Revised code to benefit ASX-listed life science companies

The Minister for Technology, the Hon Gordon Rich-Phillips, yesterday joined forces with the Australian Securities Exchange (ASX) and Australia’s biotechnology industry association, AusBiotech, to launch a revised edition of the industry code of best practice that will support capital formation by ASX-listed life science companies.

Speaking at the opening of the AusMedtech conference in Melbourne, Rich-Phillips said that the revised and updated Code of Best Practice for Reporting by Life Science Companies will have far-reaching benefits for the industry.

“The code articulates the ‘best practice’ message, which aims to provide investors and others with reassurance when investing in life science companies, thus supporting the industry in its ongoing bid to attract capital,” Rich-Phillips said.

“It also seeks to support and build the capability and understanding of less-experienced directors or those new to life sciences.

“Support for revision of the code was recommended by the Victorian Biotechnology Advisory Council and is very much in line with objectives of our major policy statement, Victoria’s Technology Plan for the Future - Biotechnology,” Rich-Phillips said.  

Dr Anna Lavelle, CEO of AusBiotech, said that the Code Edition Two is based on joint work done by the ASX and AusBiotech in 2005.

“Life science firms have a unique business model; many are small and require long-term investment during their pre-revenue phase, making them less attractive for institutional and other investors who don’t have specific knowledge of the life sciences,” Dr Lavelle said.

“One of the ways to address information quality and asymmetry, thus improving investor confidence, is to provide guidelines that are recognised by the ASX.

“This provides potential investors with a measure to see that companies are managing disclosure and reporting appropriately, as well as acting as educational support for potential investors and directors regarding clinical trials and other matters.”

Kevin Lewis, ASX Chief Compliance Officer, said the Code of Best Practice for Reporting by Life Science Companies helps guide life science companies to fulfil their continuous disclosure requirements and communicate with the market more broadly.

“The updated code reinforces ASX’s recently published guidance on continuous disclosure requirements for listed companies, an essential part of maintaining the integrity and efficiency of the listed life science sector. It also has the commercial benefit of helping life science companies in their communication with market participants.”

Companies using the Code of Best Practice for Reporting by Life Science Companies have adopted best-practice governance for the disclosure of information to securities investors.

The second edition of the code is based on joint work done by the ASX and AusBiotech and is supported by the Victorian Government. The Victorian Government is also supporting the development of a guide for new directors or those who are experienced directors but new to life sciences.

You can access the code here. For more information, contact AusBiotech Communications Manager Lorraine Chiroiu on (03) 9828 1414 or lchiroiu@ausbiotech.org.