Futures are volatile with a lower open expected ...

February 9, 2016 6:38am

RegMed’s open – Bubbles go up very slowly ,then fear hits, and they burst abruptly  

Tuesday’s lucky and unlucky sevens (7) indications. Subscribe … http://www.regmedinvestors.com/create-account ...  

Leave no post unread, you’ll never know what you have missed if we have been writing about "which" company especially as quarterly financial results start being announced!  

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors before the sector and markets open.   

DOW futures are DOWN -0.3% and NASDAQ futures are DOWN -0.2%.

U.S. stock index futures were volatile Tuesday, struggling to shake off a global selloff, as investors waited for jobs data for clues ahead of Federal Reserve chief Janet Yellen’s testimony this week.

European stocks seesawed in a choppy morning of trade as investors remain cautious about global economic growth prospects. The pan-European STOXX 600 was seesawing throughout the morning. The DAX was flat after December German industrial output fell 1.2% month-on-month, according to the country's Economy Ministry.

Australian and Japanese markets closed sharply lower on Tuesday, after another sell-off in U.S. and European stocks overnight as many Asian markets remained shut down for the Lunar New Year.  China and Taiwan are closed for the week, while markets in Hong Kong, Singapore, South Korea, Malaysia and Vietnam are closed today.

Data docket: The only U.S. data of note out on Tuesday is wholesale inventories and JOLTS (Job Openings and Labor Turnover Survey), both for December and out at 10 a.m. ET.

·         President Barack Obama's Federal budget for the fiscal year of 2017 will be published at 11 a.m. Proposals include a $10-a-barrel tax on crude oil, but may garner little attention given the presidential election scheduled for November.

The stem, cell and gene therapy RegMed sector closed NEGATIVE on Monday and Friday, POSITIVE on Thursday, NEGATIVE on Wednesday and last Tuesday.

Past five (5) days (of 43 covered companies):

·         Monday closed NEGATIVE with 36 decliners, 3 advancers and 4 flats

·         Friday closed NEGATIVE with 32 decliners, 9 advancers and 3 flats;

·         Thursday closed POSITIVE with 9 decliners, 32 advancers and 2 flats;

·         Wednesday closed NEGATIVE with 22 decliners, 20 advancers and 1 flat;

·         Last, Tuesday closed NEGATIVE with 34 decliners, 7 advancers and 2 flats;

Reiterating, the stem, cell and gene therapy regenerative medicine (SCGT&RM) sector has stampeded again to the downside and it’s possible that the downtrends will continue until after the Q4 financial results unfold.

Finally, one SCGT&RM sector company - Applied Genetic Technologies Corp. (AGTC) has reported fiscal a Q2 NET INCOME of $3 M, after recording a loss in the same period a year earlier.

• AGTC’s results surpassed expectations with the average estimate being a loss of -$0.29 per share.  The gene therapy company posted Q2/16 (12/31/15) revenue of $12.2 M surpassing forecasts of an expected $8.1 M loss; 

• AGTC share price has declines 36% since the beginning of the year, and dropped of 45% in the last 12 months. Revenue recorded during Q2/16 resulted primarily from the amortization of upfront fees received under AGTC’s collaboration with Biogen (BIIB).

While Organovo Holdings Inc. (ONVO) reported a loss of $10.5 M in its Q3/16. On a per-share basis, ONVO had a loss of $0.11.  ONVO posted revenue of $328 K and expects full-year revenue in the range of $700,000 to $900,000. The net loss was $10.5 M, or $0.11 per share, for Q3/16 as compared to $7 M, or $0.09 per share, for Q3/15.

• ONVO ended Q3/16 with a cash and cash equivalents balance of $70 M.  Organovo’s net cash utilization (1) during the period was $6.8 M while the net cash utilization for the nine months ended 12/31/15 was $23.3 M; 

• Working capital was $65.2 M to end fiscal Q3 compared to $46.8 M in the prior-year’s quarter; 

• ONVO's shares closed at $1.99 in the final minutes of trading on Monday. A year ago, they were trading at $6.09 and were DOWN -$0.10 and are DOWN in Monday’s aftermarket -$0.24 to $1.75.

Pluristem (PSTI) also filed a 10-Q <NO press release – wonder why (?)> to report a net loss for Q4/15 of $3.962 M as compared to net loss of $6.245 M.

• The changes were due to the increased revenues related to the termination of the United agreement. Net loss per share for Q4/15 was $0.05, as compared to $0.09 for Q4/14.  Cash and cash equivalents as of 12/31/15 amounted to $4.948 M;

• PSTI closed DOWN -$0.04 to $0.80

Can we expect more upside from other sector “participants” maybe from a few with solid collaborations and partners but, on the whole – NO!

• Also, unless and until we reach a point where capital market access is available, the odds are very low that appreciation or credibility will return to “our’ universe!

Just ride the carousel of sentiment indicators … for now!

You’ve made it to the office, turned on the monitor having just gotten your coffee and it hits you - what are today’s trades?  Tuesday’s indications:

• Applied Genetic Technologies (AGTC) closed DOWN -$1.05 to $13.10. A low price since 11/6/15’s $13.02, AGTC had a good earnings call with net income, $190.6 M in cash from their Biogen (BIIB) collaboration – BUY;

• Capricor (CAPR) closed DOWN -$0.33 to $2.44. I have NOT been wrong in my negativity toward this equity as in most cases or sessions I am just early. 1/14/16’s $2.01 is where it should settle after a failed offering, be ready for another try with another I-Bank – Maintaining SELL;

• Histogenics (HSGX) closed UP +$0.09 to $2.51. Even when the sector and market drops like a stone how many times lately has HSGX been up – better than most of the 43 covered companies.  Has its issues but, bounce-backs have meaning – BUY;

• Kite Pharma (KITE) closed DOWN -$1.52 to $39.95. Hasn’t been this low since approximately 11/17/14’s $39.34 – Oversold BUY;

• Organovo Holdings (ONVO) closed DOWN -$0.10 to $1.99 <see above paragraph and ONVO notation>. ONVO is down in the after-market -$0.24 to $1.75 – SELL;

• Osiris (OSIR) closed DOWN -$0.16 to $6.23. Since the “stuff’ hit the fan, OSIR has been in a decline. Time for a slow rebound – BUY;

• Pluristem (PSTI) closed DOWN -$0.04 to $0.80. PSTI announced a net loss for Q4/15 of $3.962 M as compared to net loss of $6.245 M. The changes were due to the increased revenues related to the termination of the United agreement. Net loss per share for Q4/15 was $0.05, as compared to $0.09 for Q4/14.  Cash and cash equivalents as of 12/31/15 amounted to $4.948 M. Maintaining SELL;

Opinions expressed are those of the author and are subject to change, and are not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.