December 14, 2018 6:51pm

The only follow-through after any rally in the past few weeks is another trip to the downside; that's very telling of the sector

 

Pre-open indications: 1 HIT and 1 MISS

Out and about: Biostage (BSTG) swings and misses constantly … (read more) and investors think they should depend on this “dysfunctional” management team going forward as they face a short-fall in funding their “runway”!

 

Investors should be reading about today’s final “figures” – be a subscriber and be ready for tomorrow’s session! As I have stated … today’s gold could be tomorrow’s tin!

 

Opinion extraction, opinion summarization and opinion tracking are three important techniques for understanding sentiment.

 

Daily analytics and "observations":

  • The Dow closed down -398.21 points or -1.62% to 24,199.17
  • The S&P closed down -50.59 points or -9.61% to 2,599.95
  • The NASDAQ was down -159.67 points or -2.26% to 6

 

From the pre-open newsletter: “bump and grinding its way to Friday’s close. Investor and trader sentiment is weak … in bewildering sessions, the sector’s inability to maintain any modicum of sustainability frustrates any appetite for buying dips”

 

The advance/decline line scenario of 45 covered companies:   

  • The open was negative with an A/DL of12/30 and 3 flats;
  • The mid-day was negative with an A/DL of 38/6 and 1 flats;
  • The close was negative with an A/DL of 13/30 and 2 flats;

 

Pre-open indications: 1 HIT and 1 MISS

Applied Genetic Technologies Corporation (AGTC) closed down -$0.22 – miss;

  • AGTC still has $105 M in cash and there is $6.81 in total cash per share.  BIIB has already paid out around $146 million during the collaboration and will contribute funding through to March 8 of next year, when the contract comes to an end.

Bellicum Pharmaceuticals (BLCM) closed up +$0.08 – hit;

 

Daily sector metrics:

… Greatest volume to the downside:  VSTM, XON, GBT, BMRN, MDXG and SGMO

… Upside volume was weighted to:  HSGX, BLUE, ALNY, SAGE and BLCM

… Weakness ($) to the downside: RARE (-$1.30), BMRN (-$0.78), CRSP (-$0.75), IONS (-$0.54) and VYGR (-$-0.50)

 … Best moves ($) to the upside:  RENE.L (+$2.00), BLUE (+$1.48a0, ALNY (+$1.47), SAGE (+$1.37) and ONCE (+0.81)

… The week’s history lesson, the iShares NASDAQ Biotechnology (IBB) closed:

  • Friday was down -1.89% after indicating a NEGATIVE -1.05% in the pre-market;
  • Thursday was down -1.51% after NOT indicating in the pre-market;
  • Wednesday was up +1.26% after indicating POSITIVE +1.79% in the pre-market;
  • Tuesday was up +0.3% after NOT indicating in the pre-market;
  • Monday was up +0.17% after indicating a POSITIVE +0.1% in the pre-market;
  • Last Friday was down -3% after NOT indicating in the pre-market;

 

Henry’omics:

Sector equities fell sharply on Friday after weaker-than-expected data in China and Europe exacerbated concerns of a global economic slowdown. Great the correct answer, but what about “our” universe … no one is excited, everyone is selling, no one is buying dips … I am calling an offside!

After Thursday’s wild ride … the Dow is now down 2.5%, the S&P 500 dropped 1.9% to 2,599.95 — its lowest closing level since April — as the health care sectors lagged. The broad index also closed down 2.75% for 2018. The NASDAQ pulled back 2.26% to 6,910.66.

Friday's losses also wiped out the gains for the week across the major!

Friday also marked the first time since March 2016 that all major indexes closed in a correction, down at least 10% from their 52-week highs.

Uncertainty has kept investors on edge recently. Data from research service Lipper found that more than $46 billion were pulled out in a week from U.S. stock mutual funds and ETFs, the most ever.

"At this point, a lot of investors are very cautious heading into 2019," said Yousef Abbasi, director of U.S. institutional equities at INTL FCStone. "There's a lot of frustration among investors that have been whipsawed by this volatility"<CNBC>.

 

Out and about: the 1st amendment allows one to speak the truth!

Biostage (BSTG) closed down -$0.45 to $2.20. Maybe day traders are finally catching on as I questioned on Tuesday …”Does Biostage (BSTG) have interlocking financial interests and conflicts with a director, scientific advisor and the medical institution where research is taking place and where trials are to take place?

  • Answer from Tuesday’s post, “Are day traders finally seeing through the “fog” of mismanagement?
  • Also, in forging partnerships with a Connecticut hospital and its CEO (James Shmerling – a BSTG director), has BSTG created a web of interlocking financial interests and conflicts that, ethics experts could raise doubts about whether the hospital puts its trial patients’ interests first while its scientific advisor, Dr. Christine FINCK, MD is acting as the research and trial investigator? 
  • The BIG question is … does she own shares and be paid (as a scientific advisor)?”
  • On January 3, 2018 (from the 8-k) , BSTG issued 50,000 shares of its common stock to Connecticut Children’s Medical Center at $2.00 per share and warrants to purchase 75,000 shares of common stock at an exercise price of $2.00 per share, in exchange for aggregate gross proceeds of $100,000 in a private placement transaction of unregistered shares. The warrants were immediately exercisable and expire in January 2023. BSTG has allocated $51,000 of consideration to the warrants using the relative fair-value method and included such amount in additional paid-in capital.
  • BSTG has also … classified these warrants as permanent equity versus liability warrants as the warrants do not have any redemption features nor a right to put for cash that is outside the control of the Company.
  • WHY?
  • Connecticut Children’s Chief Executive Officer, James Shmerling, is a member of the respective Board of Directors of each of BSTG and Connecticut Children’s.
  • Second WHY … BSTG has appointed Jeffrey Young as a member of the board of directors -- the CEO’s wife’s former CFO and Matthew Dallas, a former Genzyme Biosurgery associate director of finance – two (2) finance types – what about clinical knowledgeable executive – BSTG’s weakest points?
  • Another grievous MISTAKE by NOT paying their RENT … that could have generated income - On November 3, 2017, in exchange for settlement of approximately $0.1 million of outstanding rent and operating expenses due to Harvard Bioscience:  BSTG sold all of its current stock of research bioreactor parts, a royalty free perpetual sub-licensable and transferable right and license to use the intellectual property, including but not limited to certain patents covering research bioreactors, and relinquished exclusive manufacturing or distribution rights with respect to research bioreactors to Harvard Bioscience.
  • BSTG had ceased the manufacture of research bioreactors in late 2016, to concentrate its efforts solely on development of its clinical product candidates. This settlement only covers research bioreactors, not to be used for clinical purposes. BSTG retains full exclusive rights to all assets and rights associated with the clinical bioreactor used in the development of BSTG’s current Cellframe technology.
  • After all the $monies$ spent to acquire the technologies!
  • Last question, WHY does BSTG’s CFO and CEO KEEP pushing past (Financial) accounts payable … $204 K and accrued liabilities … $547 K into the follow-on quarters?
  • And that is just the beginning of their deficiencies …!!

 

 

Tonight’s percentage (%) indicators:

  • Review the range of the 13 upside from +0.18% (BLFS) to +5.97% (HSGX) while the 30 downside ranged from -0.53% (QURE) to -16.98% (BSTG) with 2 flat close (BTX and VCEL).

Volume stat:

  • 4 out of the 13 upside had higher (than the 3 month average) volume
  • 5 out of the 30 downside experienced greater volume (than the 3 month average).

 

December sessions:

Friday closed NEGATIVE with 30 decliners, 13 advancers and 2 flats;

Thursday closed NEGATIVE with 36 decliners, 8 advancers and 1 flat;

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

Tuesday closed NEUTRAL with 21 decliners, 21 advancers and 3 flat;

Monday closed POSITIVE with 18 decliners, 25 advancers and 1 flat;

Friday closed NEGATIVE with 33 decliners, 11 advancers and 1 flat;

Thursday closed POSITIVE with 20 decliners, 22 advancers and 3 flats;

Wednesday markets were closed;

Tuesday closed NEGATIVE with 36 decliners, 7 advancers and 2 flats;

Monday (12/3) closed POSITIVE with 10 decliners, 32 advancers and 3 flats;

 

  • In 22 sessions in November – there were 1 holiday, 10 positive closes, 1 neutral and 10 negative closes;
  • In 23 sessions in October – there were 17 negative closes and 6 positive closes

 

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.