March 31, 2017 8:08am

 

One way to screw-up a company’s future …

Utilize a false narrative or its newest moniker – “fake news”

 

Pre-open indications:  six (6) – 5 SELLS, 1 BUY

 

Critical information ahead of “our” universe’s open! I provide intelligence and analysis for short and near-term investment.

 

The sector is what it is, until it isn’t and even then it doesn’t seem to be…

 

Readership is a team sport, are you on it?

 


 

Expectation is the word for 2017 – meeting the unknowns with the soon to be exposed concerns will be the subject of investing decisions throughout this year.

 

 

Dow futures are DOWN -0.13% and NASDAQ futures are DOWN -0.12%

 

U.S. stock index futures pointed to a lower open on Friday as traders eyed a batch of data.

European markets moved lower as investors digested the new EU guidelines to a potential Brexit deal and reacted to a cabinet reshuffle in South Africa.

Asia markets finished mixed on the final day of trading in March, as investors await two expected executive orders by President Trump which will tackle trade deficit and tariff enforcement.

 

Daily docket: Personal income, consumer spending, and core PCE prices are all due at 8:30 a.m. ET, while Chicago PMI is set to come out at 9:45 a.m. ET. Consumer sentiment is slated to be released at 10:00 a.m. ET.

 

 

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

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

·         Thursday closed NEGATIVE with 24 decliners, 18 advancers and 1 flat;

·         Wednesday closed POSITIVE with 14 decliners, 24 advancers and 5 flats

·         Tuesday closed POSITIVE with 19 decliners, 21 advancers and 3 flats;

·         Monday closed POSITIVE with 8 decliners, 33 advancers and 2 flats;

·         Last Friday closed POSITIVE with 13 decliners, 27 advancers and 3 flat;

 

 

Remembering Thursday’s closing bell newsletter, “The sector’s Icarus effect … with a hard landing after the sector had five positive closes. Muted trading has been the norm as the sector ebbed and flowed as the NASDAQ logged a record close.”

Reiterating, “Thursday’s decline was fueled by five (5) positive closes as the weekend approaches. Friday could be a SELL button day as being TOO long – will have a detrimental effect!”

 

Referencing the title, “false narrative i.e. less than factual” has lately become the only news to emanate from Biostage (BSTG).

Press releases have been ambiguous. BSTG has mase several claims in various releases that are NOT substantiated in their annual report (10-Q), read the 10-Q to support my journalistic thesis or opinion!

The real question is WHAT are the prerequisites for the recent “presidential” promotion and is there a relationship to five (5) VP “defections” or is it related to the “unpublished” peer reviewed scientific paper with MAYO after Nanofiber published a comparable article with another collaborator!

Conflict of interests are still noticed in the annual report related to the “past spinout from Harvard BIO (HBIO) re a non-adjudicated  tax consequence” and one of my lingering questions, why does a board member charge $165 K to recruit another BOD member as the CEO?

 “BSTG may also be sued for infringing on the intellectual property or confidentiality rights of others, including the patent rights, trademarks and trade names and confidential information of third parties. Biostage has received correspondence from legal counsel to Nanofiber Solutions, Inc. (NFS), claiming that in developing their scaffold product and related intellectual property, BSTG may have committed misappropriation, unauthorized use and disclosure of confidential information, and possible infringement of intellectual property rights of NFS.” <Source: annual report>

“BSTG has also received correspondence from legal counsel to UCL Business PLC, or UCLB, challenging the validity of the assignment of certain patent applications that have been assigned to BSTG by Dr. Macchiarini. We have also received correspondence from an academic researcher implying that one of its research bioreactor products may violate an issued patent.”<Source: annual report>

There will be a lot of financial anxiety …

Especially IF BSTG exercises 20 M warrants for another $8.5 M but, they end-up with severe dilution of 58 M shares compared to the 37.1 M currently outstanding. <Source: updated prospectus>

And is there then, a potential of a reverse split …?

As I have read, when do investors know when its time to relieve their investment’s “supposed or purported” fiduciary representatives?

 

And, unfortunately – the list goes on – look to future reporting, as a journalist - I am just getting started!

 

 

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 down -0.35% and was UP +0.5% in the aftermarket before Friday’s open;

·         The SPDR S&P Biotech ETF (XBI) closed Thursday down -0.69% and was UP +0.07%  in in the aftermarket before Friday open;

·         The Health Care Select Sector SPDR ETF (XLV) closed up +0.01% Thursday and was DOWN -0.17% before Friday’s open;

·         The iShares Russell 2000 (IWM) closed up +0.32% on Thursday and UP +0.02% in the after-market before the open

                                                                                   

 

Companies in my headlights:

Athersys (ATHX) closed UP +$0.46 to $1.90. As I had stated, I am NOT a fan.  If I left money on the table after a research report,  a paper, rock or scissors approach.  Check out the salaries, bonuses, attendance pay for the CEO’s own BOD meetings as applied to the breath of the stock’s past two year’s runway – Maintaining SELL;

Biostage (BSTG) closed DOWN -$0.0174 to $0.36. It’s a question of substance versus hyperbole, after having stated they raised $8 M in selling 20 M shares, BSTG only received $6.8 M in proceeds <that they didn’t mention except in the annual report>.  BSTG also stated they ended FY16 with $2.94 M in cash, but they also had $2.77 M in accrued liabilities at year’s end. The issue is cash on hand to handle the $2.5 M to 3 M quarterly burn. Combine the proceeds of $6.8 M and the $17 K will barely extend the needed runway to file an IND.  Do half-truths in press releases constitute “fake news” or as I call it a false narrative? The words in releases are correct, but the true facts are a bit shy of reality! The aftermarket indication is a negative -$0.0083 or -2.25% - Maintaining SELL;

Cellectis (CLLS) closed up +$0.09 to $24.03 after Wednesday’s $23.94 (-$0.04) after Tuesday’s $23.98 (+$0.08). CLLS had been getting a little too rich for me as the sector carousel revolves and the market music continues to sound. The aftermarket indication was -$0.06 or -0.25% – Maintaining SELL;

Juno Therapeutics (JUNO) closed UP +0.34 to $21.96 following Wednesday’s $21.62 (+$0.65). The roulette table is turning with an aftermarket indication of -$0.15 or -0.69% – Maintaining SELL;

Spark Therapeutics (ONCE) closed up +$0.24 to $53.75 following Wednesday’s $53.51 (+$0.74). The aftermarket was positive +$0.11 or +0.20% - Maintaining BUY;

Verastem (VSTM) closed UP +$0.16 to $2.21. VSTM has been on a roll but has never tried to protect their upside with relevant news or research analyst reporting. It has been a trading target as the share pricing has appreciated +$0.76 since March 22’s $1.45. The aftermarket indication is negative -$0.35 or -15.84% - 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.