ASCO Data Springs More Biotech Leaks

The organization has a policy of mailing abstract books to its many thousands of members about two weeks in advance of the start of its annual meeting. These books are chock-full of research data from clinical trials scheduled for presentation at the meeting. Obviously, much of this is highly investable information, which is why many investors go to great lengths to obtain early access to the books.

Over the last several years, ASCO has tried to prevent leaks. It has a confidentiality policy prohibiting members from disseminating information contained in the abstract books, or from trading on that information on their own behalf. But ASCO has no real way of enforcing its confidentiality policy or policing the conduct of its members.

So, naturally, leaks happen. This sets up a situation in which investors with the money or connections who get hold of ASCO research can benefit, while those unable or unwilling to do so are left in the dark.

One hedge fund manager received an email about ImClone from his Lehman Brothers sales representative on Wednesday. The email reads, in part, "ASCO abstracts leaking out -- possible. ASCO have [sic] confirmed abstract books have been sent and maybe data doesn't look good..."

Mike King, a biotech analyst at Rodman & Renshaw and one of the biggest ImClone bulls on the Street, lowered his earnings forecast and price target for the company Wednesday, citing "concerns" related to Crystal study results expected at the ASCO meeting.