventual inclusion in the listing rules.

"The mining code of practice started as a voluntary code, but over time the industry itself saw the need for it to become incorporated into the ASX listing rules," he said. "We're not sure yet what direction the biotechnology code will take. Our view is that in its early stages, it will remain a voluntary code... and it may turn out to be more appropriate in this industry to remain voluntary."

Grieve said that the biotechnology industry, through the committee, would be responsible for administering of maintaining the code.

The reporting code of best practice focuses on the need to clearly communicate information about trials and other company drivers to the investment community. Aspects covered in the current draft guidelines include:

• Reporting of patents, such as status of applications, information to be reported when patents granted and a periodic update of the company's patent portfolio.
• Licensing, collaborations and partnerships, particularly as to what should be disclosed and clear differentiation between immediate cash flow and potential revenues.
• Clinical trials, including initiation, changes to trials and results reporting.
• Periodic reporting of cash flows and activities.