Confusion reigns as PR firm-managed EASL embargo lets investors have access to abstracts before they’re public

For the second year in a row, the embargo policy at the European Association for the Study of the Liver (EASL)’s International Liver Conference is exasperating reporters who cover drug companies and biotechs — chief among them TheStreet.com’s Adam Feuerstein.

Last year, it was a “freely available but embargoed” policy that drove Feuerstein — who has had more than his share of run-ins with bizarre and indefensible embargo policies — mad. And this year’s? Feuerstein has minced no words. Yesterday, he called it “misguided, unfair and quite frankly unworkable.” (Today, he added “confused” and “incompetent” in light of the news that news of a delay in putting the abstracts online, delivered in an EASL email, was news to the people running the conference press office.) As Feuerstein wrote yesterday:

…if you want an advance look at potentially market-moving hepatitis C drug data, you’ll have to be an EASL member or a registered attendee of the EASL meeting — a group which includes hedge fund and mutual fund portfolio managers and sell-side analysts, all of whom can pay for early access.

EASL plans to selectively distribute hepatitis C drug research abstracts to these folks on Thursday. The same documents will not be made available to the public. That means a select group of investors will have access to potentially stock-moving clinical data while a majority of investors will be kept in the dark.

Journalists registered to cover the EASL meeting will also be granted early access to hepatitis C research abstracts but they are barred by EASL’s restrictive embargo rules from writing about any new data until the start of the April meeting.

I asked EASL spokesperson Jacqui Sisto for comment:

We are aware of a few recent reports expressing concern about EASL’s media embargo policy for The International Liver Congress™ (ILC) 2012.  In particular, we reject the notion that EASL is giving exclusive, early access to ‘privileged investors’ as has recently been claimed.  This is in fact inaccurate.  EASL is providing advance access to accepted abstracts to all meeting delegates and journalists who are formally registered to attend this year’s Congress.

(In fact, Feuerstein made all of that clear in his post. Investors are clearly among those who have advance access, and he didn’t say they had any more exclusive access than others who had registered and paid for the meeting.)

We are also issuing these abstracts under embargo, and the embargo will not be lifted until the date and time of their presentation at the scientific session(s).  This is meant to reassure authors that their latest findings in science and research are best protected from authorised use until presentation at the International Liver Congress™.  It is also intended, for the benefit of EASL members and meeting participants, to protect the Congress as a primary source of free, full and objective scientific exchange of data most relevant to hepatology and clinical practice.

The idea that investors won’t act on the abstracts until the embargo lifts is ludicrous. Just look at the ASCO Effect, in which stock prices used to mysteriously move between the time when embargoed abstracts were released to reporters and the conference actually began. ASCO changed that policy, in no small part thanks to Feuerstein’s criticisms. Back to Sisto:

Furthermore, EASL is not selectively distributing ‘stock-moving’ data.  If data is truly material, the burden falls on the company responsible for the data to disclose it publicly. We are aware that individual pharmaceutical companies have their own policies in place regarding material data, and we assume companies will follow these as appropriate.

I’m not sure where the idea that EASL is only distributing “stock-moving” data comes from, but I should note that EASL must be acutely aware of companies’ responsibilities for disclosure. That’s because Cohn&Wolfe, a big PR firm that counts a number of drug companies among its clients, is managing the press office at this year’s EASL meeting — just as they did last year.

I had some questions about whether that was a conflict of interest, given that Cohn&Wolfe represents companies whose stock prices might be affected by results presented at the meeting. The EASL secretary-general, Heiner Wedemeyer, told me they had “every confidence” in the firm and their internal procedures.

Wedemeyer also said that the board would take my criticisms seriously and consider changing last year’s freely available but embargoed policy — a pet peeve of mine, as Embargo Watch readers will recall. And I give them credit for what looks like an attempt to have done that, although including any investor who pays to attend the meeting in the “agreed to an embargo” category is not actually a terrific fix.

That governing board may continue to make changes, Sisto said yesterday:

The EASL media policies for this year’s [International Liver Conference] have been directed and approved by the EASL Governing Board and will remain in place and enforceable for this year.

We will, however, reserve the right to review this policy and/or amend it in future.

Please do, EASL. Please do.

Update, 8:15 a.m. Eastern, 3/22/12: EASL changes its policy.