Pharmaceutical filing citing a Hepatology Communications paper — Lipocine, 2020-09-21
LipocineLipocineNASDAQ LPCN
Filings SEC · Quote Yahoo cited a paper published in Hepatology Communications in a regulatory filing with the U.S. Securities and Exchange CommissionU.S. Securities and Exchange Commission
Regulator · Website as a basis for its claims. The company read the manner in which it wrote the paper and the actual scope of the paper in sequence. It recorded where the stock price movement over the following month compared to past cases of the same type. This is a hindsight judgment written after knowing the results. The paper was read only up to the abstract.
The disclosure wrote the paper in the press release like this
When a U.S. listed company has something to inform shareholders, the report filed with the Securities and Exchange Commission is called 8-K. The item numbers of the document submitted by Lipocine on 2020-09-21 were 8.01 Other Events · 9.01 Financial Statements and Exhibits. The company cited a paper published in Hepatology Communications in the attached press release. The sentence citing the paper, copied verbatim from the original, is as follows.
Jang, World Journal of Gastroenterology, 2015; Sinclair et al., Journal of Gastroenterology and Hep ato logy (Australia), 2016; Moctezuma - Velazquez et al., Clinical Nutrition, 2018.; Sinclair et al., World Journal of Gastroenterology, 2017.
What readers should look at first is where the company placed the paper in the press release. Next, they should determine whether the paper supports the entire company claim or only a part of it. To answer the latter question, one must read the full paper. This article, which only read the abstract, cannot provide an answer.
The scope of the paper discussed in the abstract is limited to this.
The paper title is LPCN 1144 Resolves NAFLD in Hypogonadal Males and it was published in Hepatology Communications on 2020-08-02. The authors' affiliations are Virginia Commonwealth University · Lipocine (United States) · University of Chicago. The summary at the beginning of the paper is called Abstract. This article only read up to there. This paragraph was rewritten by a person after filtering a draft written by a machine reading the abstract through numerical comparison, so it is a different grade from a full-text reading and original judgment.
It is data from a single-group open trial of a testosterone precursor drug given to men with low testosterone levels, where liver fat was measured multiple times using magnetic resonance imaging among 36 participants. Two out of three people had liver fat levels exceeding the standard at the start, which would be considered fatty liver. Most of them saw a reduction in liver fat, and nearly half no longer met the fatty liver criteria by week 16. There were no major side effects. Since this is data from a small, non-controlled study, this paper cannot determine whether the improvement was due to the drug or natural recovery over time.
The abstract does not answer; it remains in the main text and the appendix. This text, which does not go there, leaves the blank as it is. Readers compare the two citations above to determine which sentence in the abstract corresponds to the excerpt cited by the company.
One month later, the stock price was within the bottom quarter of the sample.
The excess return is the portion of return that remains after subtracting the part that moves with the entire market. The date is written as excess return using trading days, counting only the days the stock market is open. In terms of the calendar, 20 trading days are approximately one month. The excess return on the day of the regulatory filing and for the following month are listed in the table below.
| Period | Excess return relative to the market | Meaning |
|---|---|---|
| 5 trading days before the filing | +26.2% | The extent to which it had already moved before the filing |
| regulatory filing day | +1.9% | filing day or the first trading day thereafter |
| +1~+5 trading day cumulative | −11.2% | one week |
| +1~+20 trading day cumulative | −20.1% | one month |
A bundle of past cases of the same type is called a sample. The position counted from the bottom is expressed as a percentile. The one-month excess return of -20.1% in this case is in the bottom quarter, which is the 25% position from the bottom among 142 samples.
| sample scale (20 trading days) | Tenth from the bottom | Fourth from the bottom | median | top 25% | top 10% | this case |
|---|---|---|---|---|---|---|
| excess return | −31.9% | −20.1% | −6.9% | +5.5% | +19.5% | −20.1% |
Half of the sample falls between the two middle marks in the table. Check the table to see whether this case falls inside or outside of that range. The sample consists of cases where U.S.-listed companies cited papers in 8-K filings over the past decade. The company itself is excluded from the sample. The numbers listed here are historical facts, not rules to apply to future cases.
The same company had three additional cases where papers were mentioned in 8-K filings, which are included in the table below.
| Filing date | The journal of the paper | Excess return in one month |
|---|---|---|
| 2020-08-03 | Hepatology Communications | −10.3% |
| 2020-09-14 | Hepatology Communications | +4.1% |
| 2021-03-04 | Journal of Endocrinological Investigation | +8.7% |
After the filing, the company issued this document
After the filing date, the company issued three 8-K filings. Only the item numbers are listed here. In 8-K filings without titles, the item numbers indicate the type of content. Whether it was an earnings announcement or a contract can be identified by the number. The specific event can be read in the original text of each link.
- 2020-10-05 8-K Item 8.01, 9.01 — Other Events · Financial Statements and Exhibits
- 2020-10-13 8-K Item 8.01, 9.01 — Other Events · Financial Statements and Exhibits
- 2020-10-14 8-K Item 8.01, 9.01 — Other Events · Financial Statements · Exhibits
What This Article Does Not Answer
This article, which reads only abstracts, cannot answer what method the paper used, what it reviewed, or how far it showed. How many times the paper cited by the company was cited afterward can be checked again through the OpenAlexOpenAlex
Data source · Website citation count. What will be seen next is whether the company's next 8-K again cites the same paper.
Glossary
- 8-K
- A voluntary report submitted to the U.S. Securities and Exchange Commission when a listed company has something to inform shareholders. It is categorized by item numbers such as earnings, contracts, and executive changes. All events in this article come from this document.
- Excess Return
- The remainder after subtracting the overall market return from the stock return. It is used to see the movement of the company alone by removing the portion where the market as a whole rose or fell.
- trading day
- a count of days when the stock market is open. weekends and holidays are excluded, so 20 trading days are about a calendar month.
- sample and percentile
- A bundle of past cases of the same type is a sample, and the position from the bottom is expressed as a percentile. A percentile of 10 means that nine out of ten cases performed better than this case.
- abstract
- a summary placed at the beginning of a paper. the author writes in a few sentences what was done, how it was done, and what was found. without reading the full text, details and limitations of the method cannot be known.