Street Elite Get Early Crack at Arena Study

BOSTON (TheStreet) -- On Tuesday afternoon, SummerStreet Research Partners, a healthcare research shop, sent emails informing its institutional investor clients about an important study and related editorial concerning Arena Pharmaceuticals(ARNA) that were published in this week's New England Journal of Medicine.

Here, in full, is the text of the email sent Tuesday to investor clients about Arena and the NEJM by SummerStreet Research:

"ARNA (BUY), The BLOOM trial is published today in the NEJM with an editorial. The editorial points out that lorcaserin has slightly less than or equal efficacy to Orlistat and slightly less efficacy than Meridia (sibutramine). However the justification of approval for lorcaserin is that its safety profile appears to be better than that of Xenical (orlistat) or sibutramine. In addition, lorcaserin appears to result in improvement of all surrogate measures of diabetes and cardiovascular risk: the effect is small however clinically relevant. This is important since sibutramine did not and subsequently went on to demonstrate negative cardiovascular outcome in the SCOUT trial. The SCOUT trial results will be presented tomorrow at the International Obestity conference in Stockholm. The author of the editorial suggests that lorcaserin will probably be used in combination, perhaps with GLP-1s (prior to phentermine). Overall we consider the publication a positive for the shares and it bodes well for the September 16th advisory panel meeting (bolsters the Eisai deal – safety first novel agent)."

Later Tuesday night, J.P. Morgan biotech analyst Geoff Meacham also sent an email to his investor clients, telling them about an HIV study likewise published in this week's NEJM that has implications for Gilead Sciences(GILD).

Normally, these emails wouldn't raise an eyebrow. Research analysts are just doing their jobs when they make sure clients stay abreast of all the latest medical information that can affect stock prices.

Yet, if I had published stories Tuesday similarly informing readers about studies related to Arena and Gilead published in this week's NEJM, the journal editors would have screamed foul. [And they may be doing exactly that as they read this column.]

The NEJM's media embargo policy forbids journalists from publishing stories about medical studies in the current issue of the NEJM until Wednesday nights, one day prior to the journal's official Thursday publication date. The NEJM, like many other medical and scientific journals, places embargoes on studies to give journalists time to interview experts and prepare stories.