Clinical Trial Disclosure Noncompliance: What Is Its Impact On Pharma M&As?

Failure to comply with clinical trial disclosure regulations poses risks that extend far beyond potential fines or reputational damage for sponsors. In the context of mergers and acquisitions (M&A), noncompliance can create significant liabilities for both acquirers and targets, affecting deal valuation, regulatory scrutiny, and long-term strategic outcomes. Companies must be vigilant in identifying red flags before entering an M&A transaction and take deliberate steps during due diligence to safeguard against exposure. Understanding the differences between U.S. Food and Drug Administration (FDA) requirements and Securities and Exchange Commission (SEC) disclosure rules is critical, as each carries distinct obligations and consequences.

This white paper examines the key pitfalls associated with noncompliance, outlines practical strategies for mitigation during M&A transactions, and highlights the potential consequences for sponsors who fail to meet regulatory disclosure obligations, offering a roadmap for protecting corporate value and maintaining regulatory integrity.