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ASCO Again Aims to Plug Information Leak

"The SEC has been looking closely at scientific information that is not yet publicly available, but could potentially influence financial markets," ASCO said in its statement announcing the new policy. "In that light, advance mailings of abstract books for scientific meetings, such as ASCO's, which include preliminary results from clinical trials of investigational and approved treatments, have been the subject of growing concern and debate."

ASCO officials could not be reached for comment.

It remains to be seen whether ASCO's new policy really stops Wall Street from getting advance access to research abstracts, but some fund managers acknowledge the ASCO game just got a whole lot tougher.

"This makes our job more difficult and makes the meeting more significant," says one hedge fund manager, who has long used early access to ASCO's research abstracts to gain a trading edge going into the meeting.

Last year, for instance, savvy biotech investors were playing shares of Genentech (DNA), ImClone Systems (IMCL), Cell Therapeutics (CTIC) and Millennium Pharmaceuticals (MLNM) well in advance of the ASCO meeting, based on data found in the research abstracts. That meant by the time the meeting started, a good bit of trading profits to be had already were.

But this year, if abstracts remain under lock and key, fund managers will have two days -- Saturday, May 31, and Sunday, June 1 -- to furiously download abstracts, attend presentations at which final data will be discussed, and formulate investment strategies in time for when trading begins on Monday, June 2.

"Stocks are going to be extremely volatile that week," adds the aforementioned fund manager.

Many other medical research organizations that deal with these same issues have resolved potential selective disclosure problems by releasing research abstracts to the general public and members at the same time, usually in advance of their scientific meetings. Some biotech industry professionals acknowledge that ASCO's new rules are tough, but still do the job by leveling the playing field when it comes to the release of important information.
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