February 26, 2019 6:04pm

There is the usual profit-taking of upside value

Quarterly results: Vericel (VCEL -$1.08 or -5.40% to $18.92) surpassed earnings expectations with net income of $5.2 M or +0.11 per share. Voyager Therapeutics (VYGR +$0.01) with a net loss of -$22.5 M or -0.70 per share and AxoGen (AXGN -$0.16) with a net loss of -$5.2 M or 0.13 per share

News: CRISPR Therapeutics (CRSP -$3.45 to $36.20) and its partner Vertex Pharmaceuticals (VRTX) dosed the first patient in a P1/2 study evaluating the CRISPR/Cas9 gene-editing therapy, CTX001, in patients with beta thalassemia, a form of anemia. It had been getting rich in its share pricing.

Offerings: Sage Therapeutics (SAGE -$6.61) and Ultragenyx Pharmaceuticals (RARE -$1.68)

 

I am right so often because, it’s about refining expectation, defining insight and NOT being indentured to ANY financial institution! That’s why my “quantamental”  blend of the two styles has become common parlance among investors and traders.

 

The take-away, don’t dwell on what’s happened and follow RMi’s lesson of investing in those who guide and then meet short-term expectation

 

Markets and indexes:

  • The Dow closed down -33.97 points or -0.13% to 26,057.98
  • The S&P closed down -2.21 points or -0.08% to 2,793.90
  • The NASDAQ was down -5.16  points or -0.07% to 7,549.30

 

Henry’omics:

Back from a brief vacation … and I am ready to go back to 86 degrees.

And a busy day of 3 Q4 results, 2 offerings announced – 1 priced and a clinical initiative that got … SOLD into!

What is my favorite analogy … the sector and Icarus flying so high and getting burned by the heights and the proximity to the sun?

WILL strong consumer confidence numbers helped equities recover some of their losses?

  • The Conference Board said its consumer confidence index surged to 131.4 in February, easily topping an estimate of 124. In January, consumer confidence was at 121.7.

 

The advance/decline line scenario of 45 covered companies:  

  • The open was negative with the A/DL to 16/24 and 5 flats;
  • The mid-day was negative with an A/DL of 21/23 and 1 flat;
  • The close was negative with an A/DL of 20/24 and 1 flat;

 

News:

Shares of CRISPR Therapeutics dived 8.70% following the announcement of dosing the first patient in a P1/2 study evaluating the CRISPR/Cas9 gene-editing therapy, CTX001, in patients with beta thalassemia, a form of anemia. However, the stock has declined 14.34% in the past year.

 

Offerings:

Sage Therapeutics (SAGE) … https://www.regmedinvestors.com/articles/10730

Ultragenyx Pharmaceuticals (RARE) … https://www.regmedinvestors.com/articles/10731

 

Bouncing to the upside:  

  • BLUE (+$2.71), RENE.L (+$2.00), FIXX (+$1.97), BMRN (+$0.81) and GBT (+$0.44)

Leading the pack and peers to the downside were:

  • SAGE (-$6.61), CRSP (-$3.45), QURE (-$2.31), RARE (-$1.86) and RGNX (-$1.12)

Closing FLAT … BSTG – the usual suspect

 

Tonight’s percentage (%) indicators: 

  • Range of the 20 upside was +0.07% (VYGR) to +7.29% (FIXX) while the 24 downside ranged from -0.03% (ONCE) to -8.70% (CRSP) with 1 flat close (BSTG).

Volume stat: 

  • 9 out of the 20 upside had higher (than the 3 month average) volume
  • 12 out of the 24 downside experienced greater volume (than the 3 month average)

 

Daily volume metrics:

… Greatest volume (descending) to the downside: 

  • ONCE, HSGX, VCEL, SAGE and VSTM

… Upside volume was weighted to:

  • SGMO, BLUE, SLDB, BMRN and GBT

 

Quarterly results (continued): Vericel (VCEL) total net product revenues increased 41% to $31.3 million compared to $22.2 million inQ4/17;

  • Gross margins of 72% compared to gross margins of 64% in Q4/17;
  • Net income of $5.2 M, or $0.11 per share, compared to $0.3 million, or $0.01 per share;
  • Non-GAAP adjusted EBITDA of $7.7 million compared to $2.2 million in Q4/17; and
  • As of December 31, 2018, after retiring all outstanding debt, VCEL had $82.9 million in cash and short-term investments compared to $26.9 million in cash at December 31, 2017.

Full-Year 2018 Financial Highlights: Total net product revenues increased 45% to $90.9 million compared to $62.8 million in 2017;

  • Gross margins of 65% compared to gross margins of 53% in 2017;
  • Net loss of $8.1 million, or $0.20 per share, compared to a net loss of $17.3 million, or $0.52 per share, in 2017; and
  • Non-GAAP adjusted EBITDA of $4.7 million compared to a loss of $9.4 million in 2017.

 

Voyager Therapeutics (VYGR) reported: A GAAP net loss of $22.5 million, or $0.70 per share, forQ4, compared to a GAAP net loss of $11.8 million, or $0.40 per share, for the same period in 2017, and a GAAP net loss of $88.3 million, or $2.75 per share, for the full year ended December 31, 2018, compared to a GAAP net loss of $70.7 million, or $2.64 per share, for the same period in 2017.

  • Collaboration revenues of $2 million for Q4 compared to collaboration revenues of $6.3 million for the fourth quarter of 2017. Collaboration revenues of $7.6 million for the full year ended December 31, 2018 compared to collaboration revenues of $10.1 million for the full year ended December 31, 2017.  Collaboration revenues reflect recognition of payments for research and development services provided by Voyager for various programs under the Sanofi Genzyme and AbbVie collaboration agreements and can vary based on quarterly assessments of efforts under the collaborations.  The decrease in collaboration revenues for the fourth quarter and full year 2018 compared to the same periods in 2017 reflect the one-time recognition of amounts allocated to Sanofi Genzyme’s rights in the Parkinson’s program in the fourth quarter of 2017 and the January 1, 2018 adoption of the new revenue accounting standards which modified the Company’s recognition methodology. These decreases were partially offset by revenue related to the research services performed under the collaboration agreement with AbbVie entered into in February 2018.
  • R&D expenses of $16.9 million for Q4 compared to $13.3 million for the same period in 2017.  R&D expenses of $64.9 million for the year ended December 31, 2018 compared to $62.3 million for the same period in 2017. The increase in R&D expenses related primarily to expenditures associated with the development of Voyager’s pipeline including costs related to the RESTORE-1 Phase 2 clinical trial for VY-AADC, and increased personnel and facility costs to support the advancement of the pipeline programs.
  • G&A expenses of $8.3 million for Q4 compared to $5.4 million for the same period in 2017.  G&A expenses of $33.8 million for the year ended December 31, 2018 compared to $19.7 million for the same period in 2017. The increase in G&A expenses was primarily due to increased professional fees including consulting and legal costs in addition to personnel and facility costs to support Voyager’s growing business.

 

AxoGen (AXGN) reported Q4 revenue of $23.4 million, up 38% compared to fourth quarter 2017 revenue of $17 million

  • Gross margin of 84.5% compared to 84.6% in the fourth quarter of 2017
  • Net loss for the quarter was $5.2 million, or $0.13 per share, compared to net loss of $2.5 million, or $0.07 per share in the fourth quarter of 2017
  • Adjusted net loss for the fourth quarter of 2018 was $3.6 million, or $0.09 per share, compared with adjusted net loss of $1.4 million, or $0.04 per share, in the fourth quarter of 2017
  • Adjusted EBITDA loss of $4.0M compared to Adjusted EBITDA loss of $531,000 in the fourth quarter of 2017

 

The iShares NASDAQ Biotechnology (IBB) indicator:

  • Tuesday was down -0.41% after NOT indicating in the pre-market;
  • Monday was a vacation day
  • Friday was up +1.4% after NOT indicating in the pre-market;
  • Thursday was down -1.76% and a travel and vacation day;
  • Wednesday was down -0.27% after NOT indicating in the pre-market;
  • Last Tuesday was down -0.57% after NOT indicating in the pre-market;

 

February sessions:

Tuesday closed NEGATIVE with 24 decliners, 20 advancers and 1 flat;

Monday was a vacation day

Friday closed POSITIVE with 33 decliners, 10 advancers and 2 flat;

Thursday closed NEGATIVE with 22 decliners, 21 advancers and 2 flat;

Wednesday (2/20) closed NEGATIVE with 24 decliners, 20 advancers and 1 flat;

Tuesday closed NEGATIVE with 24 decliners, 18 advancers and 3 flats;

Monday was a market holiday;

Friday closed POSITIVE with 6 decliners, 38 advancers and 1 flat;

Thursday closed NEGATIVE with 28 decliners, 16 advancers and 1 flat;

Wednesday (2/13) closed NEGATIVE with 25 decliners, 19 advancers and 1 flat;

Tuesday closed POSITIVE with 11 decliners, 33 advancers and 1 flat;

Monday closed POSITIVE with 14 decliners, 30 advancers and 1 flat;

Friday closed POSITIVE with 18 decliners, 25 advancers and 2 flat;

Thursday closed NEGATIVE with 37 decliners, 7 advancers and 1 flat;

Wednesday (2/6) closed NEGATIVE with 24 decliners, 20 advancers and 1 flat;

Tuesday closed NEGATIVE with 26 decliners, 15 advancers and 4 flat;

Monday closed POSITIVE with 16 decliners, 27 advancers and 2 flat;

Friday closed POSITIVE with 14 decliners, 29 advancers and 2 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.