ASCO's Abstract Release Day: Preview

If ASCO research abstracts skimp on these important details, why do investors get worked up about their release?

Well, abstracts sometimes lack efficacy and safety data, but other times, that sort of information craved by investors is in there, either in interim or final form. Investors have no way of knowing how detailed research abstracts will be until they're released, which is why Wall Street's biotech and drug investors make a big deal out of ASCO abstract release day.

The importance of the ASCO abstract is also ruled by tradition. Back in the old days when ASCO selectively disclosed this information, institutional investors with privileged access to the data could make real money well before the general public had its chance.

To make this process even more complicated, ASCO purposely withholds certain late-breaking abstracts, delaying the releases until the meeting begins.

Is this investor fixation on ASCO and its abstracts the reason why biotech and drug stocks run up in advance of the ASCO meeting?

It sure is. This year's "hot" ASCO stocks -- defined by their surging stock prices this spring -- include Celldex Therapeutics (CLDX), Keryx Pharmaceuticals (KERX) and Delcath Systems (DCTH). Each of these companies will be presenting data at next month's ASCO meeting and each stock is on a huge run.

Other ASCO-related stocks making a more modest run ahead of the meeting include Pharmacyclics (PCYC), Ziopharm (ZIOP), Arqule (ARQL) and Sunesis Pharmaceuticals (SNSS).

Does the actual ASCO meeting really matter if investors get the information they need in advance from the research abstracts?

Yes, I think the ASCO meeting does matter. Remember, these abstracts were submitted months ago, so the clinical data you'll read about Thursday might be outdated by the time the meeting starts next month. That's why final presentations with updated data at the meeting are important.

The ASCO meeting can also be a telling barometer for the relative importance of clinical data. When Genentech (now Roche) presented Herceptin breast cancer data to a packed auditorium of 15,000 people a few years ago -- nearly everyone stood up and clapped -- you knew that Herceptin was going to be very big deal.

Conversely, a company that puts up a research poster in the corner of a cavernous exhibition hall and is then ignored by almost everyone can be signal that this avenue of research isn't ready to make headlines.

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