Bash the Analysts! A CEO's Complaints Show It's Fair Game
Once, chief executives stewed when they felt Wall Street stock analysts mistreated them for giving investment-banking business to a rival firm. Now, they are hitting back.
Remi Barbier, the chairman and CEO of Pain Therapeutics Inc., is accusing two Wall Street analysts of dumping on his company after their firms were passed up for some lucrative business: underwriting an offering of the biotechnology concern's shares.
The analysts dispute the allegations, but Mr. Barbier is pressing on, in a standoff seen by some outsiders as a sign of the weakened clout of stock analysts in the wake of securities-industry overhaul.
"What I smell here is a direct link between our investment-banking relationship and research coverage," he says. "The more things change on Wall Street, the less they do."
The showdown follows an analyst conference call in October, during which Mr. Barbier said his company would undertake a second trial for a drug it is producing.
While some investors say they expected the news, it prompted analyst Ken Trbovich, of C.E. Unterberg, Towbin, to downgrade Pain Therapeutics' stock, since he says the South San Francisco, Calif., concern hadn't previously warned that a second trial was a possibility.
Following the downgrade from Mr. Trbovich, and cautious words from an analyst at Thomas Weisel Partners, Pain Therapeutics shares, which had been edging higher, tumbled 38% in a just a few days. They since have recovered some of that decline, though they're still down about 16% since the conference call.
Mr. Trbovich disputes the notion that his call on Pain Therapeutics had anything to do with banking at his firm, a health-care investment bank, and says Pain Therapeutics never told him that there was going to be a second trial for its new medication, called Oxytrex.
"If [Mr. Barbier] spent as much time communicating with analysts as he is spending on [public relations], these problems might not arise," says Mr. Trbovich, a health-care analyst who has been covering the company since April.
Weisel analyst Donald Ellis issued his own report, saying Pain Therapeutics' expenses would rise as a result of the new trial. Mr. Ellis kept a "peer perform" rating on the stock, a rating he has had since a new rating system was instituted in April, suggesting the stock would trade in line with its competitors.
Says Perry Boyle, co-head of research at Thomas Weisel Partners: "There is no connection between coverage of the company and anything going on on the banking side of Thomas Weisel Partners." Mr. Ellis declined to comment.
In one sense, the tiff between Pain Therapeutics and its analysts is the latest chapter in a familiar story: Companies have long grumbled about negative coverage from stock analysts, and sometimes they've raised suggestions that negative ratings were the result of banking relationships gone sour.
But they've tended to grouse quietly, worried that their complaining would appear as if they were trying to deflect attention from a downbeat report.
What's different now is that companies are seen as more likely to go public with their gripes, emboldened by April's $1.4 billion stock-research settlement between Wall Street firms and New York Attorney General Eliot Spitzer.
"The sour grapes aren't new, but executives may not have gone public with them a few years ago," says Joel Seligman, dean of the Washington University School of Law in St. Louis.
In August, Peter Munk, a Toronto real-estate investor, and Trizec Properties Inc., sued Jonathan Litt, an analyst at Citigroup Inc.'s Smith Barney unit, for defamation, negligence and unlawful interference with economic relations after the analyst aired criticisms of Mr. Munk's attitudes toward corporate governance. Citigroup at the time defended Mr. Litt and said Trizec's claims were without merit.
The Pain Therapeutics imbroglio began when the company sold $50 million in add-on shares in September in a deal led by Citigroup. According to Mr. Barbier, the deal resulted in about $1.5 million in fees for the financial-services concern. Citigroup wouldn't comment.
He says Mr. Trbovich's firm asked to be part of the deal, but wasn't included, in part because he viewed the firm as too small.
Mr. Barbier says Thomas Weisel Partners pushed to lead the deal. When the firm was offered only a less-lucrative slot as co-lead manager, Thomas Weisel backed out of the transaction, he says.
Then, a month later, in an Oct. 16 conference call with investors and analysts, Pain Therapeutics executives addressed the company's outlook and spoke of the need for a second Phase III trial for Oxytrex, a treatment for chronic pain.
A day later, Mr. Trbovich downgraded his long-term rating on the company to "market perform" from "buy," citing the need for a new trial, and Mr. Ellis issued his report, also pegged to the news of the new trial.
Mr. Barbier says investors knew a second Phase III trial would be necessary. He says the analysts simply were looking for an excuse to bash the stock.
"We've had 85 meetings with investors this year during which we told them we would do two Phase III studies," he says. "Everyone knew this."
Howard Sutherland, general counsel at Unterberg, says the firm never bid on the underwriting deal. Mr. Trbovich adds that his research has long included expectations for just one Phase III trial for the drug. And Pain Therapeutics should have corrected him if it in fact planned on a second trial, he says.
"We thought the role and economics proposed by the company didn't justify our participation," a spokeswoman for Weisel says. "We wouldn't change our research position because we chose not to participate in the offering."
Some other investors support Mr. Barbier's view, saying it wasn't news to Wall Street that the company would need to prove the medication's efficacy with another trial. For one thing, they say more than one Phase III trial is common for these kinds of treatments. And investors say during the two-week "road show" in September, before the add-on stock sale, Mr. Barbier emphasized that a second trial would be necessary.
"They said there would be a second Phase III trial. To me, that didn't come as surprise," says Patrick Schnegelsberg, a portfolio manager at hedge fund Mehta Partners, which owns shares in Pain Therapeutics. "Even if they had told me they would only have one trial, I would have checked it out because that's a gray area. I don't think Pain Therapeutics misled anyone."
Despite the controversy, Mr. Barbier says he wants analysts to do more research on his company, rather than less.
He says Weisel "has ignored us, despite three material events at the company since Nov. 5."
Representatives of both firms say they continue to cover Pain Therapeutics
CEO对分析师秋后算帐
过去，如果首席执行长们认为华尔街股票分析师将投资银行业务授予竞争对手而有失公允的话，他们只能往肚子里咽苦水，但现在，他们开始进行反击。
生物技术公司Pain Therapeutics Inc.董事长兼首席执行长雷米?巴比尔(Remi Barbier)正在起诉两名华尔街分析师，指控这两人所在投资银行因未接获该公司的一些赚钱业务（承销该公司股票），而对该公司进行了责难。
分析师对该指控进行了反驳，但是巴比尔不依不饶，这个僵局被一些外部人士看作是证券业整顿以来股票分析师影响力下降的一个信号。
他认为投资银行业务和股票研究方面有直接的联系。华尔街的改变越大，分析师做的越少。
在这次摊牌之前，该公司在10月份召开了分析师电话会议。巴比尔在会议上表示，公司将对一个正在生产的药物进行第二次临床试验。
虽然一些投资者对这个消息早有准备，但是该消息仍然使C.E. Unterberg分析师肯?特尔博维奇(Ken Trbovich)下调Pain Therapeutics的股票评级，并将此归咎于该公司此前没有警告可能进行第二次临床试验。
在特尔博维奇下调该股评级以及Thomas Weisel Partners一位分析师发布警告言论之后，一直小幅攀升的Pain Therapeutics在仅仅几天内就下跌了38%，虽然之后略有反弹，但是从此次电话会议以来该股仍然累计下跌了大约16%。
特尔博维奇反驳了他对Pain Therapeutics的研究与他所在公司的银行业务有关的主张。C.E. Unterberg是一家保健行业投资银行。特尔博维奇还表示，Pain Therapeutics从来没有告知他将对名为Oxytrex的新药进行第二次临床试验。
特尔博维奇说，如果巴比尔在与分析师沟通方面花费和在公共关系方面同样多的时间，这些问题就不会出现。特尔博维奇是一名保健类股分析师，从今年4月份开始研究Pain Therapeutics的股票。
Weisel分析师唐纳德?埃利斯(Donald Ellis)发布了自己的研究报告，认为Pain Therapeutics的费用将因为新的试验而增长。埃利斯维持对该股与类股一致的评级，自从4月份制定新的评级制度以来，他对该股一直维持这个评级。
Thomas Weisel Partners研究部门共同负责人佩里?博伊尔(Perry Boyle)说，对该公司股票的研究和Thomas Weisel Partners银行业务之间没有任何联系。埃利斯拒绝置评。
从某种意义上说，Pain Therapeutics和其分析师之间的争执是一个熟悉的故事中的最新章节：长期以来公司抱怨分析师对其股票的负面评级，它们时常指出，负面评级是投资银行业务关系不利的结果。
但它们的抱怨往往在私下进行，因为担心自己的抱怨看起来好像是试图转移对一个不利报告的吸引力。
而现在不同了，公司更加趋于公开表示对分析师的不满情绪。今年4月几家华尔街公司和纽约州司法部长斯皮策(Eliot Spitzer)之间达成的14亿美元股票研究和解协议给了他们巨大的鼓舞。
华盛顿大学法学院(Washington University School of Law)院长塞利格曼(Joel Seligman)指出，这类不满情绪并不新鲜，但几年前公司管理层可能不敢公开表达类似的不满。
今年8月，花旗集团(Citigroup Inc., C)旗下美邦(Smith Barney)的一名分析师利特(Jonathan Litt)针对企业治理态度对多伦多一家房地产投资者曼可(Peter Munk)作出公开批评之后，曼可和Trizec Properties Inc.以诽谤、失职和非法干预经济关系等罪名将利特告上了法庭。当时，花旗为利特辩护称，Trizec的指控毫无依据。
Pain Therapeutics纠葛始于今年9月该公司增发5,000万美元股票的交易，该交易由花旗集团牵头进行。巴比尔称，这笔交易使得花旗集团获得150万美元的酬金。花旗集团对此未发表评论。
巴比尔称，特尔博维奇的公司希望参与这笔交易，但被拒绝，原因是巴比尔认为这家公司的规模太小。
巴比尔说，尽管Thomas Weisel Partners竭力要求参与该笔交易的牵头工作，但最后仅以联系牵头行身份得到了利润较低的业务。他说，Thomas Weisel因此打了退堂鼓。
一个月后的10月16日，在投资者和分析师电话会议上，Pain Therapeutics高层管理人士预期了公司前景，并提到需要对慢性疼痛治疗药物Oxytrex进行第二次第三阶段临床试验。
一天之后，特尔博维奇因该公司需要进行新试验而将该股长期评级从买进下调至与大盘一致。埃利斯也在报告中抓住新试验的消息不放。
巴比尔称，投资者知道进行需要进行第二次第三阶段临床试验。但是分析师只是在寻找借口抨击该股。
他说，公司今年已经与投资者召开了85次会议，会上通知了要做两次临床试验的消息。所有人都知道。
Unterberg总顾问萨瑟兰(Howard Sutherland)表示，这家投资银行从未寻求承销上述交易。特尔博维奇补充说，他的研究长期以来就只包括对该药进行一次第三阶段临床试验的预期，如果该公司事实上果真计划进行第二次试验，那早就应当纠正他的预期。
Weisel发言人称，公司认为Pain Therapeutics提出的作用和经济效果不足以吸公司参与承销。公司不会由于选择不参与承销而改变研究立场。
其他部分投资者支持巴比尔的观点，称该公司需要通过第二次临床试验来证明药物疗效对华尔街来说不是什么新闻。首先，这种药物通常需要进行一次以上的第三阶段临床试验。投资者还说，在增发股票之前的9月份，巴比尔在为时两周的巡回推介中强调必须进行第二次临床试验。
对冲基金公司Mehta Partners投资组合经理施内格尔贝格(Patrick Schnegelsberg)称，Pain Therapeutics宣布将进行第二次第三阶段临床试验。他不认为Pain Therapeutics曾误导任何人。施内格尔贝格持有该公司股票。
尽管纷扰不断，但巴比尔表示他仍希望分析师更多地研究他的公司，而不是更少。
他说，尽管11月5日之后该公司发生了三次具有重大意义的事件，但Weisel却视而不见。
两家公司代表均表示将继续跟踪研究Pain Therapeutics股票。
