Dore S. writes, "When does a company have the obligation to report critical data publicly? For example, Dendreon ( DNDN) has guided that Provenge data is anticipated for the end of April and they have a placeholder at the upcoming American Urological Association (AUA) conference at the end of the month. "However, if the data were to become available let's say mid-April, does Dendreon have the fiduciary responsibility to disclose it at that time? Or would they just release top line-data and full details at AUA?" I made a pledge to myself not to write anything about Dendreon prior to the release of the Provenge prostate cancer data. After all, what else is left to say about Provenge that hasn't been said over and over again already? I opined on the Provenge study last October when the interim results were released, and nothing has changed, or will change, until Dendreon makes public the final data. Yet Dore's question deserves an answer because it's not really about Dendreon as much as it is about how all biotech and drug companies must balance timely disclosure of material information with the demands of the scientific community which generally frowns upon data presentation by press release. I'm not a corporate lawyer but here is how I think about this issue: Any clinical trial that will have a material bearing on a company's stock price and/or valuation must be disclosed publicly as soon as the data/results are known to management. Clearly, Provenge is absolutely crucial to Dendreon's future, so results from the phase III prostate cancer study must be released publicly as soon as they become available. That means Dendreon will not wait for the AUA meeting at the end of the month, but will issue a press release with some level of detail about the Provenge results. I'd argue that any phase III study for any drug company, regardless if it's Dendreon or Pfizer ( PFE), is probably a material event requiring speedy disclosure. This is not necessarily true for earlier-stage trials. Pfizer, for instance, may not consider a phase I or phase II study to be a material event, and justifiably so, because one drug candidate out of dozens in its pipeline may not be significant enough to make much of a difference. But for a small biotech company like Amicus Therapeutics ( FOLD) (just to use it as an example) that has no approved drugs, no meaningful revenue, no profits and just a few drugs in its pipeline, each and every clinical trial -- phase I, phase II or phase III -- carries much greater weight overall. This is why biotech companies tend to be press release happy. They have many more material events to report. The other tangle that drug and biotech companies must deal with is how much to say in a clinical trial press release. Disclose too much and the medical societies that run the big scientific meetings won't let you present the data. But investors, naturally, want to know everything right away. This is why you often see companies release "top-line" data in a press release -- essentially a broad summary of the results -- while leaving the nitty-gritty details for later presentation at a scientific meeting. Reputable companies don't use this arbitrage situation to highlight the good data today and hide the bad data for later. But we all know that there are a lot of disreputable drug companies out there, which makes this setup less than ideal for everyone.
Steve has words for me on Celgene ( CELG) "I hope you are working on something regarding Celgene. You have been bullish on the stock for years as has been Jim Cramer. I, like many others, followed your advice and bought at much higher levels. Will you now maintain your bullish stance and defend your convictions or will you do a mea culpa and tell us to sell?" I sold my Celgene position in the Biotech Select model portfolio on April 2 at a significant loss, soon after the company warned of a first-quarter earnings shortfall. As Steve points out, I had been bullish on Celgene for a long time and continued to be bullish as the stock sank from the 60s, into the 50s and sadly, into the 40s. Maybe Celgene found a bottom with its first-quarter earnings warning and now is a good time to be buying the stock for its above-average growth prospects. That's what Jim Cramer's been doing for his Actions Alert portfolio. But as you can see above, I'm not the guy to be recommending Celgene anymore.
A related email from Cary L.: "I own a good number of biotechs,and was struck by yesterday's
Finally, because hate mail is fun to read, I'll close the Mailbag with a note from Quint S., who didn't like my column on Arena Pharmaceuticals' ( ARNA) lorcaserin results. "In my opinion you are either just another moran