Rich May News: 2005
October 12, 2005
Mass High Tech Interviews Rich May’s Walt Wright on the Importance of Legal Compliance for Biotech and Other Technology Companies
Rich May’s Walt Wright was quoted in a Mass High Tech feature article by writer Dyke Hendrickson regarding the abrupt resignations of high-level executives of biotech companies after their companies were publicly denounced for lack of compliance. The SEC has recently brought a civil suit against Biopure Inc. for failure to disclose accurate information about the company’s standing. Biogen Idec’s multiple sclerosis treatment, Tysabri, has recently been taken off the market due to a possible link between the drug and development of rare and fatal brain disorders. These events illustrate some of the risks that are prevalent in the biotechnology business as well as arouse questions of the importance of regulatory compliance in this industry.
Excerpt: “All technologists must be aware of and responsible to the legal demands and risks attached to their work. Those who take on executive positions at public companies with federally regulated products have a much deeper responsibility of proactively assuring full compliance. Failing to fulfill that responsibility could or should result in termination,” said Walter Wright III, an attorney with law firm Rich May PC in Boston.
Complete text of Interview:
Must companies be fastidious in their legal operations?
Yes, it is a requirement of even the smallest enterprise. Neglect at your business, professional and personal peril.
Emerging companies often neglect legal operations in the pursuit of profitability or, particularly in the case of tech companies, milestones such as regulatory approvals, test trials and beta installations.
Publicly-traded Biotech companies needing FDA approvals are in a difficult situation, the CTO/CMO and his FDA legal team can be isolated from the CFO and his SEC legal team. It is easy to see, but still unacceptable, how disclosure and compliance problems can occur. A small cap company without investor confidence, let alone under SEC investigation, may never reach the finish line.
Does it appear that the departures of the two execs are connected to the legal problems?
Certainly the proximity of the departures with the legal challenges makes it very easy to see connections. But the board and management of each company is experienced enough to know that scapegoating doesn’t solve problems in the long term. The investing public, the SEC and FDA also know better.
Nevertheless, all technologists and researchers must be aware of and responsive to the legal demands and risks attached to their work. Those who take on executive positions at public traded companies with federally regulated products have a much deeper responsibility of proactively assuring full compliance. Failing to fulfill that responsibility could/should result in termination.
Of course, in these cases it is likely a number of unrelated factors, including the normal progression of the business careers of entrepreneurial scientists and the growth spiral of tech companies; excellent technologists like to tackle a series of innovation opportunities and not always in the same business setting while changes in senior management and direct reports naturally lead to C-level reshuffling and the departure of founders as different interests and skill levels are required.
Click here for the complete article
About Rich May
Rich May’s diverse practice embraces the organization and operation of business ventures, venture capital, private placements, hedge funds, public offerings, technology licensing, mergers and acquisitions, contracts, joint ventures, internet and e-commerce law, employee relations, intellectual property, litigation and dispute resolution, energy, telecommunications, public utilities, wealth planning and real estate. Rich May provides superior legal and strategic counsel through its extraordinary commitment to clients’ success, outstanding professional competence and straightforward ability to communicate. Rich May embraces an entrepreneurial spirit and maintains a mission execution culture that distinguishes Rich May from other law firms.
Rich May combines the stability and experience of one of Boston’s oldest preeminent law firms with the innovative spirit and energy of a venture catalyst intensely focused on serving high-tech entrepreneurs, emerging companies and investors in New England and throughout the United States.
For more information, visit www.richmaylaw.com.
More News
2007 2006 2005 2004 2003 2002
