'ASCO Effect' Is Bad Medicine for Investors Not in the Know

SAN FRANCISCO -- It's been called the "ASCO effect." Shares in biotech and pharmaceutical companies routinely jump on the release of positive research results at the American Society of Clinical Oncology annual meeting.

With this year's meeting set to start Saturday, investors can try to profit from the "ASCO effect" by buying the stock of companies as they take the wraps off their research. But they'd be late.

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Some investors get the information earlier than the general public thanks to ASCO's long-followed procedures. And it appears that they're then using the information to trade. Trading volume in the shares of certain cancer drug makers spiked around April 10, the day this year that ASCO released preliminary information about its annual meeting to its members -- which include oncologists, cancer researchers and doctors-turned-Wall Street analysts. ...