RegMed Investors’ (RMi) closing bell analysis, what are investors feeling?

February 21, 2017 5:18pm

Forgotten is the answer!

The cause - the consistent alternating cycle of depreciation/appreciation…

What happened, what did it all mean and why was it important in today’s sector outcomes

Pre-open indication tally, 3 hits (BSTG, BTX and BCLI) and 1 miss (BLCM)

Out and about: Organovo Holdings’ (ONVO) published data demonstrating that 3D bioprinted human kidney tissue has great potential to assess the toxic effects of compounds and the development and progression of complex, multicellular processes such as fibrosis

I answer one question, short and without sweeteners; in which company should investors put, keep and commit their money

RMi’s daily and continual “reads” of the goings-on of the SCG&RT sector can improve investor’s and trader’s odds, and just because a stock underperforms the market doesn’t mean you have to lose money.

U.S. equities kicked off the week on the right foot, closing at record highs Tuesday following a key naming by the Trump administration and corporate earnings.

The NASDAQ closed UP +27.37 or +0.47% to 5865.95 and the DOW closed UP +118.95 or +0.58% to 20,743.00.

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 19/22 and 2 flats;
• The mid-day slipped negative with an A/DL of 17/24 and 2 flats;
• The close continued negative with an A/DL of 17/21 and 5 flat – the opposite of Friday;

Henry’omics:

From the pre-open’s investor’s letter title, “Searching for a direction. Promises, promises – how many CEOs have kept their word to Investors … NONE and one – more dilution.”

• Reiterating, “This fragility is further enhanced by those who will attempt to force their way through the capital market open window for financing.  The problem is the capital access is getting lower every session.” 

How many CEOs have forgotten the lifeblood of their share pricing – investors – MOST!

• Their dependence is on hedge funds that in recent offerings buy, but sell-off the shares and keep the warrants – the ONLY value they can find in these depreciated and diluted financings

Bottom Line: an abuse of investor trust!

• Investors must start making tough, pricing-driven decisions about how to select and maintain their holdings.

Right now, too many CEOs are using bad math and faulty logic to push their share pricing to any sustainability.

For example, Biostage (BSTG), who just raised $8 M - has to re-finance in less than a year to support their spending - $33 M in three years after a $15 M spinout <cash position>, 3 offerings $1.75, $1.76 and the latest $0.40 – still with NO IND filed for a human clinical trial.

What will the next pricing be $0.10 … IF any?

BSTG has also issued – 1 BILLION in convertible debt <warrants> - read the prospectus.

Bye and bye, WHERE is the publication and peer reviewed data promised 6 months ago???

WHO will be held – ACCOUNTIBLE in this case as bankruptcy looms?

Indexes, the ebb and flow:

The iShares Russell 2000 (IWM) indicated a positive +0.22% in the pre- open and closed UP +0.78%

The iShares NASDAQ Biotechnology (IBB) did NOT indicate in the pre-open and closed DOWN -0.53%

Pre-open indication tally, 3 hit (BSTG, BTX and BCLI) and 1 miss (BLCM:

• Bellicum Pharma (BLCM) closed UP +$0.22 – miss;
• Biostage (BSTG) closed DOWN -$0.04 (still below the $0.40 offering price) – hit;
• BioTime (NYSEMKY: BTX) closed UP + $0.20 – hit;
• Brainstorm Cell Therapy (BCLI) closed UP +$0.34 – hit;

Out and about:

Organovo (ONVO) closed UP +$0.03 – Maintaining BUY …

ONVO announced the publication of data in Frontiers in Physiology showing its 3D bioprinted proximal tubule tissue model exhibits key characteristics of renal physiology that allow for in vitro kidney toxicity testing.

• Immunohistochemical characterization showing tight junction formation between epithelial cells, polarized expression of transporters that regulate excretion and reabsorption of compounds, an extensive microvascular network, and deposition of endogenous extracellular matrix in the interstitium;
• Proof-of-concept study for demonstrating induction of toxicity following treatment with a nephrotoxin cisplatin, including a loss of tissue viability and epithelial cell function in a dose-dependent fashion. This effect was blocked by cimetidine, a compound that prevents cisplatin uptake via the transporter OCT2; and
• Induction of tubulo-interstitial fibrosis in this model via administration of TGF-beta, with tissue response verified via gene expression analysis and histological examination of excess extracellular matrix deposition.

Traditional pre-clinical models often fall short in their ability to inform clinical outcomes accurately, largely due to the limited functionality of simple in vitro models and species differences,” said Dr. Sharon Presnell, chief scientific officer, Organovo.  “Our newly published data demonstrate that Organovo’s 3D bioprinted human kidney tissue has great potential to assess the toxic effects of compounds and the development and progression of complex, multicellular processes such as fibrosis.”

The downside shows a pricing trend of:

• Tuesday’s decliners ranged from -0.17% <JUNO> to -5.63% <FCSC> in 21 equities;
• Monday, the market was closed;
• Friday’s decliners ranged from -0.12% <ONCE> to -7.06% <NWBO> in 17 equities;
• Thursday’s decliners ranged from -0.34% <XON> to -6.44% <IMUC> in 26 equities;
• Wednesday’s decliners ranged from -0.06% <BLUE> to -6.54% <ISCO> in 14 equities;
• Last Tuesday’s decliners ranged from -0.01% <ISCO> to -13.06% <VTGN> in 20 equities;

The upside shows a pricing trend of:

• Tuesday’s gainers ranged from +0.34% <ONCE> to +11.94% <BSTG> in 17 equities;
• Monday, the market was closed;
• Friday’s gainers ranged from +0.24% <MDXG> to +15.93% <FATE> in 24 equities;
• Thursday’s gainers ranged from +0.32% <CAPR> to +18.55% <CUR> in 16 equities;
• Wednesday’s gainers ranged from +0.31% <FATE> to +6.32% <JUNO> in 25 equities;
• Last Tuesday’s gainers ranged from +0.61% <BCLI> to +22.31% <IMUC> in 21 equities;

Review my fear gauge or the CBOE Volatility Index (VIX):

·         Tuesday traded near 11.8;

·         Monday was a holiday;

·         Friday traded near 11.5;

·         Thursday traded near 11.7;

·         Wednesday traded near 11.6 – 8% higher;

·         Last Tuesday traded near 10.89;

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.