Please read the following article: What's the Dollar Value ofOnline Patient Chatter?
On the Internet, people talk about everything, even theirillnesses. Treato, an Israeli data-mining company, monitorsconversations on Facebook, Twitter, and patient forums forinformation on drug side effects and prescription patterns. It thensends weekly or monthly analyses of the chatter to hedge funds andmoney managers that invest in pharma stocks. Ofir Levi, head oflife-science research at Israel's Adamas Healthcare Fund, turned toTreato with a hunch. The prostate cancer drug Xtandi, co-developedby Astellas Pharma and Medivation, is approved in the U.S. only forpatients who've already had chemotherapy. Levi suspected physiciansmight be prescribing it offlabel for use before chemo. "By lookingat patient discussions, we figured that pre-chemo patients werealso getting this drug," he says. That appeared to confirm Levi'sguess that the market for Xtandi was probably larger than theapproved patient population. His hedge fund bet on Medivation andwas rewarded when the company reported better-than-expectedfirst-quarter sales of the drug on May 8 and its shares gained asmuch as 8 percent in trading that day. "For the first time,investors don't have to listen to the CFO" to find out how a drugis doing, says Ido Hadari, chief executive officer of six-year-oldTreato.
So-called expert network companies, such as Gerson Lehrman Groupand MedaCorp, have thrived by putting investors in touch withdoctors, researchers, and other health professionals. Treato'sselling point is big data. Its software reviews "tens of thousands"of patient forums and informal discussions daily, Hadari says.Individuals aren't identified; instead, the company seeks to findtrends in how drugs are used and what problems consumers areexperiencing. Companies such as Saama Technologies and SignalsIntelligence Group pitch what they call social listening servicesto drugmakers and health insurers. But closely held Treato is oneof the few also putting its algorithms to work for the investmentcommunity, according to Brigham Hyde, vice president for datascience at Decision Resources Group, a health-care consulting firm."If it's proven you can actually make better investment decisionsby using this, investors will flock to it," says Les Funtledyer,portfolio manager for Esquared Asset Management, which isn't aTreato client. The patient conversations monitored by Treato rangefrom broad to granular. "I recently stopped using singular as I hada severe episode of depression," a patient wrote onMedications.com, in a thread the company's software dredged up eventhough the name of Merck asthma drug Singulair had been misspelled.Treato's archive on Pfizer cholesterol drug Lipitor includes morethan 40,000 discussions, including one on Bodybuilding.com aboutcholesterol content in protein shakes and whether they're suitablefor someone on Lipitor. Representatives for Pfizer and Merckdeclined to comment on the conversations Treato had gathered ontheir drugs.
While hedge funds now subscribe to its reports, Treato's maincustomers are pharma companies. Hadari says he counts nine majordrugmakers as clients-he won't name them, saying he's bound byconfidentiality contracts-and a "handful" of finance companies. Healso declined to discuss pricing. According to the director foranalytics at one pharma company who asked not to be identified forcompetitive reasons, the appeal of Treato's service is that it candeliver answers to such questions as why patients switch from onedrug to another. Treato could face greater competition from patientforums. When Ed Sikov, a writer in New York, was diagnosed withParkinson's disease in 2008, he joined PatientsLikeMe, a websitethat hosts forums on 2,000 conditions and has more than 250,000members. "I'm not comfortable with investors making bets on whatpeople are experiencing without the people themselves knowingthey're being monitored," Sikov says. But he's all right withPatientsLikeMe, which clearly states that it sells the data itgathers to drugmakers listed on its site, including AbbottLaboratories and Bristol-Myers Squibb. Co-founder Ben Heywoodhasn't ruled out selling information to health investors. Thesite's privacy policy says names, e-mails, and dates of birtharen't distributed.
Hyde, of Decision Resources, who has no firsthand experiencewith Treato, has yet to be convinced about the value of usingsocial listening tools for investing. Patients may discuss a drug'sside effects online, he says, but the issues they raise wouldaffect a drugmaker's stock only if they attract the attention ofthe U.S. Food and Drug Administration and lead to restrictions on adrug's use. Says Hyde: "Data hasn't proven yet that signals lead todistinctive change in outcomes."
Please answer the following questions:
How much of an advantage will access to big data have for largerinvestors over smaller investors?
Will smaller investors likely have access to big data?
How should reports that accompany financial statementsacknowledge some of the findings of data mining that a corporationmight have uncovered?
