January 24, 2018 5:01pm

11:30 am marked the dramatic downdraft in sector pricing as 24 of 40 sector “participants” cratered

As I had stated, “a sector who’s pricing rocketed … is now deemed to be problematic after dramatic upsides with a here today and gone tomorrow appreciation …”

 

The NASDAQ (-0.61%), IBB (-0.78%), XBI (-1.57%) and IWM (-0.63%) were down while the XLV (+0.30%) was up

 

Question of the day, if the KITE and JUNO deals did not happen – where would the sector be trading?

 

Pre-open indications: 4 hits and 4 miss

 

Out and about: ReNeuron (RENE.L +136.10) jumps on 1 for 100 reverse – why wouldn’t it?

The Biostage (BSTG +$0.00) chronicles …not trading again!


Wednesday’s results have implications to Thursday’s sector activity as a daily report may say little or a lot and it serves as insurance that all indications are being examined and evaluated!

 

Henry’omics:

From the pre-open’s newsletter, “…sentiment is an attitude which allows momentum to be measureable. Celgene’s (CELG) acquisition of Juno therapeutics (JUNO) rates applause; yet what does it say about sector equities that followed the curve and played catch-up on valuation … Are you willing to trade based on this emotion; consider scenario analysis?”

As I stated in the pre-open post, “I believe profits will start to be taken and exercised in the push of the sell button.”

In the last year or so, as the markets rallied nicely, biotech has decidedly returned to favor. The SPDR Biotech ETF XBI, -1.00% has surged more than 50% in the last 12 months and the iShares Biotechnology ETF IBB, -0.21%   is up roughly 30% versus about 25% gains for the S&P 500 SPX, +0.34%  in the same period.

But, the RegMed, stem, gene and cell therapy sector has only bloomed as KITE and JUNO were acquired.

·         The recent acquisition of Juno Therapeutics JUNO for $9 billion by Celgene (CELG) proves that you don’t have to be a tiny $100 million biotech to see interest from larger players. The premium bid added about 90% to JUNO shares in short order, and investors in the mid-sized biotech sector have been delivered a huge payday in short order that rivals the premium paid for small-cap acquisition targets. <MarketWatch>

·         The JUNO deal will certainly not be the last buyout in the sector this year!

But the million dollar question is, “who will be next?”

The case of BLUE being the next fish in the net:

·         bluebird Bio (BLUE)  has a market capitalization of about $8 billion, but once again the valuation here is warranted.

·         The biggest reason is a cancer therapy for multiple myeloma that saw pretty big success in December, with more than half of patients seeing a complete recovery from the disease. <MarketWatch>

·         BLUE shares rallied roughly 20% in six weeks on the news. And looking forward, it’s important to note that the trial was undertaken in partnership with mega-biotech firm Celgene (CELG) — which should instantly stoke buyout interest.

·         Multiple myeloma is a fairly common blood cancer without many good treatments, and this drug would be an instant blockbuster upon approval.

·         And beyond this treatment, BLUE has other promising late-stage trials in the works to prove it’s not a one trick pony. CELG would have to be nuts to take a pass after learning the details of this trial up close — and if it does pass, you can be sure some other Big Pharma name will make a move in 2018.

A reasonable question to ask … if the KITE and JUNO deals did not happen – where would the sector be trading?

 

 

The advance/decline line scenario of 40 SCGT & RT covered companies:   

·         The open was positive with an A/DL of 22/13 and 5 flat ;

·         The mid-day was negative with an A/DL of 15/24 and 1 flat;

·         The close was negative  with an A/DL of 16/22 and 2 flat;

 

Pre-open indications:

  • Applied Genetic Technologies (AGTC) closed up +$0.05 – miss;
  • bluebird bio (BLUE) closed up +$7.25 – miss;
  • Capricor (CAPR) closed down -$0.03 – hit;
  • Fate Therapeutics (FATE) closed down -$0.80 – hit;
  • Regenxbio (RGNX) closed down -$1.15 – miss;
  • Stemline Therapeutics (STML) closed up +$1.20 – miss;
  • uniQure (QURE) closed down -$1.24 – hit;
  • Verastem (VSTM) closed down -$0.20 – hit;

 

 

MY working trend lines:

The greatest volume to the downside:  JUNO, XON, ADRO, VSTM and IMUC

Upside volume was weighted to:  VTGN, STML, SGMO, CYTX and MDXG

Biggest $ downside:  CLLS (-$1.87), QURE (-$1.24), ONCE (-$1.19), RGNX (-$1.15) and AXGN (-$0.95)

Largest $ upside:  RENE.L (+136.10 – after a 1-for-100 reverse), BLUE (+$7.25), STML (+$1.10), OSIR (+$0.20) and ADVM (+$0.35)

Flat: VCEL and BSTGD

 

 

Out and about:

Biostage (BSTGD) This management team WIPED OUT 20 M of holder’s shares and investment!

Previous close of $2.70 didn’t trade today, not a share – two days so far?  This follows the projected $1.32 post the 1-to-20 reverse split – a $4 M in-flow just followed a $30 M investment loss incurring a $47 M deficit!

NO scientists, a CEO, CFO and 2 accountants don’t make a company who couldn’t pay their rent or communicate their issues to past “fleeced” shareholders …

I am NOT “eating” my negative declaration, my OPINION is still “COVER UP of male and female harassment and corporate MISDEEDS “by members of management team!

What did happen to (reasons) and the story “around” the IND NOT being filed and the cmo and president leaving the company? NEVER forget the storyline of the 2 broken financings before the reverse split!

http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=11980760&type=HTML&symbol=BSTGD&companyName=Biostage&formType=3&dateFiled=2018-01-10&cik=0001563665 – VERY interesting, NO mention of BSTG’s executives!

 

 

Daily analytics:

U.S. stock benchmarks fought for firm footing in up-and-down trade on Wednesday, which saw the Dow, produce a triple-digit price swing, as technology stocks came under selling pressure.

·         The Dow was up 44 points, or 0.2%, at 26,254.

·         The S&P 500 index added about a point, or less than 0.1%, at 2,840.

·         The NASDAQ was down 31 points, or 0.4%, at 7,428.

 

The CBOE Volatility Index (VIX) widely considered the best gauge of fear in the market, Wednesday traded at 11.42, up 2.88% …

  • Tuesday traded at 11.10, up +0.63% after Monday traded at 11.03, down -2.13% after Friday traded at 11.20, down -8.35% after Thursday traded at 12.22, up +2.60% and last Wednesday traded at 11.91, up +2.14% …

 

Welcome to another day of the sector’s roller coaster …

… The iShares Russell 2000 (IWM) indicated:

·         Wednesday was down -0.63%

·         Tuesday +0.31%

·         Monday +0.53%

·         Friday +1.32%

·         Thursday -0.70%

·         Last Wednesday +0.96%

 

… The iShares NASDAQ Biotechnology (IBB) indicated:

·         Wednesday was down -0.78%

·         Tuesday +1.12%

·         Monday +3.14%

·         Friday +0.66%

·         Thursday  -0.13%

·         Last Wednesday +0.73%

 

 

The count - decliners versus gainers:

……. look at the differences in decliners:

·         Wednesday’s decliners ranged from -0.08% <JUNO -$0.07> to -11.36% < ADRO -$0.875> in22 equities;

·         Tuesday’s decliners ranged from -0.16% <JUNO -$0.14> to -4.17% <AST -$10> in 9 equities;

·         Monday’s decliners ranged from -0.36% <BLFS -$0.02> to -12% <NWBO -$0.02> in 9 equities;

·         Friday’s decliners ranged from -0.06% <QURE -$0.01> to -7.88% <ISCO -$0.13> in 18 equities;

·         Thursday’s decliners ranged from -0.37% <STML -$0.05> to -9.68% <RENE.L -$0.15> in 20 equities;

·         Last Wednesday’s decliners ranged from -0.12% <BLCM -$0.01> to -6.75% <ISCO -$0.11> in 18 equities;

Versus

… Look at the percentage’s (%) and spreads …

·         Wednesday’s gainers ranged from +0.25% <SGMO +$0.05> to +9,721.43% <RENE.L +$136.110 after a 1-for-100 reverse> in 16 equities;

·         Tuesday’s gainers ranged from +0.07% <MDXG +$0.01> to +10.01% <FATE +$0.83> in 27 equities;

·         Monday’s gainers ranged from +0.52% <ATHX +$0.01> to +26.82% <JUNO +$18.19> in 26 equities;

·         Friday’s gainers ranged from +0.67% <PSTI +$0.01> to +5.80% <ADRO +$0.40> in 21 equities;

·         Thursday’s gainers ranged from +0.17% <MESO +$0.01> to +18.31% <CYTX +$0.06> in 15 equities;

·         Last Wednesday’s gainers ranged from +0.33% <VSTM +$0.01> to +53.86% <JUNO +$23.65> in 19 equities;

     

                             

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.