Biotech Valuation Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Biotech Valuation

CRSP 56.98

+1.1%

Nov 5 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Torben Noerup Nielsen who wrote (1152)	5/31/2000 2:34:00 PM
From: Thomas M.	Read Replies (2) of 52153

J Investig Med 2000 Mar;48(2):118-24 Related Articles, Books Biotechnology stock prices before public announcements: evidence of insider trading? Overgaard CB, van den Broek RA, Kim JH, Detsky AS University of Toronto Program in Clinical Epidemiology and Health Care Research, Ontario, Canada. BACKGROUND: Unique financial challenges faced by biotechnology companies developing therapeutics have contributed to the creation of a highly sensitive market, where stock prices are capable of great fluctuation. The potential for significant financial reward and the nature of the scientific review process make this industry susceptible to illegal share trading on nonpublic information. We examined stock prices of biotechnology products before and after announcement of Phase III clinical trial and Food and Drug Administration (FDA) Advisory Panel results for indirect evidence of insider trading. METHODS: Biotechnology stock prices were recorded for 98 products undergoing Phase III clinical trials and 49 products undergoing FDA Advisory Panel review between 1990 and 1998. Prices were recorded for 120 consecutive trading days before and after public announcement of these two events. We compared the average change in stock price of successful products ('winners') with unsuccessful products ('losers') before the public announcement of results for both critical events. RESULTS: The difference between average stock price change from 120 to 3 days before public announcement of results of Phase III clinical trial winners (+27%) and losers (-4%) was highly significant (P = 0.0007). A similar but non-significant difference was observed between the average stock price of winning (+27%) and losing products (+13%) before FDA Advisory Panel review announcements (P = 0.25). CONCLUSIONS: Our results provide indirect evidence that insider trading may be common in the biotechnology industry. Clinical investigators may wish to consider this issue before participating in any equity position in the biotechnology industry, especially if they are going to perform research for those companies. PMID: 10736971, UI: 20201210

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next