A biotechnology stock, ImClone Systems of New York City, served as the root of Martha Stewart's insider-trading conviction, and life-science lawyers say that the biotech industry is ripe for more securities-related cases. Largely in response to the ImClone debacle, the US Food and Drug Administration (FDA) and the US Securities and Exchange Commission (SEC) initiated new policies that make it easier for these two agencies to cooperate on biotechnology cases. "Biotech has been hot for the last couple of quarters," says Darryl Rains, a lawyer in the Palo Alto office of Morrison & Foerster. "That raises the potential for disappointment. When you have unhappy shareholders, they will sue and attract the interest of regulators."
On Feb. 5, 2004, the SEC, which regulates public companies, and the FDA, which oversees the drug and medical device industries, announced an agreement to improve information flow from the FDA to the SEC. The agencies ...
