Puma Bio, embroiled in controversy over its breast cancer drug neratinib, is turning away some investors and at least one analyst from a company event scheduled for next Monday night during the annual meeting of the American Society of Clinical Oncology.
The hotel ballroom doesn't have the capacity to accommodate the "much larger than expected response" to Puma's investor/analyst meeting. "We regret to inform you that due to this response, we are unable to confirm your reservation or accommodate you on June 1," says an email sent over the past week to people denied entry to the gathering. As an alternative, Puma is offering a webcast of the event.
Tom Shrader, a research analyst at Stifel Nicolaus, received the "you can't come to our meeting" email sent by Puma. Shrader covers Puma with a hold rating.
At least one well-known healthcare hedge fund manager was also sent that same e-mail. He asked that his name not be disclosed because he plans on using alternative means to attend the event.
Puma's investor gathering is being held at the Renaissance Chicago Downtown Hotel. According to the hotel's web site, the conference/ballroom reserved for the event can accommodate up to 300 people.
Restricting access to a corporate event might not be such a big deal if not for Puma's penchant for selectively disclosing important information to people deemed friendly to the company.
Earlier this month, Puma's stock fell almost 20% in a single day following the release of a key ASCO research abstract containing disappointing results from a large study of neratinib in breast cancer patients. Puma defended neratinib by providing analysts from Leerink and UBS with additional clinical data not contained in the ASCO research abstract.
The analysts -- both with buy/outperform ratings -- used that additional neratinib data to defend Puma in research notes published the day after the stock sank. Leerink and UBS have each received investment banking fees from Puma.
To this day, Puma still has yet to publicly disseminate that additional neratinib data. A full presentation of the neratinib study results is scheduled for Sunday morning during the ASCO meeting. Puma said it will use the investor/analyst event on Monday night to hammer home the message that the neratinib results are positive.
Puma officials didn't respond to a request for comment about Monday's event. The analysts from Leerink and UBS did not respond to questions about their research notes defending the company.
Puma has said neratinib is a potential blockbuster drug for the treatment of HER2-positive breast cancer patients in the extended adjuvant setting. The data supporting this indication from the phase III "ExteNet" study are controversial, however, and will be subject to much debate at this year's ASCO annual meeting.
Puma's market today exceeds $6 billion, mainly because investors believe the company will be sold long before neratinib is approved. Puma's founder and CEO Alan Auerbach has a history of biotech deal making. His previous company, Cougar Biotech, was sold to Johnson & Johnson (JNJ) for $1 billion in 2009. While not making specific promises, Auerbach has not exactly denied speculation that his strategy for Puma is to sell the company like he did with Cougar.
The stakes this time, however, are much higher given Puma's $6 billion-plus market value. At that price, a potential suitor has to truly believe in neratinib's blockbuster potential.
The neratinib debate will be the No. 1 focus of Puma's Monday night event, buy only a selected group of investors and analysts will get to participate in person.