February 6, 2017 7:58am
The reality is investors are scarred from past depreciated and diluted share pricing
Forthcoming Q4/16 quarterly results jitters have also hindered some pricings
Offering: Biostage (BSTG) offers with updated S-1A filed to SELL 7.936 M shares and 200 shares of a convertible preferred stock <2.645 M shares of common>,
I answer one question; in which company should investors put, keep and commit their money!
I write in every line that investors need to avoid risks as if I were the first to be hurt if I was wrong!
Today’s headlights:
LONG: AGTC, HSGX, VSTM - BUY
TRADEABLES : BSTG and CLBS - SELL
Indexes and ETFs: The IBB, XBI and XLV are NOT indicating while the IWM (-0.06%) is DOWN
Dow futures are UP +0.01% and NASDAQ futures are DOWN -0.05%
U.S. stock index futures pointed to a flat open Monday as traders focused on earnings after the best day of the new year for the Dow Jones industrial average in the previous session.
European Europe moved higher as investors carefully weighed President Donald Trump's policies and focused on corporate earnings.
Asian markets were mostly higher, as investors try to make sense of U.S. President Donald Trump's policy noise
Data dockets: No major economic data releases scheduled
The stem, cell, gene and regenerative therapy (SCG&RT) closed POSITIVE on Friday, NEGATIVE on Thursday, POSITIVE on Wednesday and Tuesday and NEGATIVE last Monday.
The SCG&RT sector’s record after the last 5 days (of 43 covered companies):
· Friday closed POSITIVE with 9 decliners, 29 advancers and 5 flats;
· Thursday closed NEGATIVE with 23 decliners, 17 advancers and 3 flats;
· Wednesday closed POSITIVE with 14 decliners, 29 advancers and 0 flats;
· Tuesday closed POSITIVE with 10 decliners, 32 advancers and 1 flat;
· Last Monday closed NEGATIVE with 28 decliners, 9 advancers and 6 flats;
Remembering Friday’s closing bell newsletter, “What’s driving the upside? I know what it’s not … the question is now that the bleeding has slowed; how investible is the sector since Friday’s band aid adhered.”
- Reiterating, it may be hard for investors to admit it, but Friday’s upside will come at a cost … be prepared for disappointment.”
As I had stated, “When development stage companies continually sell stock, share pricing falls further and further, scaring investors who know they must also sell … depreciated and diluted shares, which forces companies to sell even more stock.”
Uncertainty hinders the SCG&RT sector as indications of pricing are directionless!
- I blame “our” universe’s lackluster action on the absence of event oriented news, pricing “punches” and any detail of forthcoming FY17 guidance and disclosure.
The lack of clarity is likely to be an ongoing feature, forcing investors to fly blind; at least until last year’s ending cash positions are disclosed.
You’ve made it to the office, turned on the monitor, having just gotten your coffee and it hits you - what could be today’s trades?
Watch list:
· The iShares Nasdaq Biotechnology (IBB) closed Friday up +1.13% is NOT indicating in Monday’s pre-market;
· The SPDR S&P Biotech ETF (XBI) closed Friday up +1.34% and is Not indicating in Monday’s after-market;
· The Health Care Select Sector SPDR ETF (XLV) closed up +0.44% Friday and is NOT indicating in Monday’s pre-market;
· The iShares Russell 2000 (IWM) closed up +1.53% on Friday and is DOWN -0.06% in Monday’s pre-market
Companies in my headlights:
LONG:
Applied Genetic Technologies (AGTC) closed DOWN -$0.30 to $6.90, Thursday’s FLAT at $7.20, Wednesday’s $7.20 (-$0.05), Tuesday’s $7.25 (-$0.15) following Monday’s $7.40 (-$0.75). Pre quarterly earnings jitters is the issue – seems to happen every quarter thus, I keep “flying” the flag - Maintaining BUY;
Verastem (VSTM0 closed DOWN -$0.02 to $1.24. VSTM dosed the first patient in a new clinical trial evaluating avelumab*, an investigational fully human anti-PD-L1 IgG1 monoclonal antibody, in combination with defactinib, an investigational focal adhesion kinase (FAK) inhibitor, in patients with advanced ovarian cancer. The P1/2 clinical trial is being conducted in collaboration with the alliance between Merck KGaA, Darmstadt, Germany, which in the US and Canada operates as EMD Serono, and Pfizer, and is expected to enroll approximately 100 patients at up to 15 sites across the U.S. There is $86.88 M in cash in the till with total cash per share of $2.35 as of 9/31/16 – BUY;
Histogenics (HSGX) closed DOWN -$0.21 to $1.68 following Thursday’s $1.89 (+$0.18) with 2.178 M shares traded, the 3 month average = 213.1 K shares. Something is up and it’s more than the stock price. I’d take the bet, the volume increase is a “tell” – BUY;
TRADEABLE:
Biostage (BSTG) closed DOWN -$0.075 to $0.68 after Thursday’s $0.75 (+$0.0156), Wednesday’s $0.74 (-$0.0659), Tuesday’s $0.80 (+$0.012) following Monday’s $0.79 (-$0.0153) after last Friday’s $0.809 (-$0.0214). With an S-1A filed to SELL 7.936 M shares and 200 shares of a convertible preferred stock <2.645 M shares of common>, pre the offering’s depreciation indicates a sizeable discount to the pricing - Maintaining SELL;
Caladrius Biosciences (CLBS) closed UP +$0.01 to $4.56 following Thursday’s $4.55 (+$0.15), Wednesday’s $4.40 (-$0.09), Tuesday’s $4.49 (+$0.30), Monday’s $4.20 (-$0.29) after Friday’s $4.46 (+$0.51) following last Thursday’s $3.98 (+$0.11). January started at $3.07 with a high of $4.46, December experienced a low of $2.77 and a high of $3.78 following November’s start of $3.87 and a low of $3.37 and a high of $4.21 the last time I saw $4.44 was 10/12/16. What’s driving the stock up? I’d anticipate some sort of mixed offering with the stock jumping– Maintaining SELL;
Stemline (STML) closed DOWN another -$4.15 after Wednesday’s $9.45 (-$0.45) and there could be more depreciation. STML has disclosed two previous patient deaths related to the same SL-401 toxicity -- capillary leak syndrome. This is the third death in SL-401 study due to capillary leak syndrome. While Stemline disclosed the two previous deaths in a timely manner, the delay in reporting the third death has raised eyebrows amid ethical concerns. If STML's SL-401 blood-cancer drug is put on clinical hold on account of the three deaths, this may spell disaster for the company – Maintaining SELL;
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.
Henry’s comments are for informational purposes only and are not a substitute for personalized advice. Consult your advisor about what is best for you.
