May 3, 2018 8:00am

Platforms and development are always sketchy; it’s the cash position that will define the runway of progress

And it ain’t for a faint-hearted investor as one clinical endpoint miscue could totally destabilize a share’s pricing

 

Q1/18 quarterly results: Sage Therapeutics (SAGE)

Pre-open indications: 5 BUYs and 4 SELL

 

A daily report may say a little or a lot, but it serves as insurance that all indications are being examined and evaluated!

So here we are where the understanding of the indications sheds light on share pricing!

Flat to mixed open expected

Dow futures are UP +0.10% (+23 points) and NASDAQ futures UP +0.06% (-4 points)

 

U.S. stock index futures pointed to a down open on Thursday morning, amid waning hopes of real progress in U.S.-Sino trade talks.

European markets lower

Asian stocks finished mixed, with Hong Kong leading losses before the market close. Trade talks between officials from the U.S. and China were in focus as some investors worried about trade tensions.

 

Data docket: jobless claims for the week ending April 28 posted at around 8:30 a.m., while services PMI (Purchasing Managers' Index) data for April and factory orders for March are scheduled to be published during mid-morning trade.

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is NOT indicating in Thursday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is indicating a NEGATIVE -0.09% downside in Thursday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Thursday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a NEGATIVE -0.1% downside in Thursday’s pre-open

 

Henry’omics:

Today’s moves:  The moves in premarket trade come ahead of much-anticipated talks between Treasury Secretary Steven Mnuchin and Chinese Vice-Premier Liu He. Shortly before the talks were set to take place in Beijing, the mood between the world's two largest economies worsened amid reports the U.S. administration is considering taking executive action to restrict some Chinese firms' ability to sell telecoms equipment. <CNBC>

From Wednesday’s night’s newsletter: the wall of worry is being climbed; the question, are we snapping out of the doldrums, not quite yet - as expectations are very fickle. Bada bing bada boom, the NASDAQ (-0.42%) and IBB (-1.32%) were down. Refuge is being flat in a fluctuating sector.”

 

Can't worry about what I can't influence - so be cautious and recognize their are times to SELL based on - a "drop of a dime", It's better to shut-down the computer, take a walk or bike ride but, don't be like me trying to clear the yard of boulders and hurt youself - we are not 35 anymore!

My biggest issue are indicators and indexes are flashing a yellow cautionary signal even with daily proposed BUYS outweighing my percieved SELLs!!! (that's 3!)

 

Review the past session of 45 covered companies – new batting line-up:

  • Wednesday closed POSITIVE with 15 decliners, 22 advancers and 8 flats;
  • Tuesday closed POSITIVE with 15 decliners, 25 advancers and 5 flats;

 

A re-cap:

  • A new month to measure … in the first sessions in May,  two (2) positive close;
  • In the last six (6) sessions, the iShares NASDAQ Biotechnology (IBB) was down in three (3) and up in two (2) session for an aggregate of negative -0.53% after Wednesday’s -1.32, Tuesday’s +0.39%, Monday’s -1.86%, Friday’s +0.29%, Thursday’s +1. 98% and last Wednesday’s -0.01%
  • Wednesday’s decliners ranged from -0.11% <XON -$0.02 > to -4.40% <BMRN -$3.79> in 15 equities;
  • Wednesday’s gainers ranged from +0.26% <IONS +$0.11 > to +5.66% <SLDB +$0.83 > in 22 equities;

 

My daily evaluation: I am NOT “feelin’ the love” today as sector equities look to be headed for a mild bounce at the open Thursday, as investors continued to decipher the Fed’s policy signals, brace for corporate earnings as talks initiated with China but, be ready for ANYTHING to hit the market from leaks from Washington D.C..

 

Company in my headlights:

Aduro Biotech (ADRO) closed up +$0.25 to $7.25 with the “earning” i.e. LPS (loss-per-share) being announced - on a per-share basis, it had a net loss of $21.5 M or -$0.28 per share. The results exceeded “street” expectations posting revenue of $6.6 million, also exceeding forecasts. Aduro’s shares have declined slightly more than 3% since 1/2/18 and in the final minutes of trading on Wednesday, shares hit $7.25, a decrease of 25% in the last 12 months. The aftermarket projects a downside of -$0.03 or -0.48% - SELL;

Alnylam Pharmaceuticals (ALNY) closed down -$2.16 to $90.02 with 1.197 M shares traded <3 month average = 1 M shares>. ALNY has reached alignment with the U.S. FDA on a pivotal study design for lumasiran, an investigational RNAi therapeutic for the treatment of primary hyperoxaluria type 1 (PH1). ALNY and the FDA have aligned on a primary endpoint for the pivotal study based on reduction of urinary oxalate at six months, a biomarker directly linked to the pathophysiology of PH1 and known to be well correlated with disease progression. In addition, ALNY and the FDA have aligned-on a study size of approximately 25 patients with PH1. Based on the discussions with the FDA, ALNY is on track to start the P3 study in mid-2018 and is now guiding that it expects to report topline results in 2019 and, if positive, to submit an NDA in early 2020. Lumasiran was recently granted Breakthrough Therapy Designation from the FDA and Priority Medicines (PRIME) designation from the European Medicines Agency (EMA). Consider the heights of the share’s pricing since 1/2/18 and its downfall through mid – April and the month of May so far; on news – BUY;

bluebird bio (BLUE) closed down -$3.95 to $172.50 with 736.1 K shares traded <3 month average = 749 K shares>. BLUE announced Q1 and BLUE’s “plans remain on-track for our first regulatory filing in Europe for TDT, we are rapidly advancing development of bb2121 for patients, and we are focused on future innovation platforms.” Cash, cash equivalents and marketable securities as of 3/31/18 was $1.57 billion. The aftermarket indication is an upside of $1.15 or +0.67% - BUY;

Cellectis S.A. (CLLS) closed up +$0.67 to $28.86 with low volume of 174 K shares traded <3 month average = 319.7 K shares>.  CLLS has submitted an IND application to the FDA to initiate a P1 clinical trial for UCART22, its second TALEN® gene-edited product candidate, for the treatment of B-cell acute lymphoblastic leukemia (B-ALL) in adult patients. Pending regulatory clearance, CLLS plans to initiate a clinical trial in Q3/18. News usually sets the tone of most upsides as the aftermarket projects an upside of $0.64 or +2.22% – BUY;

CRISPR Therapeutics (CRSP) closed up +$1.11 to $48.53 with 955.4 K shares traded <3 month average = 1.196 M shares>. Up, down- is also an exercise – it got “old” when I was young. April started at $43.27, March at $46.54, February at $38.48 and January ’18 at $23.52 – having “loved” the news surrounding the technology but, I say lighten the load and sell to comeback post Q1 result’s announcement. The aftermarket indicates a downside of -$0.02 or -0.04% – SELL;

Sage Therapeutics (SAGE) closed down -$1.13 to $146.60 after Tuesday’s +$3.81 to $147.73 with 268 K shares traded <3 month average = 670.7 K shares>. After a high 4/13 of $170.58 following 3/15’s $174.05, 2/1’s $192.33 having started 2018 at $166.66 -although Q1 quarterly results are due today with a question of expectation versus consensus – BUY to SELL;

uniQure (QURE) closed up +$0.57 to $30.42 with 690.2 K shares traded <3 month average = 360.8 K shares> after Tuesday’s +$0.65 to $29.85 with an aftermarket indication of a downside -$0.10 or -0.32% so far due to a proposed 4.5 million (increased 500 K shares> offering and an increased 675 K overallotment priced at $28.50– Maintaining  SELL;

Spark Therapeutics (ONCE) closed down -$0.84 to $74.11 with 515.4 K shares traded after Tuesday’s -$1.37 to $74.95 with 549.3 K shares traded <3 month average = 654.2 K shares> after Monday’s -$1.15 to $76.32 with 512.9 K shares traded after Friday’s +$0.35 to $77.47.  ONCE should be up having entered into an agreement to sell its rare pediatric disease priority review voucher (PRV). The PRV was received when LUXTURNATM (voretigene neparvovec-rzyl) was approved by the U.S. FDA. Per the terms of the agreement with Jazz Pharmaceuticals (JAZZ), ONCE will receive $110 million upon closing of the transaction – Maintaining BUY;

Verastem (VSTM) closed up +$0.20 to $4.39 with 1.8 M shares trading <3 month average = 820.4 K shares>. Momentum and speculation go hand and hand; the aftermarket indication has an upside of +$0.21 or +4.78% also hosted “Analyst Day” in NYC - 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.