Pharmaceutical filing citing a Journal of the Endocrine Society paper — Lumos Pharma, 2021-03-09
Lumos PharmaLumos PharmaUS LUMO
cited a paper published in the Journal of the Endocrine Society in its 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 the paper demonstrated 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 was written in the press release as follows:
When a U.S.-listed company has something to inform shareholders, it submits a 8-K to the Securities and Exchange Commission. The item number of the document submitted by Lumos Pharma on 2021-03-09 was 2.02 Earnings announcement · 9.01 Financial statements · Attached documents. The company cited a paper published in Journal of the Endocrine Society in the press release attached to it. If the sentence citing the paper is translated verbatim, it reads as follows:
The press release did not automatically identify the sentence citing the paper. Check the original link. Do not replace it with another paragraph.
What the reader first sees is where the company placed the paper in the press release. Next, the reader must determine whether the paper supports the company's entire claim or only a part of it. To answer the latter question, one must read the full paper. This article, having read only the abstract, cannot provide that answer.
The scope of the paper discussed in the abstract is limited to this point.
The paper's title is Corroboration of Height Velocity Prediction Markers for rhGH With an Oral GH Secretagogue Treatment in Children With GHD, and it was published in Journal of the Endocrine Society on 2021-02-25. The authors are affiliated with Justus-Liebig-Universität Gießen · Lumos Pharma (United States) · Wake Forest University. The summary at the beginning of the paper is referred to as abstract. This article read only up to that point. This paragraph was written by a person after filtering a machine-generated draft by numerical comparison; it is of a different quality than a full reading of the paper.
This study re-examined existing data to determine whether a pill could be used instead of injections for children with growth hormone deficiency. Injection therapy works best for children with severe deficiency. The background assumption is that pills may be suitable for those with moderate deficiency. The relationship between pre-treatment IGF-I levels and the peak growth hormone response from stimulation tests in predicting height growth velocity after twelve months was assessed in 514 children from a historical database. Since this is an analysis of historical data, the paper does not confirm whether the pill is actually effective.
The sections and appendices remain where the abstract does not answer. This text, not reaching there, leaves blanks as blanks. Readers compare the two citations above to determine which sentence in the abstract corresponds to the excerpt cited by the company.
A month later, the stock price was within the middle half of the sample.
The remaining return after subtracting the portion attributable to market-wide movement is called excess return. Dates are recorded as trading days, counting only days when the stock market is open. In calendar terms, 20 trading days amount to roughly a month. The excess return for the day of the regulatory filing and the following month is presented in the table below.
| Period | Excess return relative to the market | Meaning |
|---|---|---|
| Five trading days before the filing | −7.6% | Degree of movement before the filing |
| Filing day | −4.8% | Filing day or the first trading day following |
| +1~+5 trading days cumulative | −6.8% | one week |
| +1~+20 trading days cumulative | −5.0% | 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 −5.0% in this case is within the bottom 55% of the 142 cases in the sample, placing it in the lower half.
| 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% | −7.4% | +5.5% | +19.5% | −5.0% |
Half of the sample falls between the two central marks in the table. One checks from the table whether this case falls inside or outside. The sample collects cases where U.S. listed companies wrote papers in 8-K filings over the past ten years. The company itself is excluded from the sample. The numbers written here are past facts, not rules applicable to future cases.
After the regulatory filing, the company issued such documents
After the disclosure date, the company filed three 8-Ks. Here are only the item numbers. In 8-Ks without titles, the item numbers indicate the type of content. Whether it was an earnings announcement or a contract can be determined by the number. To learn what exactly happened, read the original text at each link.
- 2021-03-23 8-K Item 8.01,9.01 — Other Events · Financial Statements · Exhibits
- 2021-04-14 8-K Item 8.01,9.01 — Other Events · Financial Statements · Exhibits
- 2021-04-21 8-K Item 5.02,7.01,9.01 — Officer · Director Changes · Reg FD Public Disclosure · Financial Statements · Exhibits
What this article did not answer
This article, based only on abstracts, cannot answer what methods the paper used, what it re-evaluated, or to what extent it demonstrated results. How many times the paper cited by the company was cited afterward can be re-verified through the citation count on OpenAlexOpenAlex
Data source · Website. The next thing to check is whether the company's next 8-K again cites the same paper.
Glossary
- 8-K
- A spontaneous report submitted to the U.S. Securities and Exchange Commission when a listed company has something to inform shareholders. The type is indicated by item numbers such as earnings, contracts, and executive changes. All events in this article come from this document.
- Excess return
- The remainder obtained by subtracting the market's overall return from the stock's return. It is used to observe the company's unique movement after removing the portion attributable to the market's collective rise or fall.
- Trading day
- A count of days when the stock market is open. Weekends and holidays are excluded, so 20 trading days correspond to approximately one calendar month.
- Sample and percentile
- A bundle of past cases of the same type is a sample, and the position from the bottom within it 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 results were obtained. Without reading the full text, one cannot know the details and limitations of the methods.