BioWorld International Correspondent

SYDNEY, Australia - Leading Australian firm AusBiotech will this week announce a committee to consider a draft code of best practice for life sciences companies reporting results and making announcements.

Proponents hope that a finalized code would reduce the problem of swings in share prices that result when biotech companies announce clinical trials, as well as boost overall share valuations by improving communications with investors.

The committee, to include representatives from the Australian Stock Exchange, AusBiotech and several other companies, is expected to be announced at the industry's annual conference AusBiotech 2004 held this week.

Once formed, the committee will look at a draft code developed by both the ASX and AusBiotech, but there is no immediate proposal to make the finalized code enforceable by the stock market. Instead, the code will be voluntary - at least initially.

A spokeswoman for ASX said that the exchange regards the code as a "work in practice" and the issue of whether it is to be voluntary or enforceable is a matter for consideration. There also is no time frame for making decisions about the code.

AusBiotech Executive Drector Tony Coulepis said that Australian biotech companies are generally given lower valuations than their overseas counterparts, and he said part of the reason for those lower valuations is poor communication.

He said that best practice reporting guidelines would make reports "more meaningful" and improve communication. In addition, the guidelines would reduce share price volatility.

He expects that it might take 12 months to 18 months to finalize the guidelines, and then it will be a matter of "testing" them at length to see how they work.

A draft of the guidelines is available on the ASX website and it covers a number of issues, including reporting of patent applications, results, clinical trials, cash flow and key appointments. For reporting on clinical trial results, for example, the guidelines recommend that companies not use the terms Phase I and Phase II for trials considered to be exploratory or pilots. It also asks companies to disclose the standard to which the trial will be conducted, as well as basic details such as the number of patients involved, the dosage levels, whether the trial is single-blinded, double-blinded or unblinded, among other recommendations.