July 3, 2019
Hello,
Cerecor is a small public biotech that is closely held. Under this proposed rule change we will likely not be subject to 404(b) in 2020 while we otherwise would be. This will result in approximate savings of $1M in our 2020 budget that we will put towards our R&D activities. Like most biotechs our expenses are incredibly important as we incur cash deficits until we can bring our pipeline products to market. I believe there are numerous other biotechs like Cerecor that will put these significant cost savings to supporting saving and improving lives. I don’t believe the rule change compromises our ability to detect a misstatement as we have strong internal controls as well as an external audit (I previously worked for EY for 10 years and therefore believe I am a good judge of this). Furthermore, like other biotechs most of the value of our company is related to future milestones and often has little to do with the currently reported financial information. I think this is would be a big win for our industry and as a result there will be more companies around our size that will enter the public markets (or stay in the public markets) due to the corresponding cost reductions. Thank you for recognizing the burden that 404b puts on companies of our nature and size. While it is easy to just think about financial figures, I truly believe that this rule may save or improve lives as small biotechs can spend more on R&D activities to bring more new and innovative drugs and technologies to market faster.
Thanks again!
Chris