Charles M. C. Lee

Recurrent gene fusions in prostate cancer

The discovery of recurrent gene fusions in a majority of prostate cancers has important clinical and biological implications in the study of common epithelial tumours. Gene fusion and chromosomal rearrangements were previously thought to be primarily the oncogenic mechanism of haematological malignancies and sarcomas. The prostate cancer gene fusions that have been identified thus far are characterized by 5′ genomic regulatory elements, most commonly controlled by androgen, fused to members of the Ets family of transcription factors, leading to the overexpression of oncogenic transcription factors. Ets gene fusions probably define a distinct class of prostate cancer, and this might have a bearing on diagnosis, prognosis and rational therapeutic targeting.

Earnings news and small traders: An intraday analysis

Abstract This study separates trading volume into buyer- and seller-initiated activities and examines the directional volume reaction in small and large trades to different types of earnings news. ‘Good’ (‘bad’) news triggers brief, but intense, buying (selling) in the large trades. However, a persistent period of unusually high buying activity is observed in the small trades irrespective of the news. This anomalous proclivity of small traders to buy is robust across firm size, trading volume, and different earnings expectation models. Several explanations are discussed, although the behavior does not seem fully explained by existing theories.

Inferring investor behavior: Evidence from TORQ data

Abstract We use a unique dataset (TORQ) to calibrate several techniques commonly used to infer investor behavior from transactions data. Specifically, we evaluate the Lee–Ready (1991) Journal of Finance 46, 733–746) algorithm for distinguishing trade direction, and we examine the use of trade size as a proxy for trader identity. We find that, due to complexities in the NYSE auction process, up to 40% of reported trades cannot be unambiguously classified as either buyer- or seller-initiated. However, for those trades that can be classified, the Lee–Ready algorithm is 93% accurate. In addition, we construct a firm-specific trade size proxy that is highly effective in separating the trading activities of individual and institutional investors. These findings should be useful to researchers interested in inferring trader sophistication and buy/sell direction from transactions data.

Who Is My Peer? A Valuation‐Based Approach to the Selection of Comparable Firms

This study presents a general approach for selecting comparable firms in market‐based research and equity valuation. Guided by valuation theory, we develop a “warranted multiple” for each firm, and identify peer firms as those having the closest warranted multiple. We test this approach by examining the efficacy of the selected comparable firms in predicting future (one‐ to three‐year‐ahead) enterprise‐value‐to‐sales and price‐to‐book ratios. Our tests encompass the general universe of stocks as well as a sub‐population of so‐called “new economy” stocks. We conclude that comparable firms selected in this manner offer sharp improvements over comparable firms selected on the basis of other techniques.

Market Efficiency and Accounting Research: A Discussion of 'Capital Market Research in Accounting' by S.P. Kothari

Much of capital market research in accounting over the past 20 years has assumed that the price adjustment process to information is instantaneous and/or trivial. This assumption has had an enormous influence on the way we select research topics, design empirical tests, and interpret research findings. In this discussion, I argue that price discovery is a complex process, deserving of more attention. I highlight significant problems associated with a na.ıve view of market efficiency, and advocate a more general model involving noise traders. Finally, I discuss the implications of recent evidence against market efficiency for future research. r 2001 Elsevier Science B.V. All rights reserved. JEL classification: M4; G0; B2; D8

Contextual Fundamental Analysis Through the Prediction of Extreme Returns

This study examines the usefulness of contextual fundamental analysis for the prediction of extreme stock returns. Specifically, we use a two-stage approach to predict firms that are about to experience an extreme (up or down) price movement in the next quarter. In the first stage, we define the context for analysis by identifying extreme performers; in the second stage we develop a context-specific forecasting model to separate winners from losers. We show that extreme performers share many common market-related attributes, and that the incremental forecasting power of accounting variables with respect to future returns increases after controlling for these attributes. Collectively, these results illustrate the usefulness of conducting fundamental analysis in context.

Capital market governance: How do security laws affect market performance?

This paper examines the link between capital market governance (CMG) and several key measures of market performance. Using detailed data from individual stock exchanges, we develop a composite CMG index that captures three dimensions of security laws: the degree of earnings opacity, the enforcement of insider laws, and the effect of removing short-selling restrictions. We find that improvements in the CMG index are associated with decreases in the cost-of-equity capital (both implied and realized), increases in market liquidity (trading volume, market depth, and U.S. foreign investments), and increases in market pricing efficiency (reduced price synchronicity and IPO underpricing). The results are quite consistent across individual components of CMG and over alternative market performance measures.

Genetic variation of genes involved in dihydrotestosterone metabolism and the risk of prostate cancer.

Purpose: Dihydrotestosterone (DHT) is an important factor in prostate cancer (PCA) genesis and disease progression. Given PCAs strong genetic component, we evaluated the possibility that variation in genes involved in DHT metabolism influence PCA risk. Experimental Design: We investigated copy number variants (CNV) and single nucleotide polymorphisms (SNP). We explored associations between CNV of uridine diphospho-glucuronosyltransferase (UGT) genes from the 2B subclass, given their prostate specificity and/or involvement in steroid metabolism and PCA risk. We also investigated associations between SNPs in genes (HSD3B1, SRD5A1/2, and AKR1C2) involved in the conversion of testosterone to DHT, and in DHT metabolism and PCA risk. The population consisted of 426 men (205 controls and 221 cases) who underwent prostate-specific antigen screening as part of a PCA early detection program in Tyrol, Austria. Results: No association between CNV in UGT2B17 and UGT2B28 and PCA risk was identified. Men carrying the AA genotype at SNP rs6428830 (HSD3B1) had an odds ratio (OR) of 2.0 [95% confidence intervals (95% CI), 1.1-4.1] compared with men with GG, and men with AG or GG versus AA in rs1691053 (SRD5A1) had an OR of 1.8 (95% CI, 1.04-3.13). Individuals carrying both risk alleles had an OR of 3.1 (95% CI, 1.4-6.7) when compared with men carrying neither (P = 0.005). Controls with the AA genotype on rs7594951 (SRD5A2) tended toward higher serum DHT levels (P = 0.03). Conclusions: This is the first study to implicate the 5α-reductase isoform 1 (SRD5A1) and PCA risk, supporting the rationale of blocking enzymatic activity of both isoforms of 5α-reductase for PCA chemoprevention. Cancer Epidemiol Biomarkers Prev; 19(1); 229–39

Tunneling in China: The Surprisingly Pervasive Use of Corporate Loans to Extract Funds from Chinese Listed Companies

This study documents the widespread use of corporate loans by controlling shareholders to extract funds from Chinese listed companies. Typically reported as Other Receivables (OREC), these loans represent a substantial portion of the reported assets of Chinese firms. We show that companies with large OREC balances experience worse future operating performance and are much more likely to become candidates for delisting. High-OREC firms have generally lower market valuations, but still earn negative risk-adjusted returns in the future. Consistent with prior studies, this form of tunneling is most severe when the block shareholders controlling right (C) is significantly larger than her ownership right (O). Auditors appear to play a monitoring role, but absent effective regulatory enforcement action, unclean audit opinions alone seem insufficient to deter tunneling behavior.

Isoliquiritigenin Induces Apoptosis and Inhibits Xenograft Tumor Growth of Human Lung Cancer Cells by Targeting Both Wild Type and L858R/T790M Mutant EGFR

Background: Non-small-cell lung cancer (NSCLC) exhibits EGFR mutation. Results: Treatment with isoliquiritigenin (ILQ) inhibited growth and induced apoptosis in tyrosine kinase inhibitor-sensitive and -resistant NSCLC cells. ILQ suppressed wild type and mutant (L858R/T790M) EGFR kinase activity and attenuated H1975 lung cancer cell xenograft tumor growth. Conclusion: ILQ directly targets wild type or mutant EGFR. Significance: ILQ could be a potential therapeutic agent against NSCLC. Non-small-cell lung cancer (NSCLC) is associated with diverse genetic alterations including mutation of epidermal growth factor receptor (EGFR). Isoliquiritigenin (ILQ), a chalcone derivative, possesses anticancer activities. In the present study, we investigated the effects of ILQ on the growth of tyrosine kinase inhibitor (TKI)-sensitive and -resistant NSCLC cells and elucidated its underlying mechanisms. Treatment with ILQ inhibited growth and induced apoptosis in both TKI-sensitive and -resistant NSCLC cells. ILQ-induced apoptosis was associated with the cleavage of caspase-3 and poly-(ADP-ribose)-polymerase, increased expression of Bim, and reduced expression of Bcl-2. In vitro kinase assay results revealed that ILQ inhibited the catalytic activity of both wild type and double mutant (L858R/T790M) EGFR. Treatment with ILQ inhibited the anchorage-independent growth of NIH3T3 cells stably transfected with either wild type or double-mutant EGFR with or without EGF stimulation. ILQ also reduced the phosphorylation of Akt and ERK1/2 in both TKI-sensitive and -resistant NSCLC cells, and attenuated the kinase activity of Akt1 and ERK2 in vitro. ILQ directly interacted with both wild type and double-mutant EGFR in an ATP-competitive manner. A docking model study showed that ILQ formed two hydrogen bonds (Glu-762 and Met-793) with wild type EGFR and three hydrogen bonds (Lys-745, Met-793, and Asp-855) with mutant EGFR. ILQ attenuated the xenograft tumor growth of H1975 cells, which was associated with decreased expression of Ki-67 and diminished phosphorylation of Akt and ERK1/2. Taken together, ILQ suppresses NSCLC cell growth by directly targeting wild type or mutant EGFR.