The rest of the story... On 31 May 2005, Renovis signed an agreement with Pfizer that looked like good news in terms of cash, support and validation. But as documented by Tuck in the Firesales thread,
Message 21374081
the stock went down over 20% that day. Today's Boston Globe has a story on Expert Networks that provides the background for this discrepant event.
Best,
graham
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bostonglobe.com
[Lots of interesting detail snipped...]
Dr. Corey Goodman was on vacation in Hawaii in spring 2005 when he was deluged with calls from panicky investors in his small firm, Renovis, which had just reported promising results of the clinical trial of a stroke drug under development. On May 31, 2005, Leerink had hosted a conference call in which one of its MedaCorp consultants, Dr. Marc Fisher of UMass Memorial Medical Center, questioned whether the results were as promising as Renovis asserted.
After the call, Renovis’s stock got hammered, losing nearly 23 percent on May 31 alone.
Goodman said he contacted Fisher and urged him to learn more about the study methods. Fisher, in a recent interview, acknowledged he was not well informed about the Renovis study when he first questioned its results. “I really stepped in it,’’ Fisher said.
Fisher, who no longer does expert consulting because he edits a medical journal, said he blames Leerink in part for the incident, contending the firm did not prepare him sufficiently for the conference call. (MedaCorp’s website says consultants such as Fisher are given materials to prepare them to talk directly to investors.) He later retracted his initial opinion of the Renovis drug after talking to the trial’s principal investigator. But his subsequent remarks on the study - to an industry journal - did not receive nearly the attention on Wall Street as those made during the Leerink call.
Ultimately, Goodman’s beef with Leerink didn’t matter. In a subsequent trial, the stroke drug proved ineffective and AstraZeneca, which had licensed the drug from Renovis, elected to drop it. Renovis, which was sold to a German firm, closed in 2008. |
