ASCO Again Aims to Plug Information Leak

The American Society of Clinical Oncology is taking new and somewhat draconian steps to eliminate the leaking of market-moving research abstracts prior to its all-important annual meeting in late May.

The leaking of ASCO research abstracts in advance of the well-attended cancer research meeting -- and the dissemination among Wall Street's institutional investors -- has skyrocketed over the last several years. This so-called "ASCO effect" has led to wild fluctuations in the stocks of biotech and drug companies as investors learn how experimental cancer drugs are faring in clinical studies.

Bowing to the spirit of Regulation Fair Disclosure, ASCO on Friday announced a new, get-tough policy: Research abstracts will not be available until the first day of its annual meeting on Saturday, May 31, reversing a long-held policy giving organization members an early peek at abstracts.

It's the second information-policy change for ASCO in as many years, following TheStreet.com's drawing attention to the effect of ASCO's disclosure of abstracts on the market during the 2000 meeting. Last year, ASCO tried to clamp down on the leaks, with no success, mainly because the nonprofit medical research group insisted on giving its dues-paying members -- but not the general public -- access to the research abstracts one month in advance of the meeting's kickoff.

Not surprisingly, some of ASCO's members work on Wall Street, or are happy to share information with curious fund managers and sell-side analysts.

That, of course, left retail investors in the dark, leading to criticism of ASCO's practices, mainly that the group was aiding and abetting the selective disclosure of nonpublic, market-moving information. ASCO, as a nonprofit, claims exemption from the Securities and Exchange Commission's Regulation FD.

Attendees traveling to Chicago, the site of this year's gathering, will be handed the telephone book-sized "Meeting Proceedings" book -- chock full of research abstracts -- when they arrive at the convention hall. ASCO members not attending the meeting will be able to download abstracts off the Internet on the same day, after entering their passwords and agreeing to what ASCO calls a "double-click confidentiality policy."