Genentech Stock Slide: FDA Meeting Should Have Been Webcast

Hard not to notice that Genentech began sliding Wednesday well before the FDA announced its decision on Avastin. Something leak on the FDA website? Insiders lose their minds? Hey, maybe it was one big coincidence.

[Update] Okay, I'm told by a number of people that the FDA oncology advisory committee meeting at which Avastin went down on a 5-4 meeting is public, so some analysts were in attendance. Fine, so favored clients of said analysts had a long window by which they sell (or go short) Genentech stock as the meeting spiraled toward a "No" vote.

Wake up. There is no excuse for not webcasting these meetings. None.

Comments

[Stockwhore]

I couldn't agree more. It was clear from Genentech's 4:45pm conference call with analysts, that some were present in the room at the advisory committee meeting in Gaithersburg, MD. This is a clear example of certain parts of the market having unfair access to information affecting stock price. The FDA can and should webcast the meetings. To paraphrase Susan Desomond-Heller, Executive VP for Product and Development at Genentech, the feelings of many of the advisory committee members were very clear even before they voted.

[anxt]

I agree that the meeting should have been webcast, but I don't see this as an issue of some investors getting significantly more timely information than other investors. There was some news out about how the meeting was going before the vote was announced, and I noticed that some forums like Yahoo!'s DNA message board were discussing these reports. We saw some volatility in the stock as a result--the stock dropped when the meeting started, and then began to rise after one analyst reported that the company's presentation went well and he thought the panel would vote to recommend approval. The stock was halted only a few minutes after the panel announced their vote, which was almost immediately put on the wires--it's not like there was a significant period of time for favored investors to trade on the outcome of the vote while the rest of the world was kept in the dark. Interestingly, while the stock dropped precipitously on Thursday for the few minutes it kept trading after the vote was announced, there was a good fifteen minutes or so this morning to sell at a HIGHER price if you wanted out of the stock. So, while I agree that a webcast would have been nice, I don't think it made a lot of difference. Incidentally, I support the decision to halt trading, which allowed time for investor and analyst discussion and reflection, and probably kept some investors from panicking and dumping their stock at absurdly low prices.