February 9, 2017 5:36pm
Upside also had very low volume …
While the sector is experiencing a catch-up rotation, and it's more than likely we'll see the usual trader rebalance
Pre-open indication’s tally: 2 hit (BSTG and AGTC) and 0 miss
Q3/16 financial results: Organovo Holdings (ONVO), I’ve been a believer and maintained a BUY since 12/8/16
What happened, what does it all mean and why is it important in today’s sector outcomes …?
I live it hourly, you get to read it …
U.S. equities traded higher on Thursday …
The NASDAQ closed UP +32.73 or +0.58% to 5715.18 and the DOW closed UP +118.06 or +0.59% to 20,172.40.
A day in the life of the stem, cell, gene and regenerative therapy (SCGT & RT) sector – the advance/decline line scenario of our 43 covered companies:
- The open was positive with an A/DL of 27/10 and 6 flats;
- The mid-day continued positive with an A/DL of 29/12 and 2 flats;
- The close stayed positive with an A/DL of 28/11 and 4 flats;
Henry’omics:
From the mid-day’s investor’s letter title, “momentum has a short fuse in either direction”
- Reiterating, “Fear is one of the prevailing themes in the SCG&RT sector as “our” universe has staged a steady assault on any highs over the past few months – one of the issues is momentum’s short fuse, it’s lit and blows up, down and sideways.
The stem, cell, gene and regenerative therapy sector stock picking is notoriously problematic and challenging, with almost no investors able to develop portfolios that can outperform the market over the long term; it is about … TRADING the names!
- Understand that the bulk of these moves are driven by a ... few names!
The average stock, when taken individually, not only underperforms when compared to the overall sector and market, always the loser due to liquidity.
As I have stated, “As good, bad and early companies are fermenting and dying by investor suicide i.e. running out financings that depreciate and dilute in every offering!”
RM-i’s daily and continual “reads” of the goings-on of the SCG&RT sector can improve investors or trader’s odds, and just because a stock underperforms the market doesn’t mean … you have to lose money.
Grow your awareness of the difficulty of stock picking by staying tuned to this site!
Q4/16 Financial results:
Organovo Holdings (ONVO)
Net loss was $9.6 M, or $0.09 per share, for Q3/17, as compared to $10.5 M, or $0.11 per share, for Q3/16.
ONVO reported revenue of $1.2 M, which consisted largely of product and service revenue. Total revenue increased 251% versus the comparable period of fiscal 2016.
Cost of revenues was $200 K, reflecting ONVO’s expenses related to manufacturing and delivering its product and service revenues.
R&D costs increased 10% year-over-year to $5 M, primarily due to increased employee related and lab supplies costs.
SG&A expenses decreased 11% from the prior-year period to $5.5 M, reflecting lower non-cash shared-based compensation expense, partially offset by higher employee related costs.
ONVO ended with cash and cash equivalents balance of $70 M. Organovo’s net cash utilization during the period was $7.7 M. ONVO’s net cash utilization for the nine months ended December 31, 2016 was $23.1 million.
Working capital was $67.5 M to end Q3/17 compared to $65.2 M in the prior-year quarter.
The Bottom Line: Outlook of total revenue of between $3.7 M and $4.5 M for FY17. Fiscal 2016 total revenue was $1.5 M. Net cash utilization will be between $31 M and $34 M for FY17.
ONVO had cash and cash equivalents balance of $62.1 M ending 3/31/16.
Guidance and a little downside: ONVO’s revising total revenue guidance for FY17 because of a change in the timing of customer orders due to specific customer requests for additional validation studies related to certain use cases and for qualification of an additional cell source. ONVO expects to successfully complete the additional scientific studies required to address these issues, and don’t anticipate these items will have a long-term impact on customer adoption. The required studies will delay a portion of forecasted revenue into fiscal 2018. ONVO’s working diligently with our customers to complete the technical work and to unlock both existing backlog and prospective orders, and look ahead with confidence to continued growth in our pipeline. In addition, internal liver validation data now includes successful identification of toxicity for two out of three proprietary compounds that were classic preclinical misses for one of our Top 10 pharma customers. This hit rate is consistent with our overall testing success and further demonstrates significantly increased predictive power for our customers.
Notice: I have maintained a BUY since 12/8/16 …
Indexes, the ebb and flow:
- The iShares Russell 2000 (IWM) indicated a negative -0.01% in the pre- open and was UP +1.41% at the mid-day and closed UP +1.41%.
- The iShares NASDAQ Biotechnology (IBB) indicated a negative -0.50% in the pre-open and was UP at the mid-day +1.05% and closed UP +1.01%.
Pre-open indication’s tally: 2 hit (AGTC and BSTG) and 0 miss
LONG:
- Applied Genetic Technologies (AGTC) closed UP +$0.45 – hit;
TRADEABLE:
- Biostage (BSTG) closed DOWN -$0.117 – hit;
Today’s 5 top dollar gainers included:
- bluebird bio (BLUW) +$2.15;
- Spark Therapeutics (ONCE) +$1.37 after Wednesday’s-$0.37 after Tuesday’s -$1.11 after Monday’s -$0.39;
- Juno Therapeutics (JUNO) +$1.33 after Wednesday’s -$0.44;
- Caladrius Biosciences (CLBS) +$0.94;
- Cellectis SA (CLLS) +$0.86 after Wednesday’s +$0.27 after Tuesday’s $0.40;
Today’s 5 largest dollar losers of the session were:
- Biostage (BSTG) -$0.117 – pre their offering pricing;
- Adverum (ADVM) -$0.10;
- VistaGen (VTGN) -$0.08;
- Asterias Biotherapeutics (NYSEMKT: AST) -$0.075;
- International Stem cell (ISCO) -$%0.06
Flat:
- BioTime (NYSEMKT: BTX) at $3.01;
- BioLife Solutions (BLFS) at $1.81;
- Vericel (VCEL) at $2.75
- ReNeuron (RENE.L) at $2.45;
The downside trend reflects a pricing trend of:
- Thursday’s decliners ranged from -0.31% <BCLI> to -18.87% <BSTG> in 11 equities;
- Wednesday’s decliners ranged from -0.14% <BLUE> to -12.56% <BSTG> in 29 equities;
- Tuesday’s decliners ranged from -0.09% <XON> to -6.52% <AGTC> in 22 equities;
- Monday’s decliners ranged from -0.42% <JUNO> to -7.02% <ISCO> in 22 equities;
- Friday’s decliners ranged from -0.88% <PSTI> to -11.64% <HSGX> in 9 equities;
- Last Thursday’s decliners ranged from -0.62% <CYTX> to -42.56% <STML> in 23 equities;
The upside shows a pricing trend of:
- Thursday’s gainers ranged from +0.34% <KOOL> to +19.67% <CLBS> in 28 equities;
- Wednesday’s gainers ranged from +0.27% <ONVO> to +7.26% <STML> in 10 equities;
- Tuesday’s gainers ranged from +0.33% <BTX> to +5.61% <VTGN> in 18 equities;
- Monday’s gainers ranged from +0.05% <CLLS> to +8.80% <NWBO> in 11 equities;
- Friday’s gainers ranged from +0.17% <ONCE> to +16.96% <STML> in 29 equities;
- Last Thursday’s gainers ranged from +0.30% <FCSC> to +10.53% <HSGX> in 17 equities;
As the week ends:
- Thursday’s 28 gainers followed Wednesday’s 10, Tuesday’s 18, Monday’s 19, Friday’s 29 and last Thursday’s 17
- Thursday’s 11 decliners followed Wednesday’s 29, Tuesday’s 22, Monday’s 22, Friday’s 9 and last Thursday’s 23
Review my fear gauge or the CBOE Volatility Index (VIX):
· Thursday traded near 11;
· Wednesday closed near 11.4;
· Tuesday traded near 11.5;
· Monday traded near 11.3;
· Friday traded near 10.81
· Last Thursday traded near 11.9;
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.
Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors. All investments are subject to risks. Investors should consider investment objectives.
Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.
