2012-11-13 15:32:59 -

By Jason Napodano, CFA

In the age of the Internet and social media portals such as Facebook and
Twitter, investors are turning more and more to non-conventional sources of
information to gain an advantage on investing in the stock market. With a little
detective work, the ordinary retail investor can level the playing field versus
the professional analyst or money manager, and even game the system to an
advantage.

No industry presents more of a potential opportunity to scoop a story than the
biotech sector. With over 400 publicly traded pharmaceutical and biotech
companies testing their drugs in over 45,000 active clinical trials, many of
these trials with hundreds or even thousands of patients, somewhere out there,
someone is talking, or tweeting, or blogging.

No example is more representative than what was   recently seen with Sarepta
Therapeutics (NASDAQ:SRPT). Prior to the release of the phase IIb results on
October 3, 2012, Sarepta shares had been slowly trending higher for the better
part of the prior three months. Interest in the story, and eteplirsen, a RNA-
based therapeutics that is designed to repair a genetic mutation in certain
patients with duchenne muscular dystrophy (DMD), was first generated by the
company when it reported encouraging preliminary results from the phase IIb
study back in July 2012.

However, the press release alone from Sarepta wasn't enough to send the shares
from $3 per share to nearly $17 prior to the release of the full data three
months later. Instead, what drove meaningful excitement and net buying in the
stock were videos and blogging on twitter by some of the patients prior to the
company making the full results available. Parents of three of the eight
subjects who were in phase IIb trial had been publicly discussing the results
with local media (source, source) and even posted videos of their children's
impressive recoveries on YouTube (source, source).

Biotech investors even took to the Web, following the mother (@jennmcnary) of
one of the subjects in the trial on Twitter, and reading her blog
(DMDHero.com). You can't blame these patients. The eteplirsen results were
unprecedented, and to the family members of children with DMD, a godsend. Often
patients are not asked to sign confidentiality agreements before they enter
trials. And patients and their family members are far more interested in
treating the disease then running to check stock quotes online.

The practice of patients discussing clinical trial results is becoming more
common. Websites like WebMD and Drugs.com have forums where patients with
specific diseases can go and discuss coping with their disease, their symptoms,
drugs they're on, and even exciting results of clinical trials. Organizations
like the Alzheimer's Association, Parkinson's Disease Foundation, Crohn's and
Colitis Foundation of America, and Obesity Society of America all have pretty
in-depth websites aimed at educating and connecting patients with diseases. Any
one of these has the potential to scoop clinical trial results when patients
talk.

If that's not enough, medical and professional organizations may scoop clinical
trial results. Last month we wrote an article about Pozen (NASDAQ:POZN) prior to
the company presenting results of its phase III trial for PA-325/40. The drug is
a combination aspirin and omeprazole product designed for patients that require
daily aspirin therapy for the secondary prevention of cardiovascular events, but
also at risk for development of gastric ulcers.

I had not seen the data from the trial, but found on the American College of
Gastroenterology (ACG) website the preliminary itinerary for the meeting. Inside
the itinerary I noticed that Pozen had received two awards for its poster on the
data. One of the awards was the ACG's prestigious Presidential Poster Award.
Again, I hadn't seen the data, but clearly the ACG Educational Affairs Committee
had, and if Pozen won the Presidential Poster Award, a recognition awarded to
the, "Most highly ranked abstracts selected for the poster sessions in each
category."then I assumed the data was outstanding. As it turns out, I was right.
The data was pretty impressive.

Is It Happening Again?

Lately I've been watching shares of Neuralstem (NYSEAMEX:CUR). The company
recently completed a phase I trial testing NSI-566, a mixture of human neural
stem cells injected directly into a patients lumbar or cervical spinal cord for
the treatment of Amyotrophic Lateral Sclerosis (ALS). The phase I trial was a
15 patient open-label design. Neuralstem published preliminary results from the
first 12 patients of the trial in Stem Cells (2012;30:1144-1151). Since that
time, three new patients and three returning patients have received new
injections of NSI-566.

Analysis of the ongoing phase 1 trial in ALS continues. The final patient was
treated with five unilateral cervical injections in August 2012. The last three
patients treated (patients #16, #17, and #18) all previously completed ten
bilateral lumbar spinal cord injections (patients #10, #11, and #12). The data
published in Stem Cell showed clear signs of disease stabilization in a subset
of ambulatory patients on the ALS Functional Rating Scale (ALSFRS-R), as well as
a Forced Vital Capacity (FVC) and Hand-Held Dynamometer (HHD) scales. If we know
anything about ALS, it's that it is a rapidly progressive and degenerative
disease. Patients do not spontaneously stabilize.

One patient (#11), named Ted Harada, showed significant improvement in motor
function. Mr. Harada's improvements were so much so that he was able to walk
without a cane. Physicians even had to re-diagnose his disease to confirm ALS
after his unprecedented improvement following lumbar spinal cord injections of
NSI-566.

Similar to what we saw above with Sarepta and eteplirsen, Mr. Harada discussed
his results with local media (source). An article by Crain's Detroit Business
(link) highlighted the success of Mr. Harada, and another ALS patient, Ed
Tessaro, after receiving another round of treatment. There's even a video
interview of both Mr. Harada and Mr. Tessaro discussing their experiences with
NSI-566. Continue reading by clicking here.

See the full article at PropThink.com

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