February 10, 2017 7:51am

 

I believe the battery is drained but, can it be charged?

 

Who do you call for shareside assistance?  It’s not AAA … try RMi

 

Today’s headlights, eight (8) equities

 

I write in every line that investors need to avoid risks as if I were the first to be hurt if I was wrong!

 

 


 

Once we get through quarterly financial results <notice I didn’t say – “earnings” season> that started Tuesday, it will be easier for investors to have a 2017 view, but my fear is that the Q4 numbers aren't going to look much better than the Q3 numbers

 

 

Today’s headlights: Applied Genetic Technologies (AGTC), Bellicum Pharma (BLCM), Biostage (BSTG), BioTime (NYSEMKT: BTX), Caladrius Biosciences (CLBS), Organovo Holdings (ONVO), Osiris (OSIR) and Verastem (VSTM)

 

Indexes and ETFs: The IWM (+0.34%) is UP, the IBB, XBI and XLV are NOT indicating

Dow futures are UP +0.13% and NASDAQ futures are UP +0.10%

 

U.S. stock index futures pointed to a higher open on Friday as traders eyed the release of data and earnings.

European markets were higher as investors tracked earnings and looked ahead to the meeting between President Donald Trump and Japanese Prime Minister Shinzo Abe.

Asian markets climbed higher, following a boost in U.S. equities on the back of President Donald Trump saying he would soon announce a "phenomenal" tax plan.

 

Data docket:  import prices are due at 8:30 a.m. ET, with consumer sentiment set to come out at 10:00 a.m. ET.

 

 

The stem, cell, gene and regenerative therapy (SCG&RT) closed POSITIVE on Thursday, NEGATIVE on Wednesday, Tuesday and Monday and POSITIVE last Friday.

The SCG&RT sector’s record after the last 5 days (of 43 covered companies):

·         Thursday closed POSITIVE with 28 decliners, 11 advancers and 4 flats;

·         Wednesday closed NEGATIVE with 29 decliners, 10 advancers and 4 flats;

·         Tuesday closed NEGATIVE with 22 decliners, 18 advancers and 3 flat;

·         Monday closed NEGATIVE with 22 decliners, 19 advancers and 2 flats;

·         Last Friday closed POSITIVE with 9 decliners, 29 advancers and 5 flats;

 

 

Remembering Thursday’s closing bell newsletter, “The upside 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”

  • 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, when it’s lit and blows up, down and sideways.”

 

The most recent offerings of Athersys (ATHX) and Biostage (BSTG) have experienced serious depreciation and discounts to get completed; BioTime (NYSEMKT: BTX) is about to enter the financing “fray” – I’d say expect the same that the recent issuers have experienced

The most recent quarterly result announcements of Applied Genetic Technologies (AGTC), Pluristem (PSTI) and Onganovo Holdings (ONVO) have also experienced serious pre announcement depreciation jitters. AGTC jumped post their release while ONVO is taking a dive!

ONVO has a problem; fixable over time concerning revenue and time to complete projects while PSTI just doesn’t tell or explain what is happening which usually leaves them as unaccountable.

 

Expectation will be the word for 2017 – meeting the unknowns with soon to be known will be the subject of investing decisions through this year 2017.

 

 

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  Thursday up +1.01% is NOT indicating  in Friday’s pre-market;

·         The SPDR S&P Biotech ETF (XBI) closed Thursday up +1.79% and is NOT indicating in Friday’s after-market;

·         The Health Care Select Sector SPDR ETF (XLV) closed up +0.36% Thursday and is NOT indicating in Friday’s pre-market;

·         The iShares Russell 2000 (IWM) closed up +1.41% on Thursday and is UP +0.34% in Friday’s pre-market

                                                                                   

 

Companies in my headlights:

TRADEABLE:

Applied Genetic Technologies (AGTC) closed UP +$0.45 to $6.85 after Wednesday’s $6.40 (-$0.05), Tuesday’s $6.45 (-$0.45), Monday’s FLAT at $6.90, Friday’s $6.90 (-$0.30), Thursday’s FLAT at $7.20, Wednesday’s $7.20 (-$0.05), Tuesday’s $7.25 (-$0.15) following last Monday’s $7.40 (-$0.75). AGTC on Wednesday reported FY Q2/17 profit of $2.1 M and $0.11 per share. The results exceeded street expectations. The average estimate was for earnings of $0.03 per share. AGTC posted revenue of $10.9 M in the period, which also beat Street forecasts.  Expectation was for $7.2 M. Also AGTC’s shares have decreased 32 % since the beginning of the year. The shares have dropped 51% in the last 12 months and should jump higher. The pre-quarterly earnings jitters as well as a comparables “hit” were the downdraft issues. Thus, I will keep “flying” this flag - Maintaining BUY;

Organovo Holdings (ONVO) closed UP +$0.09 to $3.77. I have maintained a buy since 12/8/16 however, after reporting Q3/17 results. ONVO’s guidance included a statement about 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 doessn’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 is working diligently with customers to complete the technical work and to unlock both existing backlog and prospective orders, and looks 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. The aftermarket indication is -$0.69 – SELL;

Verastem (VSTM) closed UP +$0.01 to $1.21. VSTM recently 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 (PFE), 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 – Maintaining BUY;

Bellicum Pharma (BLCM) closed UP +$0.69 to $13.08. Monday started at $13.03 and February started at $12.88, January at $13.89 and December at $16.98; new CEO or not.  BLCM is still in the twilight zone of pricing. The aftermarket indication is negative -$0.03 – SELL;

Biostage (BSTG) closed DOWN another -$0.117 to $0.50 after Wednesday’s $0.62 (-$0.08), Tuesday’s $0.709 (-$0.0145), Monday’s $0.72 (+$0.04) and last Friday’s $0.68 (-$0.075). I believe the offering will get completed at a discounted $0.40 for gross proceeds of $8 M. VERY UGLY but, it got done in a very BAD environment. The question will be – what will the company do to regain ANY value for shareholders in 2017; it will take a thorough review of the regulatory focus, the operational and scientific development and those associated with the company  - Maintaining SELL until the offering settles;

BioTime (NYSEMKT: BTX) closed FLAT at $3.01. BTX proposed an offering of stock utilizing Raymond James – NO share amounts or pricing. The capital access window is open – many will jump but, where will they land in the cold dark river, a splat on a sidewalk or months in the depreciation ward? Depreciation and discounts have taken their toll in the recent two offerings – Athersys (ATHX) and Biostage (BSTG). SELL before the hit;

Caladrius Biosciences (CLBS) closed UP +$0.94 to $5.72. 1/3/17 traded at $3.08, a year ago on 2/9/16 the stock traded at $4.82. Something is up as the stock has run from 2/6/17’s $4.75 and 2/1’s $4.40. I have never believed in this CEO although past and current members of the management team are solid professionals. Looking at the numbers and the chart sends me an impression that CLBS always need cash as their spending spirals; so I would think that CLBS will be considering an offering in the near future – Maintaining SELL;

Osiris (OSIR) closed UP +$0.25 to $5.92 having started the week at $5.51, January started at $4.89, December started at $5.61 and November’s $4.19. What’s with the upside after late or no 8-Ks, 10-Qs or annual reports for a year and a half, add in an SEC investigation, multiple CEOs, questionable revenues, new lawyers and accountants and fired employees?  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.