RegMed Investors’ (RMi) pre-open: riding the upside as Celgene (CELG) prices acquisition of Juno Therapeutics (JUNO) at $87 per share or $9 B

January 22, 2018 8:11am

Momentum is a force gained by moving objects – The iShares Nasdaq Biotechnology (IBB +0.89%), the SPDR S&P Biotech ETF (XBI +1.61%); the Health Care Select Sector SPDR ETF (XLV +0.06%) while the iShares Russell 2000 (IWM) is indicating a NEGATIVE -0.16% in Monday’s pre-open

Unfortunately, other record gains have seen some losses with directionless pricing and diffused volatility are tainting the sentiment

We are also seeing decreases in volume and increased volatility

Outlook, precarious … as government shutdown continues even with JUNO’s upside at $18.43 or +27.18% pre-market

Pre-open indications: 1 SELL and 5 BUYs

Negative open expected

Dow futures are DOWN -0.17% (-45 points) and NASDAQ futures are  DOWN -0.00% (-0.25  points)

U.S. stock index futures fell into the red ahead of the open Monday, as investors pondered what the government shutdown will mean for markets.

European shares were mixed, as investors monitored a U.S. government shutdown and political developments in Germany.

Asian markets closed mixed as investors kept an eye on political developments in the U.S. after a government shutdown began last week.

Issues that will affect the trading day: the Senate is expected to try to restore federal funding again, whether on a temporary basis or for longer, while trying to fix an issue over immigration. A vote by the Senate is set to be held at 12 p.m. ET Monday that, if successful, would provide funding to the government.

Data docket:  NO major data

Issues on the political front: On Saturday, the U.S. government shut down after a bill that would have kept government funded through mid-February was voted against in the Senate. This marked the first U.S. government shutdown since 2013.

Last week’s RegMed, stem and cell therapy sector’s record over 5 sessions (of 40 covered companies):

·         Friday closed closely POSITIVE with 18 decliners, 21 advancers and 1 flat;           

·         Thursday closed NEGATIVE with 20 decliners, 15 advancers and 5 flats;

·         Wednesday closed barely POSITIVE with 18 decliners, 19 advancers and 3 flats;

·         Tuesday closed NEGATIVE with 31 decliners, 9 advancers and 0 flats;

·         Last Monday was a market holiday

Henry’omics:

From Friday night’s closing bell post, “…the sector has a crisis in confidence. What’s a good price for individual sector equities?  It’s still based on fundamental and speculative opinions which have major limits of their own.”

As I had stated, “The RegMed, stem and cell therapy sector in the New Year 2018 is unfolding; finding they never have been less secure as to share pricing! With investor anger rising, ETFS and algorithms are taking more than their pound of flesh on a daily basis of investor dollars.”

Reiterating, “With investor anger rising, ETFS and algorithms are taking more than their pound of flesh on a daily basis of investor dollars.”

The NEWS of the day ... JUNO’s pricing– generates appreciation – as $67.81 leaps to $87.00!

Today’s indications:

• The iShares Nasdaq Biotechnology (IBB) is indicating a POSITIVE +0.89% in Monday’s pre-market;
• The SPDR S&P Biotech ETF (XBI) is indicating a POSITIVE +1.61% in Monday’s pre-market;
• The Health Care Select Sector SPDR ETF (XLV) is a POSITIVE +0.06% indicating in Monday’s pre-open;
• The iShares Russell 2000 (IWM) is indicating a NEGATIVE -0.16% in Monday’s pre-open

Companies in my headlights:

Applied Genetic Technologies (AGTC) closed up +$0.10 to $4.10 with 57.8 K shares traded <3 month average = 102.3 k shares>. On Thursday, AGTC closed up +$0.05 to $4.00 after Wednesday’s -$0.05 to $3.95 with 65.7 K shares traded after Tuesday’s $3.95 and the previous Friday’s $4.20. AGTC has clinical trial timing issues and spending woes – BUY to SELL;

Bellicum Pharmaceuticals (BLCM) closed down -$0.19 to $7.80 with shares 1.046 M traded <3 month average = 422.2 shares>. BLCM has been trading down since 1/2/18’s $9.23 having seen a high of $9.79 and a low of $7.80 (1/19/18). Even more concerning, the Houston-based biotech lost over 38% of its value in 2017. BLCM's shares have been declining simply because the company continues to fall further and further behind the industry leaders in cell therapy arena. BLCM's saving grace, though, may be its controllable switch technology that could give it the safest and most potent cell therapies in the space. <Motley Fool>. Having said that, Gilead recently bought Cell Design Labs to pursue a similar line of controllable cell therapies, and Juno's next-generation chimeric antigen receptor T cell therapy, JCAR017, is, so far, yielding unprecedented safety results in its ongoing trial for advanced non-Hodgkin lymphoma.  Oversold – BUY;

bluebird bio (BLUE) closed down -$6.15 to $175.95 with 739.6 K shares traded <3 month average = 927.4 K shares>up +$6.85 to $182.10 with 1 M shares traded <3 month average = 914.3 K shares>  after Thursday’s $182.10, Wednesday’s +$11.90 to $175.25 with 1.8 M shares traded after Tuesday’s -$7.35 to $163.35. Last week, the stock has run from $163.35 to $182.10 t and then there’s Friday’s $175.95. The pre-market indication is a positive +$4.05 or +2.30% after Friday’s dip – BUY;

Intrexon (XON) closed down -$0.63 to $13.00 with 5.7 M shares traded <3 month average = 1.836 M shares> after Thursday’s  -$0.62 to $13.63 with 2.139 M shares traded after Wednesday’s +$0.48 to $14.25 with 4.259 M shares traded after Tuesday’s -$0.94 to $13.77. After an offering, there are 6 M new shares being added to the float of 61.54 M and the 120.72 M outstanding.  XON started 2018 at $13.47, having seen a high of $14.71 and a low of $12.72 – SELL to BUY;

Juno Therapeutics (JUNO) closed down -$3.56 to $67.81 with 5.2 m shares traded <3 month average = 2.83 M shares> after Thursday’s +$2.12 to $71.37 with 8.23 M shares traded after Wednesday’s +$23.65 upswing to $69.25 with 21.8 M shares traded following Tuesday’s -$3.15 to $45.60 and was up +$22.40 or +49.12% on news and rumor of Celgene (CELG) making an acquisition move on its partner. After the on-going question of the value as compared to the KITE acquisition by GILD. Investors will be experiencing an $87 purchase price for $9 B–BUY;

uniQure (QURE) closed down -$0.01 to $17.99 with a pre-market indication of +$1.61 or +8.95% as QURE received an Orphan Medicinal Product Designation (OMPD) from the European Medicines Agency. AMT-130 represents the first investigational AAV-gene therapy in Huntington’s disease to receive such designation. In October 2017 QURE announced that the U.S. FDA granted orphan drug designation for the same indication – BUY;

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.