March 13, 2017 6:59pm

 

It’s not a time to be aggressive buyers; fact or fiction, many of the “usual suspects” don’t parallel park with investors!

 

It’s better if investors have someone to watch from the outside as to how and when a stock appreciates. I am the one to wave a stop -- believe me, you don’t want to take some of these hits!

 

Pre-open indications: 4 hits and 3 miss

 

… Readership is a team sport, are you on it?

 

 

Henry’omics:

From the pre-open’s investor’s letter title, “a sinkhole is forming”

  • As I had stated, “The stem, cell, gene and regenerative therapy  sector move in and out of investing favor far too quickly, and investors should at all times take advantage of both, making nuanced and smart adjustments as I focus on the time of appreciation as well as depreciation layered by cock-eyed sentiment .”

Cell therapy (CT) equities were able to play through the mixed signals of the market as U.S. stocks traded in a range Monday as traders anticipated an interest rate hike on Wednesday.

  • While CT stocks are waiting to complete Q4/16 financial results and any glimpses of expectation of catalysts and milestone – many still with a guesstimate factor!

As much as Julius Caesar’s assassination on the Ides of March signaled an inflection point in Roman history; March may also mark a nuanced point in the sector but today’s upside highlights a coming sideways and downward slip of pricing moments.

 

What does today's pricing say about the sector appreciation; it revolves around ETFs and algorithms, but also precludes a number of unnamed developments coming out before the end of the month and quarter.

 

 

Sum of the parts commentary:

The whole is greater than the sum of its parts …

It is like the parts of a watch, combined, have more surface area & volume, than the watch itself, but LACK the understanding of the reason to own a watch – to tell TIME!

News flash – I don’t TRUST many of these pricing movements – especially Biostage’s (BSTG) closing at $0.368 up +$0.0314 after the “mark-up” of reporting numbers!

As I had stated in the pre-open, “after a depreciating and dilutionary offering of 20 M shares priced at $0.40, BSTG closed the year with $2.94 M in cash. 

Read the balance sheet as accounts payable were $962 K, accrued and other current liabilities were $1.21 M and warrant liabilities were $505 K with total current liabilities adding up to $2.77 M at the end of 12/31/16. Discounting prepaid expenses of $291 K and receivables were $42 K. 

I also have another question after re-reading <the 10th time> the prospectus, if $8 M was raised and the placement agent fees were $560 K as an expense of the offering – thus  BSTG received $7.44 M - NOT $8 M.

The runway is a lot less than stated, I’d say approximately $7.9 M ... leaving another question of how long can they survive while spending $2.5 to $3 M a quarter.

Without another offering – I say by August; they are broke just about the time they “hope” to file an IND. 

It also takes time to customize and populate a patient trial and initiate a clinical trial. The costs will outweigh the effect of the news of a filing acceptance and don’t forget the timetable of protocols.

The NASDAQ listing is a real ISSUE – a reverse is needed and that has yet another depreciating effect.

 

The recent financing GUTTED and SCALPED investors in a 20 M share offering, the least they could do is fulfill their fiduciary responsibility to the “fallen” in the field of share pricing!

I further NOTE that executive have NOT cut their high salaries or made ANY further investment in “their” future and current holdings of company’s stock!!!

 

 

What analytics were there today and why it was important in today’s sector outcomes?

…The NASDAQ closed UP +14.06 or +0.24% to 5875.78 and the DOW closed DOWN -21.50 or -0.10% to 20,881.48.

…The iShares Russell 2000 (IWM) indicated a down -0.36% at the pre-open and closed UP +0.24%.

… The iShares NASDAQ Biotechnology (IBB) indicated a positive +0.13% at the pre-open and closed FLAT at 0.00% - the first time I’ve seen that in a long while.

 

The advance/decline line scenario of 43 SCGT & RT covered companies:   

·         The opening bell was barely negative with an A/DL of 18/19 and 5 flats;

·         The mid-day jumped positive with an A/DL of 25/16 and 2 flat;

·         The close was positive with an A/DL of 24/14 and 5 flats;

 

… Decliners ranged from -0.25% <BCLI> to -25.77% <OSIR> in 14 equities;

… Gainers ranged from +0.48% <CLLS> to +24.19% <VSTM> in 24 equities;

 

 

The upside …

  • bluebird bio (BLUE) closed up +$1.95 after Friday’s +$1.75 after Thursday’s +$2.30 after Wednesday’s +$2.20 after last Tuesday’s <down> -$1.20;
  • Kite Pharma (KITE) closed up +$1.94 after Friday’s +$2.19 after Thursday’s +$6.01 after Wednesday’s +$1.41 and last Tuesday’s +$0.47 post a completed financing at $75.00;
  • Bellicum Pharmaceuticals (BLCM) closed up +$0.92 pre Q4/16 financial results and is down in the aftermarket -$0.39;
  • Juno Therapeutics (JUNO) closed up +$0.72 – still feeling the onerous of patient deaths and is also down -$0.13 in the aftermarket;
  • Spark Therapeutics (ONCE) closed up +$0.45 following Friday’s +$0.75 after Thursday’s (down) -$0.97 post Wednesday’s up +$1.28 after last Tuesday’s down -$4.14 – there is still some essence or element of a bargain basement pricing;

 

The downside:

  • Osiris (OSIR) closed down -$1.34 after Friday’s -$0.23 – delisting and criminal probe;
  • Intrexon (XON) closed down -$0.92 after Friday’s +$0.87 after CEO change and corporate restructuring;
  • MiMedx (MDXG) closed down -$0.23 – probably based a comparable (OSIR) issue of billing irregularities and the resulting criminal issues;
  • Fibrocell (FCSC) closed down -$0.16 – debt offering;
  • VistaGen (VTGN) closed down -$0.09 – I’d be emptying this investment pocket;
  • Neuralstem (CUR) closed down -$0.13 after Thursday’s +$0.87;

 

 

Pre-open indications:  4 hit and 3 miss

  • Juno Therapeutics (JUNO) closed up +$0.72 – hit;
  • Kite Pharma (KITE) closed up +$1.94 – hit;
  • Biostage (BSTG) closed up +$0.03 – miss, the downdraft will come after they “played” with their reporting numbers;
  • Osiris (OSIR) closed down $1.34 – hit;
  • Cellectis SA (CLLS) closed up +$0.11 – miss, strength was sold into;
  • Fibrocell (FCSC) closed down -$0.16 – hit;
  • Neuralstem (CUR) closed up +$0.18 – miss, strength was sold into;

 

Flat:

  • Cytori (CYTX);
  • Sangamo SGMO)
  • Organovo (ONVO);
  • uniQure (QURE);
  • Vericel (VCEL);

 

 

Out and about:

Organovo (ONVO) and its customers presented data supporting 3D Bioprinted Liver and Kidney Tissues for drug toxicity testing …

ONVO announced eight presentations at the Society of Toxicology’s (“SOT”) 56th Annual Meeting and ToxExpo, March 12–16, 2017, in Baltimore.  These presentations demonstrate the broad applicability of Organovo’s ExViveTM 3D Bioprinted Human Liver and Kidney Tissues for the assessment of drug safety and the detection of multiple clinically-relevant modes of liver injury and kidney toxicity. 

The Bottom Line: ONVO is also expanding its portfolio by adding new tissues and by validating the use of existing tissues across a broader set of applications.  The unique ability of human liver model is to reveal mechanisms of action for drug-induced livery injury (DILI) and model key aspects of chronic, progressive liver diseases such as fibrosis.

 

 

Financial results:

Bellicum Pharmaceuticals (BLCM) …

BLCM reported a net loss of $19.9 million for Q4/16 and $69.2 million for FY16 compared to a net loss of $16.8 million and $48.5 million for FY15.

The results included non-cash, share-based compensation charges of $3.1 million and $12.3 million for the fourth quarter and year ended December 31, 2016, respectively, and $2.5 million and $8.4 million for the comparable periods in 2015.

BLCM ended 2016 with cash, restricted cash and investments totaling $113.4 million, compared to $150.4 million at December 31, 2015. In March 2017, Bellicum borrowed the final $10.0 million tranche under its agreement with Hercules Capital.

Based on current operating plans, Bellicum expects that current cash resources will be sufficient to meet operating requirements through at least Q1/18.

Projected cash outlays in 2017 include approximately $15 million for capital projects, primarily the completion of the buildout of in-house U.S. manufacturing facilities.

 

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.