RegMed Investors’ (RMi) closing bell: gene editing stocks bounce back

July 17, 2018 5:30pm

Even after their crash, there’s a “rush” to speculation … we haven’t heard the end of this issue…

The damage is done and platform questions will linger and fester since they have “complex rearrangements that could be pathogenic”; the jury will also stay sequestered on the science!

Remember, gene-editing has NOT been used in U.S. clinical studies – yet!

Out and about: If one sold into the rebound of gene editing company’s strength by day’s end, there’s money in your pocket – however, Icarus is still in the air with wings of wax!

Pre-open indications: 4 HIT and 4 MISS (be ready for the overbought)

I say today what others won’t, so you can do what others can’t!

Never leave an investor uninformed!  Want to know WHY, WHAT and HOW, subscribe!

Henry’omics:

From the pre-open newsletter titled, “Editas Medicine (EDIT), Intellia Therapeutics (NTLA) and CRISPR Therapeutics (CRSP) lost hundreds of millions in share pricing value yesterday.”

I also stated, “It ain’t over …

Today, gene editing stocks high jumped: Editas Medicine (EDIT +$1.26 or +3.58%) with 606.79 K shares traded, CRISPR Therapeutics (CRSP +$1.95 or +3.25%) with 787.9 K shares traded and Intellia Therapeutics (NTLA +$2.00 or +6.81%) with 637.4 K shares traded …

Quite a difference from yesterday with lower volume …

Yesterday, gene editing stocks dropped like stones in a lake: Editas Medicine (EDIT -$2.70 or -7.21%) with 1.52 M shares traded <3 month average = 1.52 M, CRISPR Therapeutics AG (CRSP -$5.65 or -8.60%) with 2.83 M shares traded <3 month average = 1.55 M shares> and Intellia Therapeutics (NTLA -$3.24 or -9.94%) with 1.33 m shares traded <3 month average = 928.4 K shares> …

Lower volume, a quick rebound after a steep decline … makes one think another SELL “plague” is in store? 

Interesting article from MotleyFool (Keith Speights) - understanding the problem …

CRISPR-Cas9 has been touted as the biotech discovery of the century. CRISPR stands for clustered regularly interspaced short palindromic repeats. This refers to DNA sequences discovered in certain types of bacteria that read the same forward and backward and are separated by regular stretches of what's called "spacer DNA" (a kind of DNA that doesn't provide instructions for building proteins). Some bacteria use a CRISPR-associated system (CAS) protein known as Cas9 to target and slice specific sections of DNA in viruses as a self-defense mechanism. Over time, scientists figured out how to build their own guide RNA (ribonucleic acid) to harness CRISPR-Cas9 to edit DNA sequences. CRISPR-Cas9 was hailed for its accuracy, cost-effectiveness, and simplicity.

However, a paper published on July 16, 2018, by Wellcome Sanger Institute scientists Michael Kosicki, Kart Tomberg, and Allan Bradley in the scientific journal Nature Biotechnology raises a serious concern.

The researchers found that using CRISPR-Cas9 to edit DNA in mouse cells and in a human differentiated cell line caused extensive unintended changes in DNA sequences that were relatively far away from the target DNA sequence. Those other unintended changes could potentially cause cancer or other diseases.

If all of this sounds familiar, it should...

A similar issue was raised in May 2017. Another scientific article published in Nature Methods found unexpected mutations in DNA following the use of CRISPR-Cas9 to edit genes. The stocks of CRISPR Therapeutics, Editas Medicine, and Intellia Therapeutics plunged on that news, just as they did this week.

However, the findings of the paper were quickly challenged. By July 2017, the editors of Nature Methods had issued "an editorial expression of concern" about the paper's conclusions. The authors subsequently retracted the paper in March 2018 after determining that the genetic changes observed in the two mice that were part of the research couldn't definitively be attributed to the use of CRISPR-Cas9 to edit genes.

The fundamental problem with that research was that the scientists didn't appropriately control for genetic variation the mice that were used. That's not an issue with the research performed by the Wellcome Sanger Institute team. They first tested on mouse embryonic stem cells and hematopoietic progenitor cells, but also saw similar off-target gene mutations in an immortalized human female retinal pigment epithelial cell line.

There have also been other potential issues identified with CRISPR-Cas9. In January 2018, a scientific paper suggested that human immune responses could impact the effectiveness of the gene-editing method. In June, two different papers published in Nature Medicine pointed to the possibility that CRISPR-Cas9 could cause an increased risk of cancer.  

Investors shouldn't ignore the latest concern about CRISPR-Cas9. The Wellcome Sanger Institute research was much different than the research in the paper published in 2017 that was ultimately retracted. Again, additional research will determine how worrisome the issue really is.

Never leave an investor uniformed!

Of the 45 companies covered on Tuesday; 13 downside equities finished in a range of -$0.01 (CUR) to -$0.49 (ALNY) while the 29 upside equities oscillated from +$0.015 (BTX) to $4.25 (ONCE) with 3 flat closes.

The advance/decline line scenario of 45 covered companies:   

• The open was positive with an A/DL of 30/12 and 3 flats;
• The mid-day was positive with an A/DL of 36/8 and 1 flat;
• The close was positive with an A/DL of 29/13 and 3 flats;

Pre-open indications: 4 hit and 4 miss

• Asterias Biotherapeutics (NYSEMKT: AST) closed up +$0.10 – hit;
• BioLife Solutions (BLFS) closed down -$0.55 – hit;
• bluebird bio (BLUE) closed up again +$4.10 – miss;
• CRISPR Therapeutics (CRSP) closed up +$1.95 – miss;
• Intellia Therapeutics (NTLA) closed up +$2.00 – miss;
• Editas Medicine (EDIT) closed up +$1.26 – miss;
• Mesoblast (MESO) closed up +$0.76 – hit;
• Voyager Therapeutics (VYGR) closed up +$1.87 – hit;

Out and about:  Biostage (BSTG) – in my OPINION, a “den of thieves” closed down -$0.06 after Monday’s -$0.51 drop …

MY working trend (5 largest) lines:

… The greatest volume to the downside:  VSTM, KOOL, BLFS,

… Upside volume was weighted to:  MDXG, SGMO, VCEL, XON, VYGR and CRSP

… Biggest $ downside:  BLFS (-$0.55), ALNY (-$0.49), FIXX (-$0.17), IONS (-$0.16) and VSTM (-$0.14)

… Best moves to the $ upside: ONCE (+$4.25), BLUE (+$4.10), RGNX (+$3.70), NTLA (+$2.00) and CRSP (+$1.95)

… Flats:  RENE.L, PSTI and HSGX

The count - decliners versus gainers – looks at the view from different angles:

……. look at the differences in decliners:

• Tuesday’s decliners ranged from -11% < KOOL -$0.0529> to -0.36% <IONS -$0.16 > in 13 equities;
• Monday’s decliners ranged from -0.25% <RARE -$0.21> to -12.85% <BSTG -$0.51> in 32 equities;
• Friday’s decliners ranged from -0.39% <BOLD -$0.15 > to -10.34% <VCEL -$1.05 > in 17 equities;
• Thursday’s decliners ranged from -2.17% <ONVO -$0.03 > to -7.94% <RGNX -$6.45 > in 19 equities;
• Wednesday’s decliners ranged from -0.08% <QURE -$0.03 > to -7.56% <FIXX -$1.70 > in 18 equities;
• Last Tuesday’s decliners ranged from -0.11% <VYGR -$0.02 > to -17.44% <BSTG -$0.75 > in 29 equities;

Versus

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

• Tuesday’s gainers ranged from +0.36% < SAGE +$0.61> to +12.69% < MESO +$0.76> in 29 equities;
• Monday’s gainers ranged from +0.19% <SAGE +$0.32 > to +5.99% <KOOL +$0.027 > in 10 equities;
• Friday’s gainers ranged from +0.07% < CLLS +$0.02> to +13.19% <CLBS +$0.72 > in 25 equities;
• Thursday’s gainers ranged from +0.25% < BSTG +$0.01> to +3.20% <BMRN +$3.30> in 24 equities;
• Wednesday’s gainers ranged from +0.08% <EDIT +$0.03> to +22.22% < RENE.L +$18.00> in 24 equities;
• Last Tuesday’s gainers ranged from +0.16% <KOOL -$0.007 > to +7.88% < VSTM +0.57> in 15 equities;

Daily analytics and metrics:

• The Dow rose 55.53 points or +0.22% to 25,119.89.
• The S&P 500 gained +11.12 points or +0.4% to close at 2,809.55,
• The NASDAQ hit a record high, up +49.40 points or +0.63% to 78.55

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

• Tuesday traded at 12.66, down -6%
• Monday traded at 12.83, up +5.34%
• Friday traded at 12.18, down -3.18%
• Thursday traded at 12.59, down -7.63 %
• Wednesday traded at 13.63, up +7.83%
• Last Tuesday traded at 12.64, down -0.39%

The iShares Russell 2000 (IWM) closed:

• Tuesday was up +0.43%;
• Monday was down -0.40%;
• Friday was down -0.26%;
• Thursday was up +0.47%;
• Wednesday was down -0.82%;
• Last Tuesday was down -0.48%;

The iShares NASDAQ Biotechnology (IBB) closed:

• Tuesday was up +0.75%
• Monday was down -0.73%
• Friday was up +0.17%
• Thursday was up +1.17%
• Wednesday was down -0.29%
• Last Tuesday was down -0.17%

JULY sessions:

Tuesday closed POSITIVE with 13 decliners, 29 advancers and 3 flat;

Monday (7/16) closed NEGATIVE with 32 decliners, 10 advancers and 3 flat;

Friday closed POSITIVE with 17 decliners, 25 advancers and 3 flat;

Thursday closed POSITIVE with 19 decliners, 24 advancers and 2 flat;

Wednesday closed POSITIVE with 18 decliners, 24 advancers and 3 flat;

Tuesday closed NEGATIVE with 29 decliners, 15 advancers and 1 flat;

Monday (7/9) closed POSITIVE with 18 decliners, 22 advancers and 5 flat;

Friday closed POSITIVE with 8 decliners, 35 advancers and 2 flat;

Thursday closed POSITIVE with 18 decliners, 23 advancers and 4 flat;

Wednesday (7/4) was a holiday;

Tuesday closed POSITIVE with 9 decliners, 33 advancers and 3 flat;

Monday (7/2) closed POSITIVE with 15 decliners, 27 advancers and 3 flat;

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.