ASCO Abstract Book May Covertly Reach Wall Street Insiders

NEW YORK, May 18 -- The Wall Street Journal suggested today that the American Society of Clinical Oncology (ASCO) may be tempting its members to buy low or sell high, on the sly, by sending them advance confidential copies of the group's annual meeting abstract book.

The members-only abstract books, which include embargoed results of clinical trials, have explicit instructions prohibiting their use for trading purposes. Yet the newspaper cited several instances of pharmaceutical stocks rising or falling in mysterious ways since the books were sent out last week, ahead of the June 1-5 meeting in Chicago.

"Shares of ImClone Systems have tumbled more than 9% since Tuesday on heavy volume after embargoed data from an important cancer trial was released to 24,000 physicians expected to attend the conference of one of the largest oncology groups," the newspaper said. "Shares of Regeneron Pharmaceuticals have fallen almost 15% since and Genentech is down 3%, while Onyx Pharmaceuticals is up almost 10%, as investors pass around abstracts, or summaries, of data to be released as part of the ASCO meeting."

According to the newspaper, "a broad range of investors say they got their hands on the abstracts this week. Some say they have made trades based on the ASCO information because they received the data from third parties and therefore were under no obligation to abide by the embargo. Increasingly, hedge funds and other investment firms hire doctors as analysts or consultants, making it easier to get their hands on the abstracts."

The newspaper quoted unnamed securities experts who point out that "doctors who trade on the information could be in violation of insider-trading laws." It added that if doctors in possession of the ASCO abstracts "tell another investor about the data it gets murkier, but it could be problematic if the doctor knows that the recipient will trade on the information."

In a statement issued in response to the Wall Street Journal article, ASCO cited its "very strict confidentiality policies requiring that information in the abstract book not be reported on, used for trading purposes, or published prior to presentation at the meeting. The SEC governs this kind of information, and anyone who breaches these agreements is violating SEC rules and is at risk of prosecution. We expect everyone to abide by the law." ASCO said it "distributes the abstract book to its members two weeks in advance of the annual meeting so they can plan their itinerary and determine what sessions and advances in their specialty they need to learn about."

The newspaper quoted ASCO as saying that waiting until the meeting to distribute the abstracts would be an inconvenience to its members, and that "ASCO serves its members, doctors and cancer patients, not Wall Street."