RegMed Investors’ (RMi) closing bell; yippee-yi-yo-ki-yay, the sector got on the horse

May 7, 2018 5:29pm

One pattern of Q1 “earnings”, lucky to being announced;  expectations have seen pricing “fall” in the period from a day or two before the release to jumping two days after …

Consensus is about to be a smack to pricing as LPS (loss-per-share) of the smaller-caps

I believe there is more to cash positions than ever before

Q1/18 “earnings”: Ultragenyx Pharmaceuticals (RARE) closed up +$3.46 to $57.96 and is up +1.54 or +2.66% in the aftermarket; Cellectis SA (CLLS) closed down -$0.12 to $28.89 and is up +$0.26% in the aftermarket and Global Blood Therapeutics (GBT) closed up +$1.70 to $45.30 and is stable in the aftermarket

Out and about: AxoGen (AXGN) proposes 2 M share offering

End of day briefing; the “numbers” speak; if you know what happened today, you’ll understand what you need to do tomorrow!

Henry’omics:

Today’s moves … sector equities kicked off the week trading higher on Monday

Some sector “names” stocks kept the lights on: SAGE, ALNY (again), RARE, CRSP and ONCE

While losers hid in the open – SLDB, FIXX, VSTM, MESO and STML

The advance/decline line scenario of 45 covered companies:   

• The open started positive with an ADL of 34/9 and 2 flats;
• The mid-day stayed positive with an A/DL of 34/11 and 1 flat;
• The close concluded positive with an A/DL of 29/15 and 1 flat;

From Monday’s pre-open newsletter, “…another week of quarterly results; this week’s count are sixteen (16) releases in the sector which usually beget a downdraft before they are announced - another ride on a slippery slope …? And then, once LPS (loss-per-share) releases are out, what’s the recovery period without news?”

MY working five (5) trend lines:

… The greatest volume to the downside:  VSTM, BTX, SLDB, PSTI and ATHX

… Upside volume was weighted to:  SGMO, ADVM, IONS, CRSP and ALNY

… Biggest $ downside:  SLDB (-$1.07), FIXX (-$0.45), VSTM (-$0.22), MESO (-$0.122) and STML (-$0.15)

… Best moves to the $ upside:  SAGE (+$6.38), ALNY (+$5.07), RARE (+$3.46), CRSP (+$2.63) and ONCE (+$2.54)

… Flats: CUR

Q1/18 financial results i.e. earning – the LPS (loss-per-share) skirmish:

Ultragenyx Pharmaceuticals (RARE) …

Platform development:

With the recent approvals and launches of Crysvita in the US and EU, RARE has transformed into a commercial stage company with two medicines now available for patients.

• RARE is conducting P2 and P3 studies of burosumab in patients with XLH and TIO, both rare diseases that impair bone mineralization; a P2 clinical study of UX007 in patients severely affected by LC-FAOD, a genetic disorder in which the body is unable to convert long chain fatty acids into energy; a P3 study for UX007 in patients with Glut1 DS, a brain energy deficiency, who are experiencing movement disorders; a P1/2 study of DTX301 gene therapy in OTC deficiency, a urea cycle disorder that causes ammonia to accumulate in the blood; and a P1/2 study of DTX401 gene therapy in GSDIa, a disease that arises from a defect in G6Pase, an essential enzyme in glycogen and glucose metabolism.

The “numbers”:

Net income of $30.3 million, or $0.63 per basic share and $0.62 per diluted share, compared with a net loss for Q1/17 of $68.3 million, or $1.63 per share, basic and diluted,

• The income for Q1/18 includes the $130 million gain from the sale of the priority review voucher (PRV),
• Reported $10.7 million in total revenue, which includes $1.3 million in product revenue from Mepsevii™ (vestronidase alfa) and UX007, and $9.4 million in collaboration and license revenue, primarily from its research agreement with Bayer,
• Equity financing of approximately $271 million: In January 2018 completed an offering, with net proceeds of approximately $271 million,

Cash, cash equivalents, and investments were $571.3 million as of 3/31/18.

RARE closed up +$57.96 yet is DOWN -$0.38 or -0.65% in the aftermarket

Cellectis SA (CLLS) …

Platform development:

• IND filing for UCART22 in Acute Lymphoblastic Leukemia (ALL)
• On May 2, 2018, filed an IND with the FDA for its UCART22 product candidate to be investigated in a PI clinical trial in ALL patients - this submission marks the third UCART product candidate IND application,
• On May 1, 2018, Cellectis announced that the Recode Project, a part of Genome Project-Write, will use Cellectis’ TALEN® gene editing technology to seek to create the first virus-resistant human cells for manufacturing therapeutics and develop new cell-based therapies,
• On April 3, 2018, Pfizer (PFE) and Allogene Therapeutics, Inc. (“Allogene”) entered into an asset contribution agreement, the closing of which was announced on April 9, 2018, pursuant to which Allogene purchased PFE’s portfolio of assets related to allogeneic CAR T-cell therapy (the “Asset Contribution Transaction”), including the Research Collaboration and License Agreement dated June 17, 2014 (as amended from time to time, the “Collaboration Agreement”) signed between Pfizer and Cellectis.

The “numbers”:

A net loss of $19.8 million (or $0.56 per share) compared to $25.4 million (or $0.71 per share) in Q1/17,

• CLLS remains eligible to receive clinical and commercial milestone payments of up to $2.8 billion, or $185 million per target for 15 targets, and tiered royalties in the high single digits on net sales of any products that are commercialized by Allogene under the collaboration agreement.
• $190.5 million raised in a follow-on offering. On April 10, 2018, Cellectis closed a follow-on offering of 5,646,000 American Depositary Shares, each representing one ordinary share of Cellectis (“ADS”), at a public offering price of $31.00 per ADS.

As of 3/31/18 had $282.1 million in total cash, cash equivalents and current financial assets compared to $ 297 million as of 12/31/17.

“Runway”: through 2021

CLLS closed down -$0.12

Global Blood Therapeutics (GBT) …

Platform development:

• Continued to remain focused on the clinical development of voxelotor for the treatment of sickle cell disease

The “numbers”:

Net loss forQ1/18, was $41.6 million or -$0.87 compared with $23.3 million or -$0.60 for Q1/17,

• Raised approximately $240.5 million in net proceeds, after deducting underwriting discounts and commissions and estimated offering expenses, from an offering and related exercise of the over-allotment option in March 2018,

Cash, cash equivalents and marketable securities totaled $544.6 million compared with $329.4 million at 12/31/17.

“Runway”: through 2020

Out and about:

AXGN has proposed a 2 M share offering. In addition, AxoGen expects to grant the underwriters a 30-day option to purchase up to an aggregate of an additional 300,000 shares of common stock sold in connection with the offering at the public offering price.

• AXGN closed up +$0.65 to $43.15 and is down -$1.25 or -2.90% so far …
• With 34.68 m shares outstanding and a float of 27.82 M

Jefferies LLC and Leerink Partners LLC are acting as joint book-running managers for the offering. William Blair & Company, LLC  and JMP Securities LLC are acting as co-managers.

Daily analytics:

Stocks gave back most of their gains on Monday after President Donald Trump tweeted he will be announcing his decision on the deal on Tuesday. The tweet also knocked the wind out of energy stocks, which had been the main driver in the stock market.

• The Dow rose 73 points or +83.29 points to 24,345.80,
• The S&P 500 gained 0.22% or +4.54 to 2669.00,
• The NASDAQ advanced 0.63% or +50.50 to 7257.66.

The CBOE Volatility Index (VIX) widely considered the best gauge of fear in the market,

• Monday traded at 14.75, down -0.14%
• Friday traded at 14.77, down -7.11 %
• Thursday traded at 15.90 , down -0.44% …
• Wednesday traded at 15.97, up +3.10 %
• Tuesday traded at 15.49, down -2.76%
• Last Monday traded at 16.05, up +4.15%

The iShares Russell 2000 (IWM) indicated:

• Monday was up +0.84%
• Friday +1.22%
• Thursday -0.55%
• Wednesday +0.36%
• Tuesday +0.46%
• Last Monday -0.90%

The iShares NASDAQ Biotechnology (IBB) indication:

• Monday was up +0.64%
• Friday +1.06%
• Thursday -1.36%
• Wednesday -1.32%
• Tuesday +0.39%
• Last Monday -1.86%

The count in May - decliners versus gainers:

……. look at the differences in decliners:

• Monday’s decliners ranged from -0.25% < RGNX -$0.10> to -5.67% <SLDB -$1.07 > in 15 equities;
• Friday’s decliners ranged from -0.28% <XON -$0.05 > to -16.14% <ADVM -$1.025 > in 8 equities;
• Thursday’s decliners ranged from -0.08% <BMRN -$0.07> to -4.97% <SGMO -$0.85 > in 29 equities;
• Wednesday’s decliners ranged from -0.11% <XON -$0.02 > to -4.40% < BMRN -$3.79> in 15 equities;
• Tuesday’s decliners ranged from -0.75% <VCEL -$0.10> to -17.33% <RENE.L> in 15 equities;

Versus

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

• Monday’s gainers ranged from +0.17% <BLUE +$0.30 > to +7.85% <BCLI +$0.27 > in 29 equities;
• Friday’s gainers ranged from +0.17% <SAGE +$0.25 > to +17.20% <SLDB +$2.77 > in 34 equities;
• Thursday’s gainers ranged from +0.45% <BTX +$0.01 > to +8% <AST +$0.10 > in 11 equities;
• Wednesday’s gainers ranged from +0.26% <IONS +$0.11 > to +5.66% <SLDB +$0.83 > in 22 equities;
• Tuesday’s gainers ranged from +0.45% <FIXX +0.09> to +5.30% <PSTI +$0.07> in 25 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.