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Biotech Notebook: Hythiam, Shire, Genentech

Is there a CEO in health care who talks more but says less than Hythiam (HYTM) head honcho Terren Peizer?

I think not, especially after listening to two recent Hythiam conference calls -- one to discuss results from a clinical trial involving its controversial Prometa drug-treatment program, the other focused on third-quarter financial results.

Both calls were marathon affairs in which Peizer, if paid by the spoken word, would have earned himself a place on the Forbes 400 list. Sadly, most of what Peizer says is dubious-sounding hype, although happily, investors seem to see through it all. The result: Hythiam's stock price is in free fall.

Hythiam shares have dropped 50% to $3.65 since announcing "positive" results from the Prometa study on Nov. 1, followed by "record" third-quarter results one week later.

It didn't take much more than a cursory read of the press release announcing the trial results to see that Hythiam was playing a fast and loose with its analysis, counting only those patients who completed treatment, excluding those who dropped out.

Maybe Hythiam didn't think investors and analysts would notice this data fudge, but when they did, Peizer and his team became mighty defensive. The low point of the conference call came when the study's lead investigator -- someone who's supposed to be an independent and objective arbiter of Prometa -- began recounting personal stories of meth addicts in the trial buying Hythiam stock because they were convinced that the treatment had turned their lives around.

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