November 10, 2022 8:43am
Reaction and response, a volatile yet mobile sector is better for investors.
Earnings: Solid Biosciences (SLDB), a Q3 net loss of -$20.4 million or N/A per share with a cash position of $142.2 million and a 2024 runway.
News: Avrobio (AVRO) filed an S-3 for $250 million common stock, preferred stock, debt securities, warrants and unit offering within draft prospectus by Cowen as stock sinks while delisting continues? Just another “screw-job” of investors! < Read, SELL and Weep - see hyperlink below>
Indications: 1 SELL, 2 Positive Indications, 1 Negative Indication, and 1 Pump/Promote
A daily report may say little or a lot and its final judgement may be inconclusive; yet it serves as insurance that all indications are being examined and evaluated.
Why do I keep writing this blog/newsletter to inform investors, what they need to hear that others won’t say or write! Insight is about understanding perception and also about putting into context what is relevant to expectation fulfillment
8:45 a.m. edition
Remember that overnight and pre-open actions in futures don't necessarily translate into actual trading in the coming day’s session.
Dow futures are UP +1.88% or (+613 points), S&P futures are UP +2.47% or (+93 points) and NASDAQ futures are UP +3.32% or (+359 points) early in the pre-open – so far,
Stock futures creeped higher Thursday as investors wait for CPI numbers,
European markets were slightly lower,
Asia-Pacific markets were mixed
Henry’omics:
Indexes were lower on Wednesday — following recent market gains — as results of the midterm elections provided no clear answers about who would control Congress yet.
The Dow closed DOWN -646.89 points (-1.95%), the S&P closed DOWN -79.54 points (-2.08%) while the Nasdaq closed DOWN -263.02 points (-2.48%)
Economic Data Docket: CPI is lighter than expected...
- The consumer price index, a broad-based measure of goods and services costs, rose just 0.4% for the month and 7.7% from a year ago. That was its lowest annual increase since January. Economists were expecting increases of 0.6% and 7.9%, according to Dow Jones. Excluding volatile food and energy costs, so-called core CPI increased 0.3% for the month and 6.3% on an annual basis, also less than expected.
Wednesday’s (11/9) … RegMed Investors’ (RMi) closing bell: “down sliding markets and sector responds to incomplete election results” … https://www.regmedinvestors.com/articles/12692
Avrobio (AVRO) files S-3 (Registration Statement) for offering with draft prospectus by Cowen … https://investors.avrobio.com/node/9116/html
Ebb and flow:
Q4 – November - 6 negative and 2 positive closes
· October -1 neutral, 11 positive and 9 negative closes
Q3/22 –
· September – 1 holiday, 10 positive and 11 negative closes
· August – 1 neutral, 11 positive and 11 negative closes
· July - 1 holiday, 10 negative and 10 positive closes
Companies in my headlights – It’s your decision; I provide ideas and context: INDICATIONS
SELL:
Avrobio (AVRO) closed down -$0.0154 to $0.65 after Tuesday’s +$0.0061 to $0.66 after Monday’s +$0.0079 to $0.65 with a negative -$0.03 or -3.93% pre-open indication with earnings release with a net loss of -$23 million or -$0.52 per share and a cash position of $116 million with a runway until Q4/23. Notice the filing of an S-3 (11/8/22) with a draft prospectus by Cowen – a screw-job for early and present investors – they are being wiped-out by management! Check website!
Negative Indications:
uniQure NV (QURE) closed down -$0.70 to $18.53 after Tuesday’s +$0.37 and Monday’s -$0.38 with a negative -$0.43 or -2.32% pre-open indication.
Positive Indications:
Sage Therapeutics (SAGE) closed down -$1.71 to $32.20 after Tuesday’s +$0.03 with a positive +$0.33 or +1.02% pre-open indication after earnings.
Verve therapeutics (VERV) closed down -$0.87 to $19.71 with a positive +$0.60 or +3.04% pre-open indication.
Puff/Pump and Promote: Maintaining SELL
Biostage (OTCQB: BSTG) closed down -$0.01 with 314 shares traded +$0.76 with 1,880 shares traded after Friday’s +$0.01 with 2,953 shares traded, Thursday’s -$0.09 with 800 shares traded, Wednesday’s -$0.05 with 100 shares traded, and last Tuesday’s flat with 963 shares traded following the previous Monday’s -$0.85 with 2,100 shares traded <3-month average = 2,446 shares>
A DRAFT prospectus is filed … SEC Form S-1/A …https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=117017206&type=HTML&formType=S-1%2FA&dateFiled=2022-10-27&cik=0001563665&CK=1563665&symbol=0001563665&companyName=Biostage . Questions arise as to draft prospectus statement of non-reliance of past financials? Hey, CFO Joe some of us have copies of lost “payables”?
The BOTTOM LINE: The sector suffered significant damage this past week and on Monday and Wednesday with share pricings tumbling.
Reiterating, “I try to keep it simple … and short …
What changes … “No one company is immune in the sector and this market of rolling downdrafts?”
Reiterating, “Kenny Storch at BTIG, states there are 226 public biotech companies trading below cash currently; with 1 out of 5 in the Nasdaq Biotech Index trading below cash.”
Is it a sign of the times for a few gene therapy companies to end-up like RUBY (Rubius Therapeutics – seeking “strategic alternatives”, AGTC – running out of money – getting acquired by shell, AVRO and VSTM with delisting hanging over their head like a sword of Damocles (?) or BEAM (Beam Therapeutics (dropping trial) or even Verve Therapeutics (VERV) getting IND halted by FDA. Faze Medicines, a neuroscience-focused startup that spun out of Third Rock Ventures in late 2020, is winding down. Clovis Oncology, a maker of cancer drugs, will likely file for bankruptcy protection due to dwindling sales of its sole product, mounting financial losses, and a crushing debt load.
WHO or WHICH are NEXT …?
CEO salaries, spending within G&A are totally OUT-OF-WHACK; these are companies in early development stages and will be for years without products in most cases not like the tech companies, whose CEOs and management teams think sector management teams should be compared to for bi-weekly cash and “beanies”!
We will be seeing what November brings – Q3 earnings LPS (loss-per-share) season and a whole lot of economic indicators.
Q4 is HERE and we are back into Q3 earnings season which could be a minefield:
· Still more on way to be announced.
Investors are still struggling … to HOLD-on for sector share pricing direction and wanted clarity of guidance in earnings … and TRIALS that are to begin in earnest
If you have gains, you might want to lock-in profit (if any) … before earnings season begins!
Sentiment sensitive cell and gene therapy stocks are especially vulnerable.
DISPOSE of Avrobio (AVRO) who experiences news and the stock drops after a de-listing notice while the management DID NOTHING to AVOID this dilemma while president, CEO and director Geoff Mackay carries home a HUGE salary of $754.39 K per year?
· AVRO is NOT close to the $1.00 to continue its Nasdaq listing after a delisting notice.
· Where is the upside coming from to “solve” the de-listing “position” on Nasdaq?
· AVRO has filed a DRAFT S-3 prospectus to “commission" an OFFERING by Cowen to address its delisting?
· Let’s NOT forget … AVRO’s 52nd session under $1.00 i.e., delisted
Isn’t this Verastem Oncology’s (VSTM dived -$0.0251 to $0.37 after Tuesday’s +$0.0107 to $0.409, Monday’s +$0.0010 to $0.39 and last Friday’s -$0.0088); its 34th session of being UNDER $1.00 heading for de-listing under Nasdaq.
· When it comes time to invest or even hold onto an investment; I’d say … focus on what percentage ownership of stock … NOT options CEOs and management teams own versus their salary and bonus.
Amid the ongoing cell and gene therapy sector volatility, “our” universe’s trend remains " in a constant correction." That means that investors are safer on the sidelines as again … earnings are coming.
My guide to 'good news seems to be bad news' and 'bad news is good news. 'In normal times, no one really questions whether good news in the economy is actually good.
Opinions expressed are those of the author and are subject to change, and not intended to be a forecast of future events, a guarantee of future results, nor investment advice.
All investments are subject to risks. Investors should consider investment objectives.
Regulation Analyst Certification (Reg AC): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions securities referred to in this publication.
