ASCO: 'Open Door Policy' Levels Playing Field
TheStreet.com's senior biotech writer Adam Feuerstein broke this story earlier today, but now we've confirmed it independently. The American Society of Clinical Oncology (ASCO) is changing its ways. The organization behind the World Series of scientific conferences is adopting a new policy for the release of clinical trial data that not only change the way oncologists practice, but also move biotech, pharmaceutical and biopharma company stocks.
Earlier this yearI blogged and reported on-air about the controversial ASCO embargo. Thousands of doctors--along with dozens, if not hundreds of reporters--received the "ASCO Bible" containing drug study results at least a couple of weeks before the big conference. There was an honor system to keep mum. But it apparently didn't work.
Some doctors whose patients are investors, whose golf buddies are hedge fund managers, whose next-door neighbors are traders, etc. allegedly leaked data that ended up moving a small number of stocks ahead of the ASCO meeting. ImClone Systems , in particular, was a big mover this year.
Look at the cliff around mid-May in this one year chart and you'll see what I'm talking about. So, next year when ASCO sends out the big books it will simultaneously post the same information on its web site for everyone to see. The so-called late-breaking data--typically high profile, potentially game-changing studies--will still be kept under wraps until the conference starts, but everything else will be out there.
Investors should remember, though, that the data for the ASCO book are due in early January, so it's still possible that the results that are published in the book and online could still change between the deadline and the presentation in late May and early June.
ASCO CEO Allen Lichter tells CNBC in an email, "ASCO reviews its Annual Meeting policies every year to ensure they are relevant and meet the evolving information needs of our members, patients, and others. Our abstract distribution goal was to better meet the needs of all interested parties, while preserving the responsible release of important scientific developments. We think these policies accomplish that."
ASCO has sent out three different letters to members and various interested parties informing them of the policy change. There was a lot of grumbling this year that the old way of doing things could lead to a trading scandal. Now, I'm waiting to see if ASCO will also change its policy to finally allow TV reporters to broadcast live from within the hallowed halls of the convention center during the meeting. I'm not holding my breath.
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