Immunomedics' (NASDAQ:IMMU) planned presentation at the annual American Society of Clinical Oncology (ASCO) conference last week was canceled after ASCO discovered that data intended for ASCO had been disclosed by Immunomedics management in April. The data disclosure violated ASCO's strict policy on embargoing presentations, leading investors to rush for the exits. Could this drop in share price make this a good time to add shares to your portfolio?

In this segment of The Motley Fool's Industry Focus: Healthcare podcast, healthcare analyst Kristine Harjes is joined by contributor Todd Campbell to discuss what happened with Immunomedics last week and whether investors should buy shares.

A transcript follows the video.

This podcast was recorded on June 8, 2016. 

Kristine Harjes: Our first topic of the day, as I mentioned, is ASCO, which was the American Society of Clinical Oncology. They had their really important meeting where a lot of drug developers will present data and other interesting tidbits. It was held in Chicago.

You highlighted for me a loser and a couple of winners when we were talking before the show. Let's take the bad news first. That's generally my preference. You called out Immunomedics as a loser. Why?

Todd Campbell: This has got to be the strangest thing I've ever seen in years of following healthcare out of ASCO. Immunomedics is a small-cap company that's working on cancer drugs, right? Its shares had taken off earlier this year after ASCO had granted approval for it to make a presentation, an oral presentation on one of its drugs that treats triple-negative breast cancer. The presentation was supposed to go off on Friday. But on Thursday night, ASCO sent management a note saying, "Sorry. We're not going to let you present after all."

Harjes: That seems like it came pretty last minute. Did they not know going into it that they're going to say this?

Campbell: Well, what's weird about this, and I think that a lot of investors sold off shares on Friday not really fully understanding what ASCO was saying. What's interesting about this is that ASCO wasn't pulling the presentation because of, say, it didn't believe the efficacy or the validity of what Immunomedics was going to say. Instead, it was because of a, we'll call it, technical formality. In that, at ASCO, if you're going to present, we have very strict rules on embargoing information. Apparently, Immunomedics management outlined or detailed the information that it was scheduled to present at an industry conference in April that violated those embargo rules and, thus, they got yanked.

Harjes: Interestingly, the results were actually not that great that the company did eventually present. The stock was down 14% on Friday just due to this formality. Then later, you had fairly disappointing results, and it went down even further. But the fact that many people dropped out due to what's essentially just an asterisk on the rules signals to me that ASCO is used by a lot of short-term traders as this big catalyst event where you bid up shares beforehand hoping for a big news. Then you'll profit on the news. That's just not very Foolish to me.

Campbell: No. If this teaches investors or reminds investors of any lessons, I think this is saying more about short-term trading than it's saying about anything else -- the quality of the drug, or investing in biotech, or anything. As is usually the case when it comes to investing, buy the rumor, sell the news. Well, people bought ahead of the potential for a post-ASCO pop. Of course with no ASCO presentation, there was no pop. So they bailed and went on to look for other ideas.

That being said, I don't think that this is necessarily a stock that people want to bargain-hunt. It's got a negative book value. It's got a little bit of cash, but it's got more debt than it has cash. It's got a drug that's intriguing that it looks like it works pretty well in pretreated patients with triple-negative breast cancer, but it's still uncertain when they could file and if the FDA would accept that filing earlier, not when it could eventually even reach the market, if it does.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.