Market efficiency reloaded: why insider trades do not reveal exploitable information

Insider trading studies related to the German market have emphasized that outside investors may earn excess returns by mimicking the transactions of corporate directors. Such a result, provided that it holds, would constitute a serious violation of the efficient market hypothesis. The results presented in this paper, though, show that this anomaly is mainly caused by a subset of stocks with high arbitrage risk as measured by their idiosyncratic volatility. This restrains arbitrageurs from engaging in otherwise profitable and price-correcting trades. As arbitrage risk is positively related to a stock's bid/ask-spread, we show that the information conveyed by insider trades cannot be exploited in terms of generating abnormal returns once these transaction costs are taken into account. We conclude that the market's under-reaction to reported insider trades can mainly be explained by the cost associated with risky arbitrage. Our findings provide evidence that the German stock market is efficient with respect to insider trades in the sense that prices reflect publicly available information to the point where the marginal benefit of acting on information exceeds marginal costs. --Insider Trading,Directors' Dealings,Arbitrage Risk,Market Efficiency

EGFR binding Fc domain-drug conjugates: stable and highly potent cytotoxic molecules mediate selective cell killing

The exposition of cancer cells to cytotoxic doses of payload is fundamental for the therapeutic efficacy of antibody drug conjugates (ADCs) in solid cancers. To maximize payload exposure, tissue penetration can be increased by utilizing smaller-sized drug conjugates which distribute deeper into the tumor. Our group recently explored small human epidermal growth factor receptor 2 (HER2) targeting Fc antigen binding fragments (Fcabs) for ADC applications in a feasibility study. Here, we expand this concept using epidermal growth factor receptor (EGFR) targeting Fcabs for the generation of site-specific auristatin-based drug conjugates. In contrast to HER2-targeting Fcabs, we identified novel conjugation sites in the EGFR-targeting Fcab scaffold that allowed for higher DAR enzymatic conjugation. We demonstrate feasibility of resultant EGFR-targeting Fcab-drug conjugates that retain binding to half-life prolonging neonatal Fc receptor (FcRn) and EGFR and show high serum stability as well as target receptor mediated cell killing at sub-nanomolar concentrations. Our results emphasize the applicability of the Fcab format for the generation of drug conjugates designed for increased penetration of solid tumors and potential FcRn-driven antibody-like pharmacokinetics

Market Efficiency Reloaded: Why Insider Trades do not Reveal Exploitable Information

Several studies have emphasized a slow price adjustment to reported insider trades for Germany. The results presented in this paper, though, show that this is mainly caused by a subset of high arbitrage risk stocks. In fact, the abnormal return difference between the quintiles of stocks with highest and lowest idiosyncratic risk is in the range of 2.99-4.90% over a 20-day interval. These results are robust even in the context of a joint generalized least squares approach. By developing a simple zero-investment arbitrage trading strategy mimicking insider trades, it turns out that such a trading strategy, in most cases, generates significant positive returns as long as transaction costs are neglected. However, the outperformance disappears in all risk quintiles, if bid/ask spreads are taken into account. We conclude that the market's under-reaction to reported insider trades can mainly be explained by the cost of risky arbitrage and is therefore not exploitable. Copyright 2009 The Authors. Journal Compilation Verein für Socialpolitik and Blackwell Publishing Ltd. 2009.

Self-Assembled Hybrid Aptamer-Fc Conjugates for Targeted Delivery: A Modular Chemoenzymatic Approach

Over the past decade, DNA and RNA aptamers have attracted keen research interest due to their ability to specifically bind targets of therapeutic relevance. However, their application is often hampered by a short serum half-life and missing effector functions. Conjugation of aptamers to antibody Fc fragments could improve pharmacokinetics, enable immune effector mechanisms, and provide an option for the introduction of desired payloads (e.g., toxins or fluorescent dyes). We developed a modular scaffold-supported system based on human IgG1 Fc fragments, which allows for its dual functionalization with moieties of interest. In our approach, two bioorthogonal, enzyme-mediated reactions were used in combination with oxime ligation and self-assembly based on PNA–DNA base pairing. Thus, an engineered synthetic peptide nucleic acid (PNA) oligomer was coupled to the <i>C</i>-termini of the Fc dimer upon sequence-specific sortase A-mediated transpeptidation. Hybridization of the resulting Fc-PNA conjugate with a tailored DNA aptamer that binds cancer-related hepatocyte growth factor receptor (c-MET) led to a hybrid construct which showed strong and specific binding to c-MET and was readily internalized by c-MET-overexpressing cells. To install an additional orthogonally addressable site, aldehyde tag technology was applied followed by oxime ligation with an aminooxy-bearing fluorescent dye as model cargo. Delivery of fluorescent probe specifically to c-MET-overexpressing cells was confirmed by flow cytometry. Our approach can provide access to engineered aptamer-Fc conjugates with desired target specificity and cytotoxic payloads

A Generic Approach for Miniaturized Unbiased High-Throughput Screens of Bispecific Antibodies and Biparatopic Antibody–Drug Conjugates

The toolbox of modern antibody engineering allows the design of versatile novel functionalities exceeding nature’s repertoire. Many bispecific antibodies comprise heterodimeric Fc portions recently validated through the approval of several bispecific biotherapeutics. While heterodimerization methodologies have been established for low-throughput large-scale production, few approaches exist to overcome the bottleneck of large combinatorial screening efforts that are essential for the identification of the best possible bispecific antibody. This report presents a novel, robust and miniaturized heterodimerization process based on controlled Fab-arm exchange (cFAE), which is applicable to a variety of heterodimeric formats and compatible with automated high-throughput screens. Proof of applicability was shown for two therapeutic molecule classes and two relevant functional screening read-outs. First, the miniaturized production of biparatopic anti-c-MET antibody–drug conjugates served as a proof of concept for their applicability in cytotoxic screenings on tumor cells with different target expression levels. Second, the automated workflow enabled a large unbiased combinatorial screening of biparatopic antibodies and the identification of hits mediating potent c-MET degradation. The presented workflow utilizes standard equipment and may serve as a facile, efficient and robust method for the discovery of innovative therapeutic agents in many laboratories worldwide